How Courts Are Defining 'Distribution' In Peer-to-Peer File-Sharing Lawsuits

In the entertainment industry's efforts to stem the infringement of sound recordings and motion pictures on the Internet, more than 20,000 infringement actions have been commenced against individuals, mostly in connection with their use of peer-to-peer (P2P) services to share recordings with other P2P users. The legal basis for these actions is often misunderstood, however, by commentators ' and sometimes even by the courts. This article discusses several recent P2P cases that deal directly with a central element of most P2P cases, namely the allegation that users violate the plaintiffs' distribution rights under 17 U.S.C. Sec. 106 whenever they place a digital recording or video in a 'share' folder that other P2P users can access.

What Is 'Distribution'?

Under the Copyright Act, a copyright owner has various exclusive rights, including the right 'to distribute copies ' of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease or lending.' The act does not define the word 'distribute.' 'Copies' of works are defined as 'material objects ' in which a work is fixed and from which the work can be perceived,' thus distribution is clearly limited to some sort of activity involving tangible copies, but the act is largely silent as to what that activity would be. All the statute says is that it must constitute sale or other transfer of ownership of the tangible copies, or 'rental, lease or lending' of them. Contrary to arguments often made in defense of P2P file sharing, the statute does not require that distribution must involve or result in a physical copy literally moving from one place to another.

The law certainly never required physical movement of copies in the pre-Internet world, as is evident in Hotaling v. Church of Jesus Christ of Latter-Day Saints, 118 F.3d 199 (4^th Cir. 1997). In Hotaling, the U.S. Court of Appeals for the Fourth Circuit reversed a lower court to hold that a copyright owner's distribution right was violated by the placing of a single, unauthorized copy of a book on the shelf of a library. Whether or not any patron ever checked out the book, the library had made it available to the public, which was enough to violate the distribution right. The Fourth Circuit noted: '[T]he record does not contain any evidence showing specific instances ' in which the libraries loaned the infringing copies to members of the public. But ' proving the libraries held unauthorized copies in their collections, where they were available to the public, is sufficient to establish distribution within the meaning of the statute.' Over a brief and respectful dissent, the court reasoned that 'when a public library adds a work to its collection, lists the work in its index or catalog system, and makes the work available to the borrowing or browsing public, it has completed all the steps necessary for distribution to the public. At that point, members of the public can visit the library and use the work.'

In the Internet context, the physical objects at issue are usually audio or audio-visual files stored on the hard drive of a user's computer. A peer-to-peer transaction between two users does not relocate a physical copy of a recording from one user's possession to another's, but, like the library in Hotaling, the first user makes the file available to the public at large. As in Hotaling, this should be seen as a violation of the distribution right, whether or not a second user actually accesses or copies the available file. The Ninth Circuit so stated in A&M Records Inc. v. Napster, 239 F.3d 1004 (9^th Cir. 2001) ('Napster users who upload file names to the search index for others to copy violate plaintiffs' distribution rights'). On remand, the district court in Napster distinguished Hotaling on the grounds that the library in Hotaling actually had a tangible copy of the work in its collection, but Napster did not. 377 F.Supp.2d 796 (N.D.Cal. 2005). That distinction, whatever its merits, clearly does not extend to claims against individual file-sharers who do hold copies of films or recordings on their hard drives.

The File-Sharer Cases

Since Napster, the majority of P2P cases have involved claims of direct infringement against individual users, not secondary-liability claims against intermediaries like Napster. These individual P2P cases have generally been resolved by settlement rather than judicial decision, so it was not until 2006 that any court had occasion to address 'making available' in connection with P2P technology. (One very early case supporting the making-available argument is Playboy Enters. Inc. v. Frena, 839 F.Supp. 1552 (M.D. Fla. 1993), a case involving the relatively primitive bulletin board technology of the early 1990s.) The U.S. District Court for the District of Maine appears to have been the first, in Universal City Studios Prodns. v. Bigwood, 441 F.Supp.2d 185 (D. Me. 2006), involving an individual who shared various films using the Kazaa online network. Judge Gene Carter noted that 'in the digital environment, a person who stores copyrighted files in a shared directory makes those files immediately and readily available for download by other P2P users.' Citing Hotaling and the Ninth Circuit's Napster decision, the court concluded that the defendant had violated the distribution right by 'using Kazaa to make copies of the Motion Pictures available to thousands of people over the Internet.' Summary judgment was awarded to the plaintiff.

In Elektra Entertainment Group Inc., v. Perez, 05-931 (D. Ore. 2005), Judge Anne Aiken of the District of Oregon used similar reasoning to deny a motion to dismiss a P2P complaint. The defendant in Perez likewise used the Kazaa software program 'to make a number of music files available over the Internet,' and the plaintiffs identified multiple titles among the defendant's offerings. The defendant moved to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, claiming that the plaintiff did not 'specify the allegedly infringing activity' in the complaint. The court disagreed. It noted that the complaint 'alleges that defendant used an online media distribution system, among other things, to make the copyrighted recordings available for distribution to others.' That allegation, supported by an exhibit listing the files in the defendant's share folder at the time of the plaintiff's investigation, was sufficient to warrant denial of the motion to dismiss.

In October 2007, in Virgin Records America v. Thomas, 06-1497 (D. Minn. 2007), a jury in Minnesota found defendant Jammie Thomas liable for infringement and awarded statutory damages of $222,000. Thomas was found to have violated copyrights in 24 tracks by sharing them online, resulting in a damage award of $9,250 per track, the first jury award ever made in an individual file sharing case. Jury charge No. 15, strenuously contested by the defendants, read as follows: 'The act of making copyrighted sound recordings available for electronic distribution on a peer-to-peer network, without license from the copyright owners, violates the copyright owners' exclusive right of distribution, regardless of whether actual distribution has been shown.'

Clearly, a plaintiff's burden of showing infringement is much easier to carry under such an instruction, because it need only establish that copyrighted material was present in a defendant's share folder, not that any third party actually obtained a copy. Again, this is not a new rule for the Internet; it is fully consistent
with the long-held views of the Copyright Office regarding when a work is deemed 'published.' (See, 'Compendium II of Copyright Office Practices' (1984) at Sec. 905.02 (publication results from 'leaving copies in a public place for anyone to take')). Thomas has appealed.

The courts' acceptance of making available liability for individual file sharers recently encountered some skepticism, however, at least in a procedural context. In February, the District of Connecticut in Atlantic Recording Corp. v. Brennan, 3:07cv232 (JBA) (D. Conn. 2008), refused to enter a default judgment against a non-appearing defendant, again in a case involving the sharing of music files. The complaint alleged that defendant had 'used, and continues to use, an online media distribution system to download the Copyrighted Recordings, to distribute the Copyrighted Recordings to the public, and/or to make the Copyrighted Recordings available for distribution to others.' When the defendant defaulted, the court refused to award judgment for the plaintiff in part because it perceived possible meritorious defenses to the allegations.

Specifically with regard to the allegation of making available, the court found the claim 'problematic,' stating that ”without actual distribution of copies ' there is no violation of the distribution right.” This seems tautological, using the word 'distribution' as one of the criteria by which to determine whether there has been a 'distribution,' but the court did not address the issue, or the case law, in any detail and it does not appear that a more careful consideration of the point would likely have altered the ultimate result. (See the sidebar below for a recent case declining to accept 'making available' as enough for infringement.)

The court in Brennan cited the recent Ninth Circuit decision in Perfect 10 Inc. v. Amazon.com Inc., 508 F.3d 1146 (9^th Cir. 2007), which states that 'distribution requires an 'actual dissemination' of a copy,' but the citation is inapposite in the file-sharing context. In Perfect 10, the Ninth Circuit refused to apply the Hotaling rule to Google and other online intermediaries because they did not have tangible copies of the infringing images on their servers. They were thus 'unlike the participants in the Napster system or the library in Hotaling.' There is no question that distribution can be found to occur if a defendant does have such tangible copies; the Perfect 10 court itself noted that '[t]he Supreme Court has indicated that in the electronic context, copies may be distributed electronically,' citing N.Y. Times v. Tasini, 533 U.S. 483 (2001).

The making-available claim is well supported by the case law and the statute. It is no argument to say, as Brennan does, that distribution requires 'actual distribution.' The debate is over the meaning of the word. Clearly it requires a tangible copy, which Napster did not have, but where the defendant does in fact have a tangible copy, and allows others to access and use that tangible copy, the result in Hotaling should control. It is no stretch to say that one has loaned one's car if one gives the keys to a friend and says 'bon voyage.' Whether or not the borrower ever drives it away is immaterial. In the world of file sharing it may take two to tango, but it only takes one to distribute.

Download Decision Parses 'Offering,' 'Making Available'

The U.S. District Court for the Southern District of New York denied a motion to dismiss a suit against an individual accused of file sharing, but declined to accept the plaintiff record labels position that 'making available' was enough for infringement. Elektra Entertainment Group Inc. v. Barker, 05-CV-7340 (KMK).

Defendant Tenise Barker argued that the complaint wasn't specific enough and that the allegation that she '[made] the Copyrighted Recordings available for distribution to others' failed to state a claim upon which relief can be granted.

On the specificity argument, the district court found: 'In particular, Exhibit B of the Complaint is alleged to be a copy of Defendant's 'shared folder' as it appeared on her computer. Plaintiffs submit that Exhibit B provides specific information about Defendant's infringement of Plaintiffs' copyrights, including the network used by Defendant, Defendant's alias, and a comprehensive list of infringed works. Thus, this Complaint gives Defendant adequate notice of the works subject to Plaintiffs' claim and the grounds upon which Plaintiffs allege Defendant's infringement. ' The Complaint does not affix a date or time of each instance of alleged infringement, but it need not do so in order to survive a motion to dismiss.'

Barker argued on her second point that not just making available but an actual transfer was required for a violation of distribution rights. 'Distribution,' a protected right of a copyright under 17 U.S.C. Sec. 106(3) isn't specifically defined in the Copyright Act. But 'publication' is defined in Sec. 101 to include 'offering to distribute copies or phonorecords to a group of persons for purposes of further distribution, public performance, or public display.' Shunning the 'contourless 'make available' right, the district court explained that 'because Congress did not expressly equate the act of 'offering to distribute ' for the purposes of further distribution' to the act of 'making available,' Plaintiffs' allegations ' insofar as Plaintiffs wish to hold Defendant liable for acts of infringement other than actual downloading and/or distribution ' fail to state a claim.'

But the court added: 'Defendant's Motion [to dismiss] still fails because Plaintiffs have adequately alleged that, in addition to making Plaintiffs' works available, Defendant distributed Plaintiffs' copyrighted works. ' However, should Plaintiffs wish to amend their Complaint to track the language of the Copyright Act that prohibits an illegal 'offer to distribute,' the [c]ourt grants Plaintiffs thirty days to amend their Complaint consistent with this Opinion.'

' Stan Soocher

In the entertainment industry's efforts to stem the infringement of sound recordings and motion pictures on the Internet, more than 20,000 infringement actions have been commenced against individuals, mostly in connection with their use of peer-to-peer (P2P) services to share recordings with other P2P users. The legal basis for these actions is often misunderstood, however, by commentators ' and sometimes even by the courts. This article discusses several recent P2P cases that deal directly with a central element of most P2P cases, namely the allegation that users violate the plaintiffs' distribution rights under 17 U.S.C. Sec. 106 whenever they place a digital recording or video in a 'share' folder that other P2P users can access.

What Is 'Distribution'?

Under the Copyright Act, a copyright owner has various exclusive rights, including the right 'to distribute copies ' of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease or lending.' The act does not define the word 'distribute.' 'Copies' of works are defined as 'material objects ' in which a work is fixed and from which the work can be perceived,' thus distribution is clearly limited to some sort of activity involving tangible copies, but the act is largely silent as to what that activity would be. All the statute says is that it must constitute sale or other transfer of ownership of the tangible copies, or 'rental, lease or lending' of them. Contrary to arguments often made in defense of P2P file sharing, the statute does not require that distribution must involve or result in a physical copy literally moving from one place to another.

The law certainly never required physical movement of copies in the pre-Internet world, as is evident in Hotaling v. Church of Jesus Christ of Latter-Day Saints , 118 F.3d 199 (4 th Cir. 1997). In Hotaling, the U.S. Court of Appeals for the Fourth Circuit reversed a lower court to hold that a copyright owner's distribution right was violated by the placing of a single, unauthorized copy of a book on the shelf of a library. Whether or not any patron ever checked out the book, the library had made it available to the public, which was enough to violate the distribution right. The Fourth Circuit noted: '[T]he record does not contain any evidence showing specific instances ' in which the libraries loaned the infringing copies to members of the public. But ' proving the libraries held unauthorized copies in their collections, where they were available to the public, is sufficient to establish distribution within the meaning of the statute.' Over a brief and respectful dissent, the court reasoned that 'when a public library adds a work to its collection, lists the work in its index or catalog system, and makes the work available to the borrowing or browsing public, it has completed all the steps necessary for distribution to the public. At that point, members of the public can visit the library and use the work.'

In the Internet context, the physical objects at issue are usually audio or audio-visual files stored on the hard drive of a user's computer. A peer-to-peer transaction between two users does not relocate a physical copy of a recording from one user's possession to another's, but, like the library in Hotaling, the first user makes the file available to the public at large. As in Hotaling, this should be seen as a violation of the distribution right, whether or not a second user actually accesses or copies the available file. The Ninth Circuit so stated in A&M Records Inc. v. Napster , 239 F.3d 1004 (9 th Cir. 2001) ('Napster users who upload file names to the search index for others to copy violate plaintiffs' distribution rights'). On remand, the district court in Napster distinguished Hotaling on the grounds that the library in Hotaling actually had a tangible copy of the work in its collection, but Napster did not. 377 F.Supp.2d 796 (N.D.Cal. 2005). That distinction, whatever its merits, clearly does not extend to claims against individual file-sharers who do hold copies of films or recordings on their hard drives.

The File-Sharer Cases

Since Napster, the majority of P2P cases have involved claims of direct infringement against individual users, not secondary-liability claims against intermediaries like Napster. These individual P2P cases have generally been resolved by settlement rather than judicial decision, so it was not until 2006 that any court had occasion to address 'making available' in connection with P2P technology. (One very early case supporting the making-available argument is Playboy Enters. Inc. v. Frena , 839 F.Supp. 1552 (M.D. Fla. 1993), a case involving the relatively primitive bulletin board technology of the early 1990s.) The U.S. District Court for the District of Maine appears to have been the first, in Universal City Studios Prodns. v. Bigwood , 441 F.Supp.2d 185 (D. Me. 2006), involving an individual who shared various films using the Kazaa online network. Judge Gene Carter noted that 'in the digital environment, a person who stores copyrighted files in a shared directory makes those files immediately and readily available for download by other P2P users.' Citing Hotaling and the Ninth Circuit's Napster decision, the court concluded that the defendant had violated the distribution right by 'using Kazaa to make copies of the Motion Pictures available to thousands of people over the Internet.' Summary judgment was awarded to the plaintiff.

In Elektra Entertainment Group Inc., v. Perez, 05-931 (D. Ore. 2005), Judge Anne Aiken of the District of Oregon used similar reasoning to deny a motion to dismiss a P2P complaint. The defendant in Perez likewise used the Kazaa software program 'to make a number of music files available over the Internet,' and the plaintiffs identified multiple titles among the defendant's offerings. The defendant moved to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, claiming that the plaintiff did not 'specify the allegedly infringing activity' in the complaint. The court disagreed. It noted that the complaint 'alleges that defendant used an online media distribution system, among other things, to make the copyrighted recordings available for distribution to others.' That allegation, supported by an exhibit listing the files in the defendant's share folder at the time of the plaintiff's investigation, was sufficient to warrant denial of the motion to dismiss.

In October 2007, in Virgin Records America v. Thomas, 06-1497 (D. Minn. 2007), a jury in Minnesota found defendant Jammie Thomas liable for infringement and awarded statutory damages of $222,000. Thomas was found to have violated copyrights in 24 tracks by sharing them online, resulting in a damage award of $9,250 per track, the first jury award ever made in an individual file sharing case. Jury charge No. 15, strenuously contested by the defendants, read as follows: 'The act of making copyrighted sound recordings available for electronic distribution on a peer-to-peer network, without license from the copyright owners, violates the copyright owners' exclusive right of distribution, regardless of whether actual distribution has been shown.'

Clearly, a plaintiff's burden of showing infringement is much easier to carry under such an instruction, because it need only establish that copyrighted material was present in a defendant's share folder, not that any third party actually obtained a copy. Again, this is not a new rule for the Internet; it is fully consistent
with the long-held views of the Copyright Office regarding when a work is deemed 'published.' (See, 'Compendium II of Copyright Office Practices' (1984) at Sec. 905.02 (publication results from 'leaving copies in a public place for anyone to take')). Thomas has appealed.

The courts' acceptance of making available liability for individual file sharers recently encountered some skepticism, however, at least in a procedural context. In February, the District of Connecticut in Atlantic Recording Corp. v. Brennan, 3:07cv232 (JBA) (D. Conn. 2008), refused to enter a default judgment against a non-appearing defendant, again in a case involving the sharing of music files. The complaint alleged that defendant had 'used, and continues to use, an online media distribution system to download the Copyrighted Recordings, to distribute the Copyrighted Recordings to the public, and/or to make the Copyrighted Recordings available for distribution to others.' When the defendant defaulted, the court refused to award judgment for the plaintiff in part because it perceived possible meritorious defenses to the allegations.

Specifically with regard to the allegation of making available, the court found the claim 'problematic,' stating that ”without actual distribution of copies ' there is no violation of the distribution right.” This seems tautological, using the word 'distribution' as one of the criteria by which to determine whether there has been a 'distribution,' but the court did not address the issue, or the case law, in any detail and it does not appear that a more careful consideration of the point would likely have altered the ultimate result. (See the sidebar below for a recent case declining to accept 'making available' as enough for infringement.)

The court in Brennan cited the recent Ninth Circuit decision in Perfect 10 Inc. v. Amazon.com Inc. , 508 F.3d 1146 (9 th Cir. 2007), which states that 'distribution requires an 'actual dissemination' of a copy,' but the citation is inapposite in the file-sharing context. In Perfect 10, the Ninth Circuit refused to apply the Hotaling rule to Google and other online intermediaries because they did not have tangible copies of the infringing images on their servers. They were thus 'unlike the participants in the Napster system or the library in Hotaling.' There is no question that distribution can be found to occur if a defendant does have such tangible copies; the Perfect 10 court itself noted that '[t]he Supreme Court has indicated that in the electronic context, copies may be distributed electronically,' citing N.Y. Times v. Tasini , 533 U.S. 483 (2001).

The making-available claim is well supported by the case law and the statute. It is no argument to say, as Brennan does, that distribution requires 'actual distribution.' The debate is over the meaning of the word. Clearly it requires a tangible copy, which Napster did not have, but where the defendant does in fact have a tangible copy, and allows others to access and use that tangible copy, the result in Hotaling should control. It is no stretch to say that one has loaned one's car if one gives the keys to a friend and says 'bon voyage.' Whether or not the borrower ever drives it away is immaterial. In the world of file sharing it may take two to tango, but it only takes one to distribute.

Download Decision Parses 'Offering,' 'Making Available'

The U.S. District Court for the Southern District of New York denied a motion to dismiss a suit against an individual accused of file sharing, but declined to accept the plaintiff record labels position that 'making available' was enough for infringement. Elektra Entertainment Group Inc. v. Barker, 05-CV-7340 (KMK).

Defendant Tenise Barker argued that the complaint wasn't specific enough and that the allegation that she '[made] the Copyrighted Recordings available for distribution to others' failed to state a claim upon which relief can be granted.

On the specificity argument, the district court found: 'In particular, Exhibit B of the Complaint is alleged to be a copy of Defendant's 'shared folder' as it appeared on her computer. Plaintiffs submit that Exhibit B provides specific information about Defendant's infringement of Plaintiffs' copyrights, including the network used by Defendant, Defendant's alias, and a comprehensive list of infringed works. Thus, this Complaint gives Defendant adequate notice of the works subject to Plaintiffs' claim and the grounds upon which Plaintiffs allege Defendant's infringement. ' The Complaint does not affix a date or time of each instance of alleged infringement, but it need not do so in order to survive a motion to dismiss.'

Barker argued on her second point that not just making available but an actual transfer was required for a violation of distribution rights. 'Distribution,' a protected right of a copyright under 17 U.S.C. Sec. 106(3) isn't specifically defined in the Copyright Act. But 'publication' is defined in Sec. 101 to include 'offering to distribute copies or phonorecords to a group of persons for purposes of further distribution, public performance, or public display.' Shunning the 'contourless 'make available' right, the district court explained that 'because Congress did not expressly equate the act of 'offering to distribute ' for the purposes of further distribution' to the act of 'making available,' Plaintiffs' allegations ' insofar as Plaintiffs wish to hold Defendant liable for acts of infringement other than actual downloading and/or distribution ' fail to state a claim.'

But the court added: 'Defendant's Motion [to dismiss] still fails because Plaintiffs have adequately alleged that, in addition to making Plaintiffs' works available, Defendant distributed Plaintiffs' copyrighted works. ' However, should Plaintiffs wish to amend their Complaint to track the language of the Copyright Act that prohibits an illegal 'offer to distribute,' the [c]ourt grants Plaintiffs thirty days to amend their Complaint consistent with this Opinion.'

' Stan Soocher