He made the case that unless intellectual property was protected, American business would be threatened as a whole. "The wholesale disregard of copyrights would be devastating to employment and job creation in the U.S.
, and to any chance of making the Internet a boon to us all," said Chernin, who called earlier file-sharing sites as "rogue" companies. He also referred to copyright protection as a "constitutional right." This right has been "threatened by the ease with which people can copy and distribute materials in cyberspace.
" Chernin is faced with having to argue that his company's hugely popular social site MySpace is innocent and shouldn't be penalized for the vast amount of copyright files shared on the site. MySpace, which News Corp. acquired last year for $580 million, is one of the top destinations on the Web, with 115 million members from around the world actively using tools created by MySpace to share all sorts of files and content.
On Friday, Universal Music Group sued MySpace, alleging the social networking site "encourages" users and "facilitates" the uploads of millions of Universal's songs and videos onto the Internet in violation of copyright law. News Corp. has "turned MySpace Videos into a vast virtual warehouse for pirated copies of music videos and songs," Universal's attorneys argued.
Universal is seeking damages of $150,000 per song or video posted to the collection of Web sites, and identifies 60 alleged copyright violations. In response to the suit, News Corp. says it's in "full compliance" with the Digital Millennium Copyright Act, the 1998 law at the center of the dispute, and claims it works to keep out unauthorized recordings.
As recently as Nov. 8, during News Corp.'s quarterly conference call with Wall Street analysts, Chernin said the company is "committed to being in the forefront of copyright protection.
" He added that in "order to comply with the Digital Millennium Copyright Act, a lot of what we're dependent upon is notifications from record companies or copyright holders that there's illegal content, in which case, we immediately take it down. We have a full department that's just aimed at taking it down," he said. Chernin may sound as fervent about complying with the law as he was five years ago over the need to stop copyright pirates from hurting the American economy.
Yet the Digital Millennium Copyright Act is akin to a free pass. It's become the "Get out of Jail" card that protects a company from liability even though copyright infringement has already taken place. Chernin is citing compliance with a law that quickly became outdated: its provisions never addressed rampant file-sharing taking place across social networks like MySpace, YouTube and Grouper.
Grouper, which is part of Sony, was recently sued by Universal in a case similar to its complaint against MySpace. "It's rather hard to imagine Peter Chernin making that argument in court, what with his well-known extremist views on copyright," said Fred von Lohmann, senior intellectual property attorney at Electronic Frontier Foundation, who refers to Chernin as a copyright hardliner and the father of the "broadcast flag," a piece of code attached to content to indicate whether it can be copied or not. "Like Sony before it, Fox suddenly looks like a house divided against itself.
" To be fair, Chernin and rival media companies find themselves in a tough position. "Be it News Corp., Sony or any persons who own a major Hollywood studio, there is a balancing act that must exist, and they all recognize it over time," said Mark Litvack, an intellectual-property litigator at Manatt, Phelps Phillips.
But let me propose that if Chernin is truly dedicated to the cause of copyright protection, rather than holding up the Digital Millennium Copyright Act as a defense to skirt any responsibility MySpace has, he would argue for an amendment to the law. When the legislation was enacted in the late '90s, lawmakers didn't anticipate a world in which content could be shared with millions across social networks as easily as it is today. "What the DMCA anticipated was the world being a series of static Web sites, and the (Internet service provider) not profiting from the content of the Web site," said Litvack.
"That's not how the world has developed." Of course, it also might be a tall order to make changes to the law. Given that challenge -- and Chernin's own high principles -- I'd imagine he'd hold MySpace to the same high standard.
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