Why The Circumvention of Geoblocks SHD Be Illegal
Why The Circumvention of Geoblocks SHD Be Illegal
Why The Circumvention of Geoblocks SHD Be Illegal
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VOL.15:1 VIRGINIA SPORTS AND ENTERTAINMENT LAW JOURNAL FALL 2015
Note
The Thrill of Anticipation: Why the
Circumvention of Geoblocks Should be
Illegal
Michelle Edelman*
I. INTRODUCTION
Alfred Hitchcock said it best when he said "there is no terror in the bang,
only in the anticipation of it."I What has happened to the concept of patience, of
waiting, of anticipation? Today's culture thrives on instant gratification.
Consumers have become like petulant children who want media content now,
whatever the cost. This sense of entitlement comes at the expense of copyright
holders. In a desire to gain access to content before it is legally available in one's
country, consumers have turned to circumventing geoblocks to satiate their appetite
for immediacy.
Media companies, and film studios in particular in the U.S., make a large
part of their profits on a timed-window release system: movies come out in theatres
before they are available to rent, before they are available to stream. This timed
release includes a geographic component: movies (theatrical, home video, or
streaming) are made available in some countries before others to allow for the
effectiveness of ad campaigns, to tailor to the specific tastes of different markets,
and to license content by territory. This is the model the film studios have been
built on and as copyright holders, have the right to enforce. In order to protect this
right, film studios have relied on companies they license their content to, such as
Netflix 2 , Hulu, and others, to enforce these geographic restrictions. Some of these
J.D., The George Washington University Law School; M.A., Courtauld Institute of Art; B.A.,
Northwestern University.
Biographies - Alfred Hitchcock, History, http://www.history.co.uk/biographies/alfred-hitchcock
thttp://perma.cc/KJH5-YY75] (last visited Apr. 20, 2015).
This paper focuses on Netflix as the main example of a streaming content provider because it is the
most prominent in the marketplace, while recognizing that there are several streaming providers
available (Hulu, Amazon Prime, Vudu, Itunes, etc.).
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Netflix must implement geoblocks to restrict access to the copyrighted work it has
access to. This paper posits that while liability for circumvention can be argued for
each possible category of infringer (user, third party circumvention site, and
streaming content provider), the most practical way to curtail the circumvention of
geoblocks is to put further contractual pressure on streaming content providers. A
heightened burden to implement counter-circumvention measures would best
remedy the harm caused to media content creators by the circumvention of
geoblocks. Until "best technological measures available" becomes the industry
standard to combat geoblock circumvention, circumvention will remain a thriving
continuing problem.
7Tal Kra-Oz, Geoblocking and the Legality of Circumvention, SSRN I (Nov. 15, 2014),
http://ssrn.com/abstract=2548026 [http://perma.cc/3794-XVE2].
Karl Schaffarczyk, Explainer: What is geoblocking?, The Conversation
(Apr. 17, 2013 12:31AM),
http://theconversation.com/explainer-what-is-geoblocking-13057 [http://perma.cc/EK6X-LG7F].
Angus Kidman, Five Reasons Why Regional Delays Still Exist, Lifehacker (Dec. 1, 2011, 11:30
AM), http://www.lifehacker.com.au/2011/12/five-reasons-why-regional-delays-still-exist/
[http://perma.cc/JUT7-LE4P].
:o Kra-Oz, supra note 7, at 1.
1 Kidman, supra note 9.
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who are more familiar with the specialized markets they distribute to.12 Summer
blockbusters released in the U.S. and Europe are more relevant in the Southern
hemisphere during their corollary summer months.' 3 As technology and platforms
for content developed, Hollywood's staggered releases reacted accordingly to
maximize profits.1 4 As a recent study conducted by KPMG LLP for NBCUniversal
reported, the average time period between a film's theatrical release and its
availability in digital form has decreased since 2000 from an average of 55 months
to an average of 3 months in 2013.15 With the rise of video on demand, and
streaming content providers such as Netflix, the windowing system has started to
collapse, or at least shift, as Hollywood tries to figure out the best strategy for when
and where to release content.' 6
Geoblocking is not a one-sided affair advocated by Hollywood.
7
Governments also have an interest in creating territorial boundaries on the internet.'
As Associate Professor of law Marketa Trimble at the University of Nevada notes,
"governments seek ways to protect their citizens from the influx of certain content,
website operators search for workable solutions to partition cyberspace in order to
both secure compliance with territorially-limited regulation and enforcement and
take advantage of the partitioned cybermarket."' 5 Governments and courts have
9
begun mandating the use of geoblocking tools in order to comply with local laws.'
However, not all governments have been eager or willing to enforce territorial
boundaries in cyberspace. Consumer frustration with geoblocks in Australia and
New Zealand has led the Australian government to advocate for a consumer right to
circumvent geoblocks.20 In July 2013, the Australian House of Representatives
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There are a wide variety of third party geoblock circumvention sites such
32
as Unblock-US whose sole purpose is to offer subscriptions to unblock the
geographic restrictions set up by streaming content providers. The most common
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types of circumvention mechanisms are VPNs, DNS proxies, and browser plugins.
VPNs (Virtual Private Networks) essentially create a tunnel between the user's
computer and a remote server (another computer) located in the US (or other
country of interest). A DNS proxy takes a user request for a website and
substitutes into the request an IP address located in the country of the streaming
provider. Browser plugins work similarly to DNS proxies but are tied to a specific
browser on a user's computer. Both of these methods trick the streaming provider
into believing the user's computer is in the same country as the content provider,
and thus deliver content that would otherwise be restricted.3 4
Unblock-Us uses a VPN system to provide circumvention. According to
the advertisement on their website, "every computer or other Internet-enabled
device has an address. It's made up of numbers, like a street address. Our solution is
brilliantly simple. We give you an address where the content you want is available.
35
It's like moving your computer or other device without actually moving it."
Unblock-Us makes no attempt to hide the service it offers to the public. This
service is circumvention. Geoblocks are in place to control access to copyrighted
work and by using a VPN, DNS, or Browser plugin to trick the streaming provider,
the third party provides a way to circumvent the technological measure in place
without the consent of the copyright owner.
Under the DMCA, there can be little doubt that geoblock circumvention is
illegal. While there has yet to be precedential case law on point in the U.S.3 6
regarding the legality of circumventing geoblocks, there are strong arguments for
liability of the users who do the circumventing, third party services that enable
circumvention, and even content providers who fail to do enough to prevent
circumvention.
Possible theories of liability include: (1) direct infringement and
contributory infringement against third party circumvention sites under the DMCA
§ 1201, which makes it illegal to offer to the public a service that is primarily
designed to circumvent a technological measure, such as geoblocking, that controls
access to the copyrighted work;37 (2) direct infringement against the user for
circumventing the technological measure of geoblocking that controls access to the
copyrighted work; and (3) vicarious liability against the streaming provider, if it
3 Alex Goldstein, What Is The Difference Between A VPN Service And A SmartDNS Router Setup?,
FlashRouters (May 2, 2014), http://www.flashrouters.com/blog/2014/05/02/what-is-the-difference-
between-using-a-vpn-service-and-smartdns-router-setup/ [http://perma.cc/EY6U-RWEV].
34 Id.
3 Unblock-Us, supra note 32.
There is a California central district court case on point that has been settled out of court; see TVB
Holdings, Inc., v. Tai Lake Commc'ns, No. CVl2-09809, 2013 WL 6417330 (C.D.Cal. Oct. 1, 2013).
n 17 U.S.C. § 1201 (1996).
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could be shown that the provider has the potential to control the circumvention of
geoblocks and receives a direct financial benefit from the infringing activity.
1. Direct Infringement
(B) has only limited commercially significant purpose or use other than to
circumvent a technological measure that effectively controls access to a work
protected under this tile; OR [emphasis added]
(C) is marketed by that person or another acting in concert with that person
with that person's knowledge for use in circumventing a technological measure that
3
effectively controls access to a work protected under this title. 8
The main issues under the statute relate to what counts as a "technological
measure," what constitutes "effectively controls access to a work," and what
qualifies as "circumvention of a technological measure."
38 Id.
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a. "[T]echnological [M]easure":
3 Id. at § 1201(a)(3)(B).
40
Id. at § 106.
41 See id. at § 1201(a)(3)(B).
42 Id. at § 1201(a)(3)(A).
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43 Shane Dingman and Jeff Gray, What's a VPN, are they legal and does Netflix care Canadians use
them?, The Globe and Mail (Jan. 9,2015), http://www.theglobeandmail.com/technology/what-is-a-
vpn-are-they-legal-and-whos-not-happy-canadians-are-using-them/article22363040/
http://perma.cc/S6QG-HJPN].
17 U.S.C. § 1201(a)(2)(A).
4 Id. at § 1201(a)(2)(B).
4 See Unblock-Us, supra note 32.
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47 TVB Holdings, Inc., v. Tai Lake Commc'n Inc., No. CVI2-09809, 2013 WL 6417330 (C.D.Cal.
Oct. 1, 2013).
48 Complaint and Demand for Jury Trial, Tai Lake Commc'n Inc., No. CV 12-098909, 2012 WL
5903313 (C.D.Cal. Nov. 15, 2012).
49 Id.
5o Id.
51
Id.
52 Motion for Injunctive Relief, Tai Lake Commc'n Inc., No. CV 12-09809,
2014 WL 2999865,
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2. Contributory Infringement
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infringement.
B. The User
5 17 U.S.C. § 1201.
5 Id. at § 1201(a)(3)(B).
" Id. at § 1201 (a)(3)(A).
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alternative being to go against the distributor of the copying device for secondary
liability."s9
1. Vicarious Liability
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is changing with the circumvention of the geoblock is the content that the user can
access. The user still needs a Netflix account to get content. Therefore, when a user
circumvents the geoblock, a streaming provider receives additional revenue from
the infringing activity. This benefit could suggest why streaming providers are not
more active in implementing further technological security measures to stop the
circumvention of geoblocks. There is not enough of a financial incentive for
companies such as Netflix to further invest in counter measures to fend off the
circumvention of geoblocks. However, courts might not agree that this qualifies as
a financial benefit. In Viacom v. YouTube, the court explained that "a service
provider conducting a legitimate business would not be considered to receive a
'financial benefit directly attributable to the infringing activity' where the infringer
makes the same kind of payment as non-infringing users of the provider's
service."63 While the court analyzes this prong in relation to an ISP (Internet
Service Provider), which Netflix is not, it is possible that a court would follow the
same line of reasoning with regards to Netflix because at issue in both cases is
vicarious liability. If a court were to follow Viacom's reasoning, then Netflix would
not be liable for vicarious liability precisely because users who circumvent
geoblocks still pay for a Netflix subscription. Thus, the arguments against a content
streaming provider for vicarious liability are not entirely persuasive and would
likely not be an effective means of curtailing geoblock circumvention.
2. Contributory Infringement
6 Viacom Int'l Inc., v. YouTube, Inc., 718 F. Supp. 2d 514, 521 (S.D.N.Y. 2010).
64 Grokster, 545 U.S. at 913,
916.
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duty to monitor their users' activity, this evidence underscores their intentional
65
facilitation of their users' infringement." This situation is not exactly the same as
the one before us as sites such as Netflix are not the ones providing the
circumvention technology. Arguably, Netflix's lack of filtering to stop
circumvention facilitates the infringement. However, because Netflix is not the one
providing the circumvention technology, a court might have trouble finding
inducement. Thus, while Netflix may induce infringement by its lack of counter-
circumvention measures, a court will likely not find this a strong enough argument
to hold Netflix liable for contributory infringement.
65 Id.
6 Kra-Oz, supra note 7, at 12.
61 Id. at 27.
68 Id.
6 Id. at 32.
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more narrowly tailored version of the My Expat Network site could achieve the
proper balance. The use of a digital passport could make a user prove country of
residence in order to access content while abroad.
Under the DMCA, the Librarian of Congress can create exemptions to the
anti-circumvention provisions of § 1201 for noninfringing uses of copyrighted
76
works. One such exemption could be for U.S. citizens accessing U.S. content
while traveling abroad. However, there are certain problems with such an
exemption. First, there might be significant hurdles in getting the exemption. The
Librarian of Congress makes the determination to grant the exemption based on the
factors set out in 17 U.S.C. § 1201 (a)(1)(C):
(i) the availability for use of copyrighted works;
(ii) the availability for use of works for nonprofit archival, preservation,
and educational purposes;
(iii) the impact that the prohibition on the circumvention of
technological measures applied to copyrighted works has on criticism,
comment, news reporting, teaching, scholarship, or research;
(iv) the effect of circumvention of technological measures on the market
for or value of copyrighted works; and
77
(v) such other factors as the Librarian considers appropriate.
The best argument for granting the exemption would fall under (iv) and
(v): that the circumvention in the limited circumstance of a traveller abroad
accessing his Netflix account does not have a negative impact on the market or
value of the copyrighted work. In these cases, travelers would already have
subscriptions to Netflix accounts. Therefore, they would not harm the market for
the work because they are already paying for the content. In this way, cybertravel
could be equated to physical travel and would be protected for the same reasons we
protect physical travel: encouraging people to travel to learn about other cultures
and practices, understanding of other societies, enriching learning.8 Or, on a more
proprietary level, people should have access to content they have paid for.
Getting the Librarian of Congress to grant this exemption would only be
the first step in a convoluted process. The second problem is that these exemptions
only last three years.7 9 Every three years, one has to reapply for the exemption.
Therefore, this would create uncertainty about the legality of geoblock
circumvention for travelers. One year it could be legal, the next it might not be. In
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VI. REMEDIES
A. Damages Available
Under § 1203 of the DMCA, a court may grant civil remedies for the
circumvention of technological measures that effectively control access to a
copyrighted work. This includes monetary damages and equitable remedies such as
injunctions.8 2 In addition, §1204 of the DMCA provides for criminal penalties for
those who "willfully and for purposes of commercial advantage or private financial
gain"8 violate § 1201 or § 1202 of the DMCA. One can be fined for such
violations and/or get a prison sentence for up to ten years.84 These remedies are
similar to those provided for in the Copyright Act of 1976. Depending on which
party a copyright holder chooses to go after, a different remedy will be applicable.
Civil fines would make sense against the individual users of third party
circumvention sites. Civil fines could also be imposed on the streaming content
providers such as Netflix. The powerful remedies of both injunctions and criminal
sanctions could be imposed on third party circumvention sites such as Unblock-Us
because these sites "willfully" provide circumvention services for "financial gain."
ld. at § 1201(a)(1)(D).
Io
Id. at § 1201(a)(1)(A).
82 Id. at § 1203 (2010).
83 17 U.S.C. § 1204 (2010).
8 Id.
8s Id.
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B. Solutions
A copyright holder has the exclusive right to decide how, when, where,
and if to distribute content. The circumvention of geoblocks violates this right.
With the expansion of the internet, protecting copyright holders' interests has
become exponentially difficult. If society fails to protect these rights, artists and
authors will lose incentives to create, or at least to share their creations with the
public. As provided for in the Constitution, "Congress shall have Power... To
promote the Progress of Science and useful Arts, by securing for limited Times to
Authors and Inventors the exclusive Right to their respective Writings and
,,86
Discoveries. In order to fulfill this mission of promoting the arts, we need to
continue to offer artists and authors protection of these rights. Enforcing geoblocks
is one small way to protect a copyright owner's distribution right.
The challenge in stopping the circumvention of geoblocks is figuring out
the most effective way to do this. Going after the individual user of sites such as
Unblock-Us is not only impractical and ineffective but near impossible. This
presents the classic whack-a-mole problem so common with internet copyright
infringement: when one infringer is shut down, another infringer pops up
somewhere else. Therefore, while there would be a cause of action for direct
infringement against the users of third party circumvention sites under the DMCA,
pursuing this course of action would not be the most beneficial. This leaves the
third party sites such as Unblock-Us and the streaming content providers such as
Netflix.
From a practical standpoint, shutting down third party sites such as
Unblock-Us would be an easier target than attempting to stop every individual user
of these sites. However, this strategy could still present a whack-a-mole problem,
though on a less massive scale. These sites are clearly in violation of the plain
language of the DMCA by providing services that circumvent the technological
measure of geoblocking that controls access to copyrighted work. Therefore, the
MPAA, representing copyright holders, could sue these sites and hope for a court
ruling in their favor.
In conjunction with this effort, the MPAA could also sue streaming
content providers such as Netflix for a breach of contract for not adhering to the
terms of the licensing agreements from the major Hollywood studios. If the MPAA
could get a court to declare Netflix's lack of counter-circumvention measures
vicarious copyright infringement, this would set an example and induce other
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on the actual licensing agreement in place, it suggests that Netflix must use an
"industry standard geolocation service" to counteract circumvention." While this
geofiltering provision sets a minimum for sites such as Netflix to comply with, it
does not go far enough. There needs to be a "best technological measures
available" standard established in contract language to counter-circumvention.
Without this high standard, geoblocks will remain largely ineffective. Attorney
James Nguyen explains that "for the technology platform, it will not want to agree
to use the best DRM and geofiltering systems available at any given time but will
instead prefer to use what is acceptable or customary in the industry." 92 While
imposing a higher burden of using the best technologically available measures to
counter-circumvention might be preferable, Nguyen may be right both from the
perspective of the streaming provider and legal standards. Though not a provision
of the DMCA, § 512 of the Copyright Act of 1976 that deals with safe harbor
provisions for internet service providers, uses the language of "standard
technological measures." 93 The statute defines "standard technological measures"
as:
"technical measures that are used by copyright owners to identify or
protect copyrighted works and-
[http://perma.cc/2ZB9-W87D].
91 Id.
92 Nguyen, supra note 89, at 23.
93 17 U.S.C. § 512(i)(2) (2010).
9 Id.
9s Terms of Use, supra note 6, at c.
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remove, alter, deactivate, degrade or thwart any of the content protections in the
Netflix service."96 Through this, Netflix acknowledges its duty to protect the
geoblocks it has put in place. But putting the duty on users not to circumvent
geoblocks is not good enough. First, no one (except law students) reads terms of
service. Second, even if someone reads the terms of service, a warning not to
circumvent a technological measure will likely not stop someone who is planning
on circumventing. The warning could be effective for the rare person who is
concerned with falling within the bounds of what is legal and is considering
circumvention. The number of people a terms of service warning will deter is few.
Therefore, Netflix needs to be doing more to combat geoblock circumvention.
There have been conflicting reports recently on Netflix's actions in regards
to counter-circumvention measures. According to an article on TorrentFreak,
"Netflix is reportedly testing a variety of blocking methods. From querying the
user's time zone through the web browser or mobile device GPS and comparing it
to the timezone of their IP-address, to forcing Google's DNS services in the
Android app." 97 Apparently the Android app makes it harder for users to use DNS
location unblockers.9 8 Sites such as Unblock-Us have had trouble circumventing
geoblocks through the Android app since Netflix has reportedly "hardcoded
Google's DNS servers."9 In response to reports of Netflix cracking down on
geoblock circumvention, Netflix released a statement that the circumvention of
geoblocks has always been against its terms of service but did not deny or confirm
that it was changing its policy on how it treats VPNs.1oo While there is some
controversy over what Netflix is doing to combat circumvention, there is clearly
something in the works and large scale awareness of the massive problem of
geoblock circumvention. Right now, circumvention sites do not seem too
concerned about the alleged Netflix crackdown. According to PcPro author Adam
Shepherd, "TorGuard, the VPN service that initially reported the problems, has
pledged to develop simple workarounds if and when the blocks are fully
implemented, along with competitors such as Unblock-Us."1oI In order to combat
96 Id. at e.
9 Van der Sar, supra note 90.
9 Id.
Jan Willem Aldershoff, Nettlix making effort to block geoblock circumvention, Myce (Dec. 30,
2014, 7:36 PM), http://www.myce.com/news/netflix-making-effort-to-block-geoblock-circumvention-
74033/ [http://perma.cc/XF7U-GN78].
100 Mike Blake, Netflix upholds geoblocking rules amid reports of crackdown, CBC News (Jan. 5,
2015), http://www.cbc.ca/news/business/netflix-upholds-geoblocking-rules-amid-reports-of-
crackdown-1.2889895 [http://perma.cc/JG3V-68XU].
1ol Adam Sheperd, Netflix may start blocking VPNs - should you be worried?, PC Pro (Jan. 5, 2015),
http://www.pcpro.co.uk/computing/1 000220/nettlix-may-start-blocking-vpns-should-you-be-worried
[http://perma.cc/7FTF-5RHY].
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VII. CONCLUSION
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itself, but in the meantime, consumers can take a moment to pause and remember
the thrill of anticipation.
134