The Net Gets Real on Copyrights

The Harry Potter ending is the latest example of how Web sites are more willing to take down copyrighted material and identify infringers

by Catherine Holahan

Everyone knows it's hard to keep a secret when it comes to Harry Potter plotlines. So it's no wonder that copies of the highly anticipated last installment of the book series could be found floating around the Web before its July 21 release date. As is well known by most Potter fans, pictures of the ending were posted on sites such as News Corp.'s (NWS) photo-sharing site Photobucket and Gaia Online, an Internet community site for teens, robbing incautious Web surfers of the surprise ending (see BusinessWeek.com, 7/18/07, "So, Does Harry Potter Live?").

What was a surprise, however, is how quickly many Web sites appeared to respond to requests to take down copyrighted material and hand over information regarding alleged copyright infringers. On July 16, Scholastic (SCHL), which publishes the Harry Potter books in the U.S., filed a subpoena for information about the identity of a user who posted copies of the book on Gaiaonline.com. The company immediately supplied the information, took down the infringing material, and banned the user from the site for two weeks. "Gaia Online's terms of service prohibit the use of Gaia Online for any illegal purpose and requires all users to comply with its terms of service," the company said in a statement, explaining its swift compliance.

Court documents filed by Scholastic also say that copies of the book appeared to be on Photobucket. News Corp.'s Fox Interactive Media, which operates MySpace.com and Photobucket, declined comment, but the material is no longer on the site.

Changing IP Attitudes

Not long ago, such thorough compliance from sites that thrive on user-generated content might have been unthinkable. While many sites did immediately remove material in response to takedown notices, as is required by law, they did little to keep the same material from being uploaded moments later. Many sites have typically been adamant about ratting out users.

But attitudes toward copyright and intellectual property have changed. One reason is that the industry has matured. Sites that depend on users for content are no longer simply trying to prove their value by grabbing tons of Web traffic in any way possible. They are now trying to prove their mettle as legitimate businesses that can make money by working in concert with content providers and playing ball with marketers that are understandably wary of paying for ad space on sites they fear might get sued or, worse, shut down. "There are a lot of U.S.-based venture-backed businesses that are trying to be compliant," says Eric Garland, chief executive officer of BigChampagne, a technology and market research company that tracks illegal downloading of copyrighted material.

In some cases, the new emphasis on intellectual property has come as the sites have been purchased, or evaluated for acquisition, by large public companies such as News Corp. and Google (GOOG), which respectively acquired social networking site MySpace and video-sharing site YouTube. Large companies, in general, have more to lose from a lawsuit and more respect to squander should the public perceive them as disrespectful of intellectual property (see BusinessWeek.com, 10/10/06, "YouTube's New Deep Pockets,"). "Sites that spring to mind like MySpace and YouTube are doing what they can to quickly remove infringing content from their sites," says Garland.