More Legal Hacks from Mercora

The stock article about Mercora describes why they’re legal and notes that the RIAA is still annoyed.  I’ve often followed up with posts
describing precisely why what Mercora’s doing is (probably)
legal.  Yesterday, the Mercora folks kindly explained to me a few
complexities I didn’t understand and a couple other ways in which they
tiptoe the letter of the law to deliver some quite interesting
features. They are hacking the law in the best of senses (perhaps a different one than SethF’s). 
But they also described how sometimes they deliberately weaken those
features – and thus limit potential legitimate uses – to steer
clear of any illegal territory.

You know already about how they allow people to stream on-demand by
using webcasting.  Now, Mercora allows you to record some of the
streaming content.  Under Sony, time-shifting is fair use, so the
recorders’ end is covered legally. However, under section
114
(d)(2)(c)(vi), the compulsory license for non-interactive
webcasting requires that :

“the transmitting
entity takes no affirmative steps to cause or induce the making of a
phonorecord by the transmission recipient, and if the technology used
by the transmitting entity enables the transmitting entity to limit the
making by the transmission recipient of phonorecords of the
transmission directly in a digital format, the transmitting entity sets
such technology to limit such making of phonorecords to the extent
permitted by such technology”

Translation: while it might be legal to stream in an unencrypted form
that someone can capture, you can’t help them with the capturing.  

To get around this, Mercora relies on our friends to the north. 
Apparently, Canadian copyright law has no such limitation on webcasting.  So
Mercora performed a little “copyright arbitrage.”  Mercora setup
shop in Canada, and, while you cannot record from US webcasters, you
can record from any Canadian-based webcaster on the Mercora
network.  Again, even someone in the US can do that recording,
because Sony protects the time-shifting.

Undoubtedly, this annoyed some rights holders.  For that reason,
Mercora has chosen to play it a bit conservative.  Mercora has
chosen to encrypt the time-shifted files such that they can’t be copied
or webcasted, to limit time-shifting to 20 hours of music, and to force
songs to expire after 30 days.  Mercora’s offered a feature that
is less useful than it could be in
order to avoid a secondary liability lawsuit. 

This could frustrate some legitimate use; under Sony,
it seems totally legit to time-shift more than 20 hours, and users
might also not have played back the content in that time period. So far as I can
tell and as long as their copyright arbitrage is legit, they certainly could let
people time-shift in unencrypted formats. While moving those files to a
portable player, for instance, might go beyond the protections of Sony‘s time-shifting protections,
that’s not really Mercora’s concern – they’re just a software company,
they’re not making the direct infringement.  Sony probably
protects them because they’re capable of substantial non-infringing
use, but they feel they need to be careful anyway.

So here again is how secondary liability affects design choices in a
very real way.  And, of course, who’s to say Mercora’s crippled
the software enough?  I
think you can play a recorded song multiple times (please correct
me if I’m wrong), but time-shifting under Sony only allows listening once.  

What other features might companies like Mercora have to turn off if Grokster goes the wrong way?

Gearing up for Grokster

I’ll be getting up in about 7 hours to eagerly click away searching for
a decision.  If Monday really is the last decision day, and the
Ten Commandments cases are getting saved for then, then tomorrow’s the
day, right? Right?

Whenever a decision comes down, you’ll be able to find me over at EFF DeepLinks as well as on SCOTUS Blog’s special metablog for the decision, and I intend to cross-post a lot of it over here.  Via Oren Kerr comes word that Randy Picker will also be bringing together  an all-star cast to blog the decision.

Prepare to be thoroughly overwhelmed.