Lora Bentley spoke with Kelly D. Talcott, intellectual property attorney with K&L Gates.
Bentley: Why is the U.S. District Court for the Central District of California's recent ruling that defendants in a copyright infringement case "collect and produce" information stored in their servers' random access memory significant?
Talcott: Whether it is significant or not depends on your point of view. Those who believe it to be significant apparently do so because it is one of the first opinions, if not the first opinion, that categorizes electronic information that is present only in a computer's random access memory (RAM) as "electronically stored information" ("ESI") under Rule 34 of the recently revised Federal Rules of Civil Procedure. Generally speaking, this is the main procedural rule that governs how non-testimonial information is produced in legal disputes in the federal courts. Because the court found that the disputed information was ESI, it became subject to the discovery requirements imposed on ESI by the Federal Rules.
At first blush, it is understandable how this could cause some concern, since in many cases the information that passes through a computer's RAM is not meant to reside there for any particular period of time, and may not normally be retained in any other form. The magistrate judge simply found nothing in the text of the rule or in the related notes of the Advisory Committee on Civil Rules that would exempt even temporarily stored information from falling within the rule's definition of ESI.
The magistrate judge had to make other findings, however, before she ordered the information to be collected and produced. First, of course, she had to find the requested information to be relevant. She made this finding based on her determination that the requested information included (1) IP addresses of computers used to access the TorrentSpy service and (2) the requests made through those computers for "dot-torrent" files that could be used to download content that the plaintiffs contended included copyrighted movies and television episodes. The magistrate judge noted that the TorrentSpy Web site was, in many cases, not hosting this content, so the plaintiffs' case was predicated on the TorrentSpy defendants being contributory infringers. She found that, to make their case, the plaintiffs needed to be able to prove some direct infringement, which explained their need for the dot-torrent file request information that was stored in the TorrentSpy RAM.
In addition to relevance, the magistrate judge also had to (and did) find that the information sought was within the defendants' care, custody, and control. She then had to determine whether an order requiring the defendants to collect and produce the information was appropriate in the context of the case. This is often the essence of many discovery disputes: Does the burden imposed on the producing party if the judge orders the discovery outweigh the benefit or potential benefit that the information is likely to bring to the requesting party's case? If the producing party can show that the burden of production is substantial and the benefit slight, then the judge is likely to be less inclined to order production than if the scales are tipped in the other direction. In this case, the judge was not convinced that the burden on the TorrentSpy defendants of enabling the server log function and producing the logged information outweighed the benefit to the plaintiffs of receiving what the judge found was "essential" information for plaintiffs' case.
The point I want to make with all of this is that it is not necessarily fair to characterize this order as creating an obligation in every case for parties to preserve and disclose information stored in RAM. The situation, as in any discovery dispute, is very fact-specific, and good judges are going to treat each situation on its own particular set of facts.
Bentley: When does temporarily stored information become electronically stored information that is subject to discovery under FRCP 34?
Talcott: I will defer to the 9th Circuit Court of Appeals, which will be considering the TorrentSpy defendants' appeal of the magistrate judge's order, and other courts that are likely to be considering this issue in the very near future. That said, this is really two questions. As to the first - when does temporarily stored information become ESI? - I will note, as did the magistrate judge, that Rule 34 is very broad, and includes within its scope "any designated documents or electronically stored information - including writings, drawings, graphs, charts, photographs, sound recordings, images, and other data or data compilations stored in any medium from which information can be obtained."
That only helps us figure out when information may be categorized as ESI. The second question - when is that ESI subject to discovery? - is more complex, as the Advisory Committee notes take pains to point out: "The term 'electronically stored information' is broad, but whether material that falls within this term should be produced, and in what form, are separate questions that must be addressed under Rules 26(b) [relating to discovery scope and limits], 26(c) [relating to orders protecting a party from having to comply with a discovery request], and 34(b) [relating to discovery procedure and, in particular, specification of the form in which ESI is to be produced]." The short answer is that there is not an easy answer to that second question. It will depend very heavily on the facts of the case at hand.
Bentley: So, in light of the decision, should companies like TorrentSpy never disable the log capabilities on their servers? If not, what triggers the duty to preserve such log data?
Talcott: First, I'm not sure that TorrentSpy "disabled" the server logs, if that's what the question is suggesting. From reading the opinion, it appears that TorrentSpy chose not to enable those logs in the first place. Second, it's very dangerous to give legal advice in a factual vacuum. That said, I do not read this decision as creating a new legal requirement that companies of all stripes must now enable the log capabilities on their servers, especially where up to now there had been no business reason for them to do so.
That situation could change, however, if a company becomes aware that a potential litigant has raised issues that may invoke the information preservation obligations of Rule 34, and the only source for important information that is relevant to the impending dispute is RAM. That is probably not going to be the case in the vast majority of disputes, because the information that is relevant to the dispute is going to be available from other sources and won't have to be culled from RAM. Aside from whether or not there is a requirement to produce information stored in RAM (or in any other location), companies should generally be aware that some courts have stated that the obligation to preserve relevant information begins even before the lawsuit is filed, when it becomes apparent that a dispute is brewing and a lawsuit may follow.
Bentley: Even though it may mean good things for copyright holders, doesn't the decision also raise privacy concerns?