Social media sites are transforming not only the daily lives of consumers, but also how companies interact with consumers. Here at Morrison Foerster, across all of our practice groups, we are seeing complex, cutting-edge legal issues arising out of social media. As with the Internet boom during the mid-to-late 1990s, social media is generating new legal questions at a far faster pace than the law’s ability to provide answers to such questions. In an effort to stay on top of these emerging issues, and to keep our clients and friends informed of new developments, Morrison Foerster publishes this blog devoted to the law and business of social media.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Aaron is the chair of the firm’s Technology Transactions Group and co-chair of the Interactive + Digital Media Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals.Aaron’s practice focuses on advising both established and emerging companies in a variety of data- and technology-intensive sectors, including software, SaaS, cloud-based technology, digital media (social media, AR/VR, gaming, streaming media, AdTech), AI, healthcare, consumer electronics, e-commerce, other online business models, and mobile applications. He also maintains an active practice counseling companies on branding and marketing, trademark licensing, and content-related transactions, as well as the intellectual property aspects of mergers, acquisitions, asset spin-offs, and private equity investments.He has represented clients such as Autodesk, Meta, OpenAI, Splunk, Konami, Kaiser Permanente, SoftBank, Visa, and Yahoo, among others.Aaron has been recognized by numerous publications for his work on market-defining technology transactions. He is currently ranked by Chambers USA for “Technology Transactions.”Aaron also serves as co-editor of Socially Aware, the firm’s award-winning newsletter and blog devoted to the law and business of social media, and regularly publishes on various IP and technology-related topics. Aaron is also a sought-after speaker on new and emerging areas of law, and is a frequent presenter and panelist at conferences and legal services programs. In addition to his active practice, Aaron regularly provides pro bono assistance to various nonprofit and charitable organizations such as Common Sense Media and the Starlight Children’s Foundation. He is a member of the board of directors of California Lawyers for the Arts.While in law school at the University of California, Berkeley, Boalt Hall School of Law, Aaron served as executive editor of the California Law Review and was elected to the Order of the Coif. Following law school, Aaron served as law clerk to the Honorable William H. Orrick and the Honorable Martin J. Jenkins, both United States District Judges for the Northern District of California.

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Aaron is the chair of our Technology Transactions Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals. Aaron’s practice focuses on advising both established and emerging companies in a variety of data– and technology–intensive sectors, including software, SaaS, cloud computing, AR/VR, AI, gaming, healthcare, consumer electronics, social media, e–commerce, other online business models, and mobile applications. He also maintains an active practice counseling companies on the intellectual property aspects of mergers, acquisitions, asset spin–offs, and private equity investments.

Aaron P. Rubin

Lawrence Gallick is of counsel in the firm’s Austin office and a member of the Technology Transactions Group.Lawrence focuses his practice on technology transactions and licensing matters. His diverse experience includes advising on SaaS agreements, cross-licensing agreements, research and collaboration agreements, development agreements, and distribution agreements. He counsels a broad range of companies across the software, hardware, life sciences, biotech and FinTech spaces, as well as other entities including universities.He advises clients in connection with general corporate matters including contract negotiations, and leasing and technology placement agreements.Lawrence also serves as co-editor of <a href="https://www.sociallyawareblog.com/" target="_blank">Socially Aware</a>, the firm’s award-winning newsletter and blog devoted to the law and business of social media, and regularly publishes on various IP and technology-related topics.Prior to joining the firm, Lawrence was counsel at another major law firm. Before earning his law degree, Lawrence was a web consultant, project manager, and web developer in Portland, Oregon, where he managed and consulted on projects using industry methodologies and performed custom development and integration of content management systems.Lawrence was named a Super Lawyers “Rising Star” in 2015 and 2018–2022, and is licensed in both California and New York. Lawrence earned his J.D. from the University at Buffalo School of Law, where he was the electronic systems editor for the Buffalo Law Review and awarded the ABA-BNA Award for Excellence in the Study of Intellectual Property Law.

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Lawrence Gallick

Anthony Ramirez is a partner in the Technology Transactions Group in the New York office of Morrison Foerster.Anthony advises clients on general commercial and transactional matters. He regularly advises companies on the IP aspects of their M&A transactions. His clients include technology, digital media and content for television and music, financial services, and communications companies with diverse intellectual property assets and issues.His practice focuses on the legal aspects of developing, licensing, and commercializing technology and intellectual property, as well as negotiating general commercial contracts, including outsourcing transactions, as well as content and data licenses. He regularly assists clients with legal issues relating to licensing and commercialization of digital media and content, digital content that is distributed over the Internet or streamed, mobile applications and social media, as well as the licensing of recorded music for distribution via digital platforms. Anthony is also experienced with issues relating to open-source software, software development, artificial intelligence and machine learning, cloud-based technology, and protection of proprietary information.Anthony has extensive experience working on matters involving disruptive technologies, such as blockchain. He has helped fintech clients with general intellectual property issues in connection with terms of service for online financial products and services.Anthony is an integral part of the outside pro bono legal team for nonprofit organizations based in New York, including advising clients on legal issues regarding entertainment, social media, privacy rights, and the negotiation of outsourcing and service agreements. Anthony received his J.D. from the University of Michigan Law School in 2009. He received his B.S. from Cornell University in 2004.

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Anthony Ramirez is a partner in the Technology Transactions Group in the New York office of Morrison Foerster. He advises clients on general commercial and transactional matters. His clients include technology, media, and communications companies with considerable intellectual property assets. His practice focuses on the legal aspects of licensing and commercializing technology and intellectual property, as well as negotiating general commercial contracts. He also regularly assists clients with legal issues relating to mobile applications and social media.

Anthony M. Ramirez

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For the last twenty years, the music industry has been in a pitched battle to combat unauthorized downloading of music. Initially, the industry focused on filin

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Will the Music Industry Continue To Win Its Copyright Battle Against ISPs?

Will the Music Industry Continue To Win Its Copyright Battle Against ISPs? | Socially Aware

J. Alexander Lawrence

For the last twenty years, the music industry has been in a pitched battle to combat unauthorized downloading of music. Initially, the industry focused on filing lawsuits to shut down services that offered peer-to-peer or similar platforms, such as <a href="https://www.copyright.gov/fair-use/summaries/a&mrecords-napster-9thcir2001.pdf" target="_blank" rel="noopener">Napster</a>, Aimster and <a href="https://supreme.justia.com/cases/federal/us/545/913/" target="_blank" rel="noopener">Grokster</a>. For a time, the industry started <a href="https://money.cnn.com/2003/09/08/technology/riaa_suits/" target="_blank" rel="noopener">filing claims against individual infringers</a> to dissuade others from engaging in similar conduct. Recently, the industry has shifted gears and has begun to focus on Internet Service Providers (ISPs), which provide Internet connectivity to their users.The industry’s opening salvo against ISPs was launched in <a href="https://arstechnica.com/tech-policy/2014/11/music-publishers-finally-pull-the-trigger-sue-an-isp-over-piracy/" target="_blank" rel="noopener">2014 when BMG sued Cox Communications</a>, an ISP with over three million subscribers. BMG’s allegations were relatively straightforward. BMG alleged that Cox’s subscribers are engaged in rampant unauthorized copying of musical works using Cox’s internet service, and Cox did not do enough to stop it. While the DMCA provides safe harbors if an ISP takes appropriate action against “repeat infringers,” BMG alleged that Cox could not avail itself of this safe harbor based on its failure to police its subscribers.In December 2015, the BMG v. Cox case went to the jury and resulted in a <a href="https://www.reuters.com/article/us-cox-copyright/cox-found-liable-in-piracy-dispute-with-music-publisher-idUSKBN0U02OD20151217" target="_blank" rel="noopener">verdict in favor of BMG</a>. The jury found that Cox’s subscribers had used its service to infringe copyrighted works, and while the jury held that Cox was not liable under a theory of vicarious liability, it was <a href="http://www.project-disco.org/intellectual-property/180205fourth-circuit-decision-cox-v-bmg-provides-clarity-contributory-infringement/" target="_blank" rel="noopener">liable under a theory of contributory infringement</a> for the acts of its subscribers. The <a href="https://www.hollywoodreporter.com/thr-esq/music-publisher-gets-25-million-849829" target="_blank" rel="noopener">jury awarded $25 million in statutory damages</a> to BMG.With the playbook in hand, the music industry has sought to replicate BMG’s success in the Cox case. Record labels have filed a number of additional cases against ISPs alleging they are secondarily liable for the direct copyright infringement of their subscribers under both contributory and vicarious liability theories.<ul><li>In April 2017, a number of record labels filed an <a href="https://dockets.justia.com/docket/texas/txwdce/1:2017cv00365/873439" target="_blank" rel="noopener">action against Grande Communications, a Texas based ISP, in the Western District of Texas</a>. The case is currently scheduled for a jury trial in early 2020.</li><li>In July 2018, a number of record labels (excluding BMG, which had already prevailed against Cox) filed a <a href="https://www.courtlistener.com/docket/7586228/sony-music-entertainment-v-cox-communications-inc/" target="_blank" rel="noopener">follow-on case against Cox in the Eastern District of Virginia based on their own copyrights</a>. The case is currently on the rocket docket moving toward a jury trial in December 2019.</li><li>In March 2019, a number of record labels filed <a href="https://www.courtlistener.com/docket/14785219/warner-records-inc-v-charter-communications-inc/" target="_blank" rel="noopener">an action in the District of Colorado against Charter Communications</a>, one of the largest ISPs in the United States, with more than 22 million subscribers. The case is currently scheduled for a jury trial in November 2020.</li><li>In March 2019, a number of record labels also filed <a href="https://dockets.justia.com/docket/florida/flmdce/8:2019cv00710/361725" target="_blank" rel="noopener">an action in the Middle District of Florida against Bright House Networks LLC</a>, which is now a subsidiary of Charter but was previously one of the top ten ISPs in the country. The case is currently scheduled for a jury trial in early 2021.</li><li>In August 2019, a number of record labels filed <a href="https://www.courtlistener.com/docket/16121275/umg-recordingsinc-v-rcn-telecom-services-llc/">an action in the District of New Jersey against RCN</a>, which is a smaller ISP that provides internet services to customers throughout a number of major metropolitan regions in the United States, including New York, Chicago, Boston, Philadelphia, and Washington D.C. RCN has not yet responded to the complaint, and no trial date has been set.</li></ul>While so far the music industry has had success in these cases, including in establishing liability for contributory copyright infringement in the first Cox case, <a href="https://www.techdirt.com/articles/20180923/12051040696/court-shoots-down-record-labels-attempt-to-expand-definition-vicarious-infringement.shtml" target="_blank" rel="noopener">the industry has been unsuccessful in establishing vicarious liability</a>. In addition to evidence of direct infringement by the subscriber, vicarious infringement would <a href="https://www.law.cornell.edu/wex/vicarious_infringement" target="_blank" rel="noopener">require</a> establishing that the ISP has: (1) the right and ability to supervise the infringing activity, and (2) a direct financial interest in the activity. In these ISP cases, the direct financial interest factor would be the more difficult factor to establish in that ISPs charge infringing and non-infringing subscribers the same amount for the service.Although BMG prevailed in the BMG v. Cox case, the jury rejected BMG’s vicarious infringement claim. Post-trial, BMG moved for judgment as a matter of law on its vicarious infringement claim, and while upholding BMG’s overall win, the district court rejected BMG’s motion for judgment as a matter of law on that claim. The <a href="https://www.leagle.com/decision/infdco20160810c69" target="_blank" rel="noopener">district court held</a> there was substantial evidence supporting the jury’s finding that Cox did not have “an obvious and direct financial interest” in the infringing activity.In the UMG v. Grande Communications case, the district court dismissed the record labels’ vicarious infringement claim, <a href="https://casetext.com/case/umg-recordings-inc-v-grande-commcns-networks-llc" target="_blank" rel="noopener">holding</a> they had “failed to plead facts showing that Grande receives a direct financial benefit from its subscribers’ infringing conduct.”In the Sony v. Cox case, Cox has moved for summary judgment on the record labels’ vicarious infringement claims, but the district court has not yet issued a decision.In both the Warner Bros. v. Charter and the UMG v. Bright House cases, the defendant ISPs filed motions to dismiss the record labels’ vicarious infringement claims clearly feeling they had strong grounds for dismissal. The <a href="https://www.docketbird.com/court-documents/Umg-Recordings-Inc-et-al-v-Bright-House-Networks-Llc/MOTION-to-Dismiss-Plaintiffs-Claim-for-Vicarious-Liability-by-Bright-House-Networks-LLC/flmd-8:2019-cv-00710-00032" target="_blank" rel="noopener">Bright House motion to dismiss</a> remains pending, but the <a href="https://www.courtlistener.com/docket/14785219/71/warner-records-inc-v-charter-communications-inc/" target="_blank" rel="noopener">magistrate judge recently issued a decision on Charter’s motion to dismiss</a>. This time, things did not go well for the ISP on the vicarious infringement question.In rejecting Charter’s motion to dismiss, the magistrate judge first addressed whether Charter has a direct financial interest in the alleged infringement by its subscribers. Charter argued that the subscription fees it charges infringing users constitute only an “indirect benefit” and that “the infringing activity must be more than an ‘added benefit’ to a subscription; it must be the attracting factor, the ‘draw’ for subscribers.” The magistrate judge held that the record labels allege that Charter’s “failure to stop or take other action in response to notices of infringement is a draw to current and prospective subscribers to purchase and use [its] internet service to ‘pirate’ [the record label’s] copyrighted works.” On this basis, the magistrate judge held that the record labels had adequately alleged that Charter has a direct financial interest in the alleged infringement by its subscribers.With respect to the right and ability to supervise the infringing activity, the magistrate judge found that the record labels had made a sufficient showing because Charter “can stop or limit the infringing conduct by terminating its subscribers’ internet access.”It is notable that the Charter decision is at the motion to dismiss stage where the required showing is low. It is a magistrate judge’s decision, and Charter has objected to the decision, so it will be subject to review by the district court.  Thus, Charter may still prevail on the motion to dismiss, obtain dismissal of the vicarious liability claim on summary judgment after discovery, or perhaps ultimately prevail at trial. Also, Charter may be able to establish that it is subject to the DMCA safe harbor and thus avoid a damage award altogether. Nonetheless, the decision is still a notable victory in the music industry’s ongoing battle with ISPs. With so many cases pending, we will see whether the music industry continues to prevail in its effort to hold ISPs liable for their subscribers’ infringement.