Connect with us

Business

Supreme Court makes it harder for music and movie makers to sue for online piracy

Published

on

Supreme Court makes it harder for music and movie makers to sue for online piracy

The Supreme Court on Wednesday made it harder for music and movie makers to sue for online piracy, ruling that internet providers are usually not liable for copyright infringement even if they know their users are downloading copyrighted works.

In a 9-0 decision, the justices threw out Sony’s lawsuit and a $1-billion jury verdict against Cox Communications for copyright infringement.

Lower courts upheld the lawsuit against Cox’s internet service for contributing to music piracy, which the company did little to stop.

Sony’s lawyers pointed to hundreds of thousands of instances of Cox customers sharing copyrighted works. Put on notice, Cox did little to stop it, they said.

But the high court said that is not enough to establish liability for copyright infringement, which remains a hot button issue in the music and film industries with the advent of AI tools that have spread the misuse of copyrighted content and sparked lawsuits between studios and AI companies.

Advertisement

“Under our precedents, a company is not liable as a copyright infringer for merely providing a service to the general public with knowledge that it will be used by some to infringe copyrights,” Justice Clarence Thomas wrote for the court.

Two decades ago, the court sided with the music and motion picture producers and ruled against Grokster and Napster on the grounds their software was intended to share copyrighted music and movies.

But on Wednesday, the court said “contributory” copyright infringement did not extend to internet service providers based on the actions of some of their users.

“Cox provided Internet service to its subscribers, but it did not intend for that service to be used to commit copyright infringement,” Thomas said. “Cox neither induced its users’ infringement nor provided a service tailored to infringement.”

Mitch Glazier, the chairman of the Recording Industry Assn. of America, said he was “disappointed” in the court’s ruling, as the case was “based on overwhelming evidence that the company knowingly facilitated theft.”

Advertisement

“To be effective, copyright law must protect creators and markets from harmful infringement and policymakers should look closely at the impact of this ruling,” Glazier said in a statement. “The Court’s decision is narrow, applying only to ‘contributory infringement’ cases involving defendants like Cox that do not themselves copy, host, distribute, or publish infringing material or control or induce such activity.”

Karyn Temple, senior executive vice president for the Motion Picture Assn., said in a statement that the decision “upends the critical legal doctrine of contributory infringement for copyright.” She added: “Unfortunately, the Court’s opinion today ignores this well-established rule and congressional intent, which is particularly disappointing amidst a growing consensus about the need for more accountability for facilitating harmful online conduct, not less.”

In its defense, Cox argued that internet service providers could be bankrupted by huge lawsuits for copyright infringement, which they said they did not cause and could not prevent.

“The decision means that the Supreme Court isn’t coming to the entertainment industry’s rescue,” said attorney Michael K. Friedland. “The copyright infringement problem is a technological problem. The modern internet makes infringement really easy. The decision means that the industry is going to have to solve the problem itself — by developing its own better technology to protect its intellectual property.”

Rachel Landy, who teaches copyright law at Cardozo Law School in New York, said the music industry has no good options and may need to go to Congress.

Advertisement

“The record industry could go after the individual users who share works online without authorization, but that led to suboptimal outcomes in the past: bad publicity and judgment-proof defendants,” Landy said. “And now, the court has narrowed the contributory liability doctrine such that they are also unlikely to get recourse from the deeper pockets. It may be that their best recourse is to go to Congress for a fix.”

The American Civil Liberties Union and the Center for Democracy and Technology joined the case in support of Cox and welcomed the decision.

It is “a win for freedom of speech,” said Samir Jain, a CDT attorney. “If the court hadn’t decided in favor of Cox, it would have turned internet service providers into censorship machines acting on behalf of powerful rights-holders.”

Times staff writer Cerys Davies in Los Angeles contributed to this report.

Advertisement

Business

Read Nick Bilton’s Letter to Scott Pelley

Published

on

Read Nick Bilton’s Letter to Scott Pelley

Dear Mr. Pelley:

I meant what I said in my letter last week to the 60 Minutes team: joining 60 Minutes is the honor of my career and I am grateful to be working alongside the people who have contributed to the most important television journalism brand this country has ever produced. While I’m new to 60 Minutes, I’ve devoted my career to investigative journalism and storytelling. I started this job excited to collaborate and to benefit from the wisdom and experience of the 60 Minutes veterans, with you among them. For that reason, one of the first things I did in my new role was call you to talk and invite you to dinner. It is a profound disappointment that you rejected that overture and chose ambush instead. Yesterday, you hijacked my first meeting with staff to disparage me, my qualifications, and my intentions with remarkable incivility and contempt. I welcome a diversity of viewpoints and respectful debate among the team, but this was nothing of the sort. Yesterday’s performative display of hostility enacted in front of the staff instead of in a civil, private conversation-demonstrated that you have no interest in contributing to the future success of the show, or approaching my new tenure with a mind open to collaboration and progress. I am here to deliver first-in-class news programming, not to make headlines about newsroom drama. I am eager to work alongside those who share this goal.

Despite yesterday’s misconduct, I had hoped that in sitting down with you today we could find a path forward together. You made clear that you are not interested in such a path.

Your antipathy to the future of the show has come through loud and clear. And I have heard you. I therefore write on behalf of CBS News, Inc. (“CBS”) to inform you that your employment with CBS is terminated for cause effective immediately. Enclosed is your formal termination letter.

Sincerely,

Nick Bilton

Executive Producer, 60 Minutes

Continue Reading

Business

Aspiration co-founder sentenced to 14 years for fraud

Published

on

Aspiration co-founder sentenced to 14 years for fraud

The co-founder of Aspiration, Joseph Sanberg, was sentenced to 14 years in prison on Monday after defrauding investors and lenders of over $248 million.

The startup, an eco-friendly digital banking company boasting fossil fuel-free investments, carbon offsets for gas purchases, and a debit card with cash-back benefits for shopping at clean companies, was founded by Sanberg and Andrei Cherny. Cherny left the company in 2022 and has not been charged.

Sanberg, an Orange County native, pleaded guilty to wire fraud in October after being arrested in March last year. Aspiration subsequently filed for bankruptcy and liquidated all of its assets by July.

Sanberg and venture capitalist Ibrahim AlHusseini, who also faces charges, together forged a series of bank statements in order to obtain loans. From 2020 to 2021, the pair forged AlHusseini’s bank statements to show millions of dollars in assets in order to obtain millions of dollars from lenders.

Advertisement

Additionally, they forged a letter from their audit committee stating that $250 million in funds were available, when in reality Aspiration had less than $1 million. The amount of loans defrauded exceeded $248 million.

In 2021, Sanberg artificially inflated Aspiration’s 2021 revenue by $44 million by recruiting 27 fake customers to sign letters of intent pledging tens of thousands of dollars per month for tree planting services. Sanberg himself funded the contracts and used the inflated revenue numbers to obtain more loans.

The charges sparked an NBA investigation into salary cap allegations due to Aspiration’s connections with Clippers owner Steve Ballmer.

Ballmer personally invested $60 million in Aspiration, all of which was lost. He is now the target of a civil lawsuit alleging his participation in the scheme. Ballmer denies the allegations.

The team announced a $300-million sponsorship deal with Aspiration, and Clippers player Kawhi Leonard signed a four-year, $28-million marketing contract with the company, which reportedly performed no duties. The issue has raised concerns about how players are circumventing the NBA’s salary cap.

Advertisement

The team lost the $300-million sponsorship deal and an additional $20 million paid for carbon offset purchases.

Continue Reading

Business

Monterey Park takes landmark vote on banning data centers

Published

on

Monterey Park takes landmark vote on banning data centers

Residents in the city of Monterey Park will be the first in the nation to vote on a permanent ban on data centers Tuesday.

If approved, Measure NDC would prohibit data centers within the city limits and could only be overturned by another vote.

Yard signs saying “No Data Center” in English and Chinese with images of dragons line sidewalks in the San Gabriel Valley city.

As a wave of data center opposition sweeps the country, numerous towns and counties across the U.S. have instituted temporary moratoria and other restrictions on the facilities. But only a handful have instituted indefinite bans, and just four other towns have sent related matters to the ballot.

Advertisement

Supporters are hoping the vote will set a precedent for the rest of the region, where residents are fighting proposals in Vernon and City of Industry.

“This is about as permanent a ban as we can get,” said Steven Kung, co-founder of the group No Data Center Monterey Park. “Winning Measure NDC would send a huge message to the rest of the San Gabriel Valley about how residents don’t want data centers.”

The ballot measure emerged from the fight against a 247,000-square-foot center proposed in 2024 by the Australian-owned investment firm HMC StratCap for a residential area in Monterey Park.

The facility would have sat less than 500 feet away from the nearest home and used three times the electricity of the 60,000-person, predominantly Asian American city.

While the developer touted the potential for jobs and tax revenue, residents expressed concerns about noise and air pollution, rising electricity rates and a potential to lower property values.

Advertisement

The company pulled its plans in late March following public outcry and a March 4 city council vote to extend a temporary data center moratorium and place a ban on Tuesday’s ballot.

In a letter to the city council, HMC StratCap said it would pursue a different use for the land and would not engage in a ballot measure fight.

The city council later banned data centers indefinitely, the first in California to do so, said Mayor Elizabeth Yang. But she’s still been out campaigning for the measure with all four other council members.

“If a council puts in an ordinance, a future council can reverse it too,” said Yang. “With the ballot measure, unbanning it is a lot harder because you need the entire city to vote on it.”

The measure proposes the ban “to protect air quality, drinking water resources, and public health” and “prevent impacts to electricity and water rates.”

Advertisement

While California places third in the country for existing data centers with about 300 facilities, it hasn’t been a hot spot in the recent AI-driven data center boom. High electricity rates, expensive land and regulatory hurdles mean that fewer, and smaller, facilities are currently planned than in Virginia, Texas, Georgia, Illinois or Arizona.

“Most of California’s data centers are small by today’s standards,” said Shaolei Ren, an engineering professor at UC Riverside who studies how to reduce the environmental impacts of data centers. “Ten years ago, they would be medium-sized, but the power demand for new AI data centers has increased a lot.”

The average operating data center demands 45 megawatts, according to the Washington Post, while the average planned one would draw 430 MW. The one proposed for Monterey Park would have required about 50 MW at peak demand.

As proposals crop up in SoCal, they’re met with fierce opposition. Montebello, El Monte and Baldwin Park have all enacted temporary moratoria, and Alhambra recently banned data centers as part of a zoning code update. City of Industry, Vernon, City of Commerce and Santa Fe Springs are moving in the other direction, trying to court developers and streamline data center approvals. Community groups are fighting that.

Outside the San Gabriel Valley, residents of Coachella and Imperial County are showing up in droves to protest local proposals.

Advertisement

Matthew Shaw, a volunteer with the Coalition for Responsible Data Center Development, who recently published a report on opposition to AI data centers, said a vote to ban them in Monterey Park “would lead to copycats, partially because so many groups are just opposed to any data center development at all.”

While there is no formal opposition to Measure NDC, some building trades like Ironworker Local 433 supported the Monterey Park data center when it was still live before city council. Those in the data center industry are lamenting the state of public opinion.

“These are multi-billion-dollar assets that are built by multi-trillion-dollar companies. These things will get done,” said Mehdi Paryavi, chairman of the International Data Center Authority. “My biggest problem is that our industry does not invest enough in community engagement.”

Paryavi said towns that seek to limit data centers are missing out on thousands of jobs generated by data center construction, operations and customers, as well as faster artificial intelligence speeds and better performance.

Kung said local community organizers are “looking at the empirical evidence” and seeing a ban as a win.

Advertisement

“We’ve never seen a city that embraces a data center and is like, ‘Look how our quality of life has increased, look how all the revenue has gone into citywide improvements,’” he said. “That just doesn’t exist.”

Continue Reading
Advertisement

Trending