Is the U.S. DOJ pushing its luck with aggressive criminal copyright prosecutions?

Our book, The Knockoff Economy, argues that in a lot of instances innovation and creativity can co-exist quite nicely with imitation — even when it takes the form of copyright piracy. But of course not everyone agrees with us. And lately the U.S. government has been pushing very hard to criminally prosecute copyright infringers. Back in January, the DOJ indicted the principals of Megaupload, a big filesharing service based in New Zealand and Hong Kong (the pic above is of Megaupload’s Kim Dotcom speaking to the press after being released on bail).  And in May 2011, the DOJ indicted U.K. student Richard O’Dwyer, who ran a search engine, TVShack.com, that provided links to pirated American TV programs and films. But in the end, these prosecutions will most likely do little to curb piracy.  In fact, it’s more likely they will come to represent the limits of criminal copyright enforcement.

Why?  In the Megaupload case, a New Zealand High Court judge recently ruled that the search warrant used to seize assets and data from the Aukland home of Megaupload impresario Kim Dotcom was illegally obtained, and the materials wrongfully taken. And the colorful and articulate Kim Dotcom himself is quickly becoming a New Zealand folk hero, which threatens to complicate the DOJ’s bid to have the New Zealand government extradite him to the U.S.  Worse, even if the DOJ succeeds in bringing Kim Dotcom to the U.S., it’s far from clear that they can convict him in federal court — as Stanford Law School criminal law specialist Jennifer Granick has pointed out, the government’s theory of criminal liability in the Megaupload case has some real problems.

The DOJ faces even bigger difficulties in the O’Dwyer case. The U.K.’s Home Office has just ruled that it will not block O’Dwyer’s extradition, but O’Dwyer will continue to pursue relief in the U.K. courts. And it’s possible that he may prevail. His website did not host infringing content, but merely provided links, which is something that U.K. courts have already ruled is legal. O’Dwyer cannot properly be extradited to the U.S. for engaging on U.K. soil in an activity that is not a crime in the U.K. This is true especially because there are precious few links between O’Dwyer’s conduct and the U.S. that would justify the DOJ’s extraterritorial assertion of criminal jurisdiction. The sole link asserting in the U.S. indictment is that Verisign, the official registrar of all .com sites, is located in the U.S. Which would mean that the United States government is claiming worldwide criminal jurisdiction over intellectual property violations committed using any .com website. That’s a pretty big claim. There just might be some pushback.

The broader point is this: criminal copyright enforcement is expensive and uncertain, and the difficulties are magnified enormously where, as in the Megaupload and O’Dwyer cases, the allegedly infringing conduct occurs abroad. For those reasons, the DOJ is unlikely ever to devote enough resources to criminal copyright prosecution to put a serious dent in the rate of copyright piracy. So it’s time for people to start thinking about how creativity and innovation can thrive in a world where there is piracy — even if there’s a lot of it.  And that’s what The Knockoff Economy is about.

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