If you've watched a new movie online without paying for it, you likely committed a bad copyright law thingy. You probably infringed.
How exactly the Internets enable you thus to Reap where you have not Sown, film-wise, may baffle you. It did us. Thanks to the Ninth Circuit, we wonder no more. Or at least less.
The court probes the online underbelly's innards in Columbia Pictures Industries, Inc. v. Fung, No. 10-55946 (9th Cir. Mar. 21, 2013) (http://cdn.ca9.uscourts.gov/datastore/opinions/2013/03/21/10-55946.pdf). The panel explains how "peer to peer" (P2P) networks enable users to view movies (and other material) gratis. A P2P network responds to a user's request by prompting servers that contain pieces of a movie to send the pieces to the user's computer. The torrent of distinct pieces reassembles fast enough that the requesting user can watch the movie without a lot of jitters. That's the plan, at least.
The defendant in Columbia Pictures, Fung, welcomed his sites' subscribers to use his P2P programming to grab and view popular movies without paying for them. He earned money not by charging for subscriptions but from ad revenue, which accrued when subscribers clicked on ads.
The Ninth Circuit held that Fung violated the Copyright Act by inducing his subscribers to infringe the copyrights of movie owners. It also ruled that none of the "safe harbors" in the Digital Millennium Copyright Act saved him. The court thus affirmed entry of a permanent injunction against Fung but sent the case back to the district court with instructions to make the injunction clearer.