On December 16, 1997, President Clinton signed HR 2265, a bill that creates stiff criminal penalties for willful copyright infringement by electronic or other means.
The N.E.T. act addresses electronic copyright piracy committed without a profit motive and is intended to reverse the result in such case as United States v. La Macchia, 871 F. Supp. 535, 33 U.S.P.Q. 2d 1978 (DC Mass. 1994). In La Macchia, a computer bulletin board operator who provided users with free unauthorized copies of copyrighted software escaped prosecution under the federal wire fraud statute because his activities lacked the necessary element of commercial gain.
Under the N.E.T. Act, criminal copyright infringement may be found where products with a value of over $1000 are copied, regardless of whether they are sold or given away. The penalty for making 1 or more copies is fine and up to one year in jail; the penalty for making 10 or more copies of works which have a value of over $2500 is a fine or up to three years in jail; repeat offenses increase the jail time to six years. Victims of criminal copyright offenses may submit "impact statements" during the sentencing phase of the infringer's trial.
The N.E.T. Act also adds a definition of "financial gain" to Section 101 of the Copyright Act. The term would mean "receipt, or the expectation of receipt, of anything of value, including the receipt of other copyrighted works." The phrase "expectation of receipt" was added in response to concerns that it might be difficult in some instances of infringement to prove that money had changed hands.
On October 28, 1998, President Clinton signed the Digital Millennium Act, H.R.2281. The Act was designed to increase the protection given to copyrighted works on the Internet. The new law makes it illegal to circumvent technological measures that block access to copyrighted works and to distribute false information about a work such as the identity of its author and conditions for use. These provisions are known as the "black box" and "copy management information" provisions. The Act implements as a matter of Untied States law the provisions of two World Intellectual Property Organization treaties which were signed by the U.S. in 1996.
Provisions. The legislation makes it illegal to knowingly and with the intent to induce or enable infringement:
- provide false copyright management information;
- distribute or import for distribution false copyright management information;
- remove or alter copyright management informational or
- distribute or import for distribution works containing known alterations of copyright management information.
Penalties. Violators may be subject to civil and criminal penalties. Nonprofit libraries, archives, and educational institutions are exempt from criminal penalties.
Exemptions. The new provisions raised the concerns of academics and free speech advocates who feared that copyright owners would use the Act to prevent access by researchers and library patrons which had traditionally been considered "fair use." To ameliorate these concerns, the Act provides for limited exceptions for:
- nonprofit libraries, archives, and educational institutions making a determination of whether to acquire the work;
- law enforcement activities;
- reverse engineering for interoperability of computer programs;
- encryption research;
- circumvention to prevent access by minors; and
- security testing.
The Librarian of Congress, upon the recommendation of the Register of Copyrights, is required to make a determination whether the anti-circumvention provisions of the Act are interfering with other types of legitimate, non infringing uses, and if necessary exempt certain categories of uses from the Act's "black box" provisions. The Act also specifically allows the circumvention of security devices if necessary to prevent the devise or copyrighted work protected by it from being used to collect and disseminate personal identifying information about the user.
Limited ISP liability. As part of the Digital Millennium Copyright Act, Congress also passed the On-Line Copyright Infringement Liability Limitation Act, which clarifies the legal liability of Internet Service Providers ("ISPs") for copyright infringement, and provides certain incentives for ISPs to address infringing conduct on their systems once they are given notice of the conduct.
The On-Line Copyright Infringement Liability Limitation Act creates various "safe harbors" that immunize ISPs from monetary, injunctive, and other equitable relief, when (a) transmission and routing is initiated by a third party; (b) system caching of material is made available to a third party; (c) system storage of information occurs but the ISP does not have actual knowledge of infringement and acts expeditiously to remove the information upon actual knowledge; (d) users are linked to sites containing infringing information if the ISP has no actual knowledge and acts expeditiously to remove the link upon actual knowledge; (e) public or nonprofit educational institutions act as service providers, in which case knowledge of graduate students or faculty will not be impute to the institution. Finally, ISPs will not be liable if they act in good faith in disabling a subscriber's Internet access, or removing content posted on the system, as long as they are acting in response to a claim that such material is infringing or where the infringement is apparent. The subscriber, however, must be promptly notified and given the opportunity to rebut the claim of infringement.
Interim rule for designation of agent. On November 3, 1998, the Copyright Office published an interim regulation that implements a system of designating an agent to receive notices of infringement claims from copyright owners to help ISPs limit their infringement liability on the Internet. Under the interim rule, related companies such as parents and subsidiaries are considered separate service providers that must file separate interim designations. Interim designations must be prominently identified "Interim Designation of Agent to Receive Notification of Claimed Infringement," must be accompanied by a $20 filing fee and must include the following information:
- the full legal name and address of the service provider;
- all names under which the service provider is doing business;
- the designated agent's full mailing address; and
- the designated agent's telephone number, fax number, and e-mail address.
MAI Systems Effectively Overruled. The Act severely limits MAI Systems Corp. v. Peak Computer Inc., 991 F. 2d 511 (9th Cir. 1993), which held that the loading of an operating system into a computer's RAM for the purpose of servicing the system hardware amounts to copyright infringement. The Act amends Section 117 of the Copyright Act to clarify that the making of a copy of a software program by virtue of turning on the computer is not a violation of the reproduction right where the act is undertaken solely for the purpose of maintenance or repair of the machine on which the program resides.
Sound recordings and the Internet. The Act amends Section 114 of the Copyright Act to allow Webcasters to broadcast sound recordings over the Internet without fear of infringing a copyright owner's reporduction right. In return, Webcasters would pay a statutory license fee and agree to abide by a list of restrictions on how, when and what they broadcast.
No new protection for databases. The Digital Millennium Copyright Act does not provide additional protection for information in databases or compilations which fall outside the protection of current copyright law. Legislation had been proposed to close the gap in protection for databases created by Feist v. Rural Teephone. Service. Co. Inc.,499 U.S. 340 (1991), but was not adopted in the final version of the act. Such legislation is expected to be reintroduced this year.
The Collections of Information Antipiracy Act seeks to prevent to misappropriation of collections of information. The Act was passed by the House of Representatives on May 19, 1998 and is presently being considered by the Senate Judiciary Committee.
Provisions. The Act prohibits the extraction or use in commerce of all or a substantial part or a collection of information gathered, organized or maintained by another person through the investment of substantial monetary or other resources, so as to cause harm to the actual or potential market of that other person.
Exemptions. The Act exempts the extraction or use of an individual item of information or other insubstantial part of a collection of information and the independent gathering of information contained in a collection of information. Also exempted is the extraction of information for the sole purpose of verifying the accuracy of information independently gathered, organized or maintained, the extraction or use of information for nonprofit educational, scientific or research purposes, or the extraction of information for the sole purpose of news reporting.
Exclusions. The Act does not protect collections of information gathered, organized or maintained by or for a governmental entity.
Relationship to other laws. The Act preempts state laws with respect to trademark, design rights, antitrust, trade secrets, access to public documents and contracts. The protection under the Act is "independent of and does not affect or enlarge the scope, duration, ownership or subsistence of, any copyright protection or limitation, including, but not limited to fair use in any work of authorship that is contained in or consists in whole or in part of a collection of information.
The Act provides for injunctions and criminal penalties for willful violations motivated by commercial advantage or financial gain or causing loss aggregating $10,000 or more in any 1 year period to the person who compiled the collection of information. A criminal offense under the act is punishable by fines up to $250,000 or imprisonment up to 5 years or both.
Feist Publications, Inc. v. Rural Telephone Service Co., 499 U.S. 340 (1992)
A telephone utility brought copyright infringement action against a publisher of an area-wide telephone directory for publisher's use of listings in utility's white pages. The court held that telephone listings were not sufficiently original to qualify for copyright protection. This case suggests that database compilations will not be protected by copyright law. But see proposed Collections of Information Antipiracy Act, HR 2652, discussed above.
ProCD, Inc. v. Zeidenberg and Silken Mountain Web Services, 908 F. Supp. 640 (W.D. Wisc 1996)
Summary judgment granted in favor of defendants in case alleging copyright infringement by downloading of telephone listings contained on plaintiff's CD-ROM. The court held that copyright protection extended to plaintiff's software, but did not extend to telephone listings included in plaintiff's Select Phone TM CD-ROM. Defendants purchased copies of plaintiff's Select Phone TM CD-ROM software program, downloaded telephone lsitings stored on the CD-ROM discs and made the listings available to Internet users by placing the data onto an Internet host computer. The court found that defendants used the protected software for their own individual purposes, consistent with plaintiff's copyright and distributed only unprotected data.
Religious Technology Center v. Netcom On-Line Communication Services, Inc. 907 F. Supp. 1361 (N.D. Cal. 1995)
A number of cases have been brought by the Church of Scientology against persons who have posted portions of the religious teachings of L. Ron Hubbard on web pages. In Netcom, the Church of Scientology brought an infringement action against an operator of a computer bulletin board service ("BBS") and Internet service provider ("ISP"), seeking to hold defendants liable for copyright infringement committed by a BBS subscriber. Defendant Netcom, the ISP, asserted the fair use defense. The court held that fact issues precluded summary judgment on the access provider's fair use defense. The court's holding with respect to the fair use factors is analyzed below.
Purpose and character of the use. This first factor looks to whether the use is of a commercial or nonprofit purpose. The Netcom court noted that Netcom's use of copyrighted material as part of its Usenet services, "though commercial, also benefits the public in allowing for the functioning of the Internet and the dissemination of other creative works,." The court noted that the commercial nature of Netcom's activity should therefore not be dispositive, concluding that "[b]ecause Netcom's use of copyrighted materials served a completely different function that that of the plaintiffs this factor weighs in Netcom's favor."
Nature of the copyrighted work. Fair use rights are generally construed more broadly with respect to factual or published works than with respect to fictional or unpublished works. The Netcom court held that the precise nature of the work at issue was not important to the fair use determination "because Netcom's use of the works was merely to facilitate their posting to the Usenet, which is an entirely different purpose that plaintiff's use."
Amount and substantiality of portion used. This factor looks to the amount and substantiality of the portion used in relation to the copyrighted work as a whole. The Netcom court noted that "the mere fact that all of a work is copied is not determinative of the fair use question, where such total copying is essential given the purpose of the copying." Because Netcom had copied no more of the plaintiff's works than necessary to function as a Usenet server, the court concluded that this factor should not defeat an otherwise valid fair use defense.
Effect of use on the potential market. This factor looks to the effect of the use upon the potential market or value of the copyrighted work and is generally considered the most important of the four factors. In Netcom, the court held that the potential harm under this factor precluded a ruling that the ISP's posting of plaintiff's copyrighted material in its Usenet service was a fair use. Plaintiffs had argued that the Internet's extremely widespread distribution of its copyrighted materials multiplied the potential effects for market substitution for its materials by competing religious-training groups.
Other Scientology cases:
Religious Technology Center v. Netcom, 923 F. Supp. 1231 (N.D. Cal. 1995).
The Church of Scientology brought an action against an individual who posted copyrighted works on the Internet, alleging copyright infringement and trade secret misappropriation. The court held that the Church's copyrights were likely to be valid, rejected defendant's fair use defense, and held that the works were not likely to be trade secrets.
Religious Technology Center v. F.A.C.T. NET, Inc., 901 F. Supp. 1519 (D. Col. 1995)
The Court denied plaintiff's motion for preliminary injunction against a BBS that published the Church's religious works on the Internet. The court found that the Internet postings could be considered as having been made for the purpose of criticism, comment or research falling within the fair use doctrine. The court ordered that defendants maintain the status quo as to their possession of copyrighted materials and are restricted to making only fair use thereof.
Religious Technology Center v. Lerma, 897 F. Supp. 260 (E.D.Va., 1995)
Plaintiff's motion for preliminary injunction against defendant who posted Church teaching on the Internet denied. The court accepted defendant's fair use defense.
Religious Technology Center v. Lerma, 1996 U.S. Dist. LEXIS 15454; 40 U.S.P.Q. 2d (BNA) 1569, (E.D. Va, 1996)
Same case as above. Summary judgment granted in favor of plaintiff against former Church member who posted portions of Scientology teachings on the Internet. The court rejected defendant's fair use defense.
Religious Technology Center v. Ward, No. 96-20207 (N.D. Cal. March 21, 1996)
The Church obtained a TRO against an individual who solicited copies of church teaching on the Internet and published them on-line.
Storm Impact, Inc. v. Software of the Month Club, 13 F. Supp. 2d 782, (N.D. Ill. 1998)
Software of the Month Club's ("SOMC") copying and distribution of Storm's products held not to constitute fair use . Storm Impact distributes its software as "shareware," which gives the user the opportunity to use the product and try it out before buying it. Storm Impact's shareware programs contain an express restriction that one cannot charge for copies or try to make a profit from the software or its distribution. SOMC provides collections on newly introduced shareware to its customers on a monthly basis and charges a monthly fee to its members. SOMC did not contest that its use of plaintiff's shareware constituted copyright infringement, but alleged a fair use defense. The court analyzed the four fair use factors as follows.
Purpose and character of the use. The court found that a shareware version of a copyrighted computer program was not transformative within the meaning of fair use because Storm, not SOMC affected the changes that existed between the original and shareware versions. The court further found that SOMC's use of the shareware was commercial in nature. SOMC had argued that its use of the shareware programs was not commercial because it provided a service to the customer and the author by providing a larger market for the ultimate sale of the software.
Nature of the copyrighted work. The court found that since the computer programs were original and creative works rather than facts or news, this factor weighed in favor of plaintiffs.
Amount and substantiality of portion used. Here, this factor weighed against defendant because the infringing use copied verbatim from the copyrighted work.
Effect of use on the potential market. The court found that SOMC's use of Storm's product adversely affected the market for Storm's product because SOMC's use of the software angered some consumers, SOMC provided improper technical support, and SOMC's fee reduced the chance that customers would register with Storm.
Bret Michaels and Pamela Lee v. Internet Entertainment Group, Inc., 5 F. Supp. 2d 823 (C.D. Cal. 1998)
The court granted plaintiff's motion for preliminary injunction to prevent dissemination on the Internet of a videotape of Michaels and Lee having sex, in which they claimed a copyright. The court rejected defendant's fair use defense, concluding that the display or distribution of the tape would destroy the value of plaintiff's exclusive rights in the work. The court found that defendant's proposed use was commercial; the tape was unpublished (plaintiffs claimed they made the tape for the personal use only with no intent of publishing it); the relative importance of the segments of the tape defendants intended to disseminated weighed against a fair use defense; and in light of the extensive interest among Internet users in text and images regarding Lee, defendant's use would saturate the potential market for plaintiff's copyrighted work.
The granting of the injunction was also premised on that fact that the court rejected defendant's affirmative defense that it had received a license to distribute the tape, and the court found that plaintiff's were entitled to an injunction to prevent a violation of their right of publicity.
Religious Technology Center v. Netcom On-Line Communication Services, Inc. 907 F. Supp. 1361 (N.D. Cal. 1995)
Web browsing held not to constitute infringement, even though a copy is made of the web page on RAM or screen memory. The Netcom court noted in dicta that much of digital browsing is probably a fair use or an innocent infringement:
Absent a commercial or profit-depriving use, digital browsing is probably a fair use; there could hardly be a market for licensing the temporary copying of digital works onto computer screens to allow browsing. Unless such a use is commercial, such as where someone reads a copyrighted work online and therefore decides not to purchase a copy from the copyright owner, fair use is likely. Until reading a work online becomes as easy and convenient as reading a paperback, copyright owners do not have much to fear from digital browsing and there will not likely be much market effect.
Hogan Systems, Inc. v. Cybresource Interna'l Inc., 158 F. 3d 319 (5th Cir. 1998)
Reviewing copyrighted software from a remote location does not constitute copying under federal copyright law. A dispute arose between a software owner and a company that licensed the software over a third party's access to the software. The court dismissed the software owner's claim that the third-party contractor's off-site access to the software required copying and removing the software from the licensee's server, and was an act of copyright infringement. Instead, the court accepted the third party contractor's argument that all it did was remotely view materials displayed from the licensee's mainframe. The court found that the conduct did not substantially differ from routine access to a computer program and found that that the use did not constitute copying under the Copyright Act. Defendant's motion for summary judgment affirmed.
Much of the Internet copyright debate has centered around the issue of copyright liability of Internet Service Providers ("ISP"s), Bulletin Board Service operators ("BBS"s), system operators and other service providers for infringing activities that take place through their facilities. According to the cases, service providers may be held liable under theories of direct infringement, contributory infringement, or vicarious infringement.
Direct liability. According to a majority of the cases, to establish direct infringement liability by an ISP or BBS for infringing postings and unauthorized uses by users, there must be some kind of a direct volitional act.
Contributory liability. A party may be liable for contributory infringement where "with knowledge of the infringing activity, [it] induces, causes or materially contributes to the infringing activity of another." The standard of knowledge is objective: a person must know or have reason to know that the subject matter is copyrighted and that the particular uses violated copyright law. There must be a direct infringement of which the contributory infringer has knowledge, and encourages or facilitates for contributory infringement to attach. In many instances, an ISP or BBS is merely a passive information conduit and has no knowledge of the infringement. However, once an ISP or BBS has knowledge, or reason to know, the system provider cannot simply continue to provide the facility that enables infringement.
Vicarious liability. A party may be vicariously liable for the infringing acts of another if it (1) has the right and ability to control the infringer's acts and (2) receives a direct financial benefit from the infringement. Unlike contributory infringement, knowledge is not an element of vicarious liability.
Subafilms, Ltd. v. MGM-Pathe Communications Co., 24 F. 3d 1088 (9th Cir. 1994)
The court held that no independent right of authorization was created by the Copyright Act's reference in section 106 to the exclusive right "to do or to authrorize" the acts enumerated therein. The court stated that liability under the Copyright Act for violation of a copyright owner's exclusive right "to authorize" specific activities merely clarifies that the bare act of authorization can result in liability for contributory infringement. The reasoning behind this decision suggests that there should not be direct liability for persons who merely place material on a network for subsequent unauthorized copying, display, or performance. It appears that even if loading material onto a server encourages (or authorizes) copyrighting through downloading, that authorization does not suffice for direct liability.
Religious Technology Center v. Netcom On-Line Communication Services, Inc. 907 F. Supp. 1361 (N.D. Cal. 1995)
The court refused to hold an ISP directly liable for an automatic pass through of allegedly infringing messages posted to Usenet by a subscriber. The court held that the ISP was not liable because it performed no volitional act to facilitate the infringement but simply allowed its system to be used for the posting.
The Netcom court denied Netcom's motion for summary judgment on the issue of contributory infringement. The court held that the ISP Netcom could be contributorily liable for infringing postings by an individual of copyrighted religious materials to the Usenet through the provider after their service was given notice of the infringing material. The court stated that if plaintiffs could prove the knowledge element, Netcom would be liable for contributory infringement since its failure to cancel the infringing message and thereby stop an infringing copy from being distributed worldwide constituted substantial participation in the public distribution of the message. The court held that the copyright notices in the posted works were sufficient to give Netcom notice that the works were copyrighted. The court noted that where an operator is unable to verify a claim of infringement, there may be no contributory infringement because under those circumstances, the operator's lack of knowledge would be found reasonable. However, the court clearly imposed a duty on the operator to actively attempt to verify a claim of infringement and take appropriate responsive action.
The court refused to impose hold Netcom vicariously liable because although Netcom may have had to right and ability to control the activities of its subscribers, there was no evidence that Netcom received a direct financial benefit from the infringing postings or that such postings enhanced the value of Netcom's services to subscribers or attracted new subscribers.
This case was settled in 1996. As part of the settlement, Netcom announced new guidelines titled "Intellectual Property Rights on the Internet," which Netcom now distributes to all its subscribers and set forth terms and conditions binding on all computers whose host name or address includes "netcom.com." Under the guidelines, Netcom assumes the role of arbiter of allegations or copyright infringement based on materials posted through its service.
Fonovisa, Inc. v. Cherry Auction, Inc. 76 F. 3d 259 (9th Cir. 1996)
The owner of copyrights and trademarks for musical recordings sued the operators of a swap meet for infringement based on sales of counterfeit recordings by independent vendors at the meets. The court reversed the dismissal of the suit on the pleadings, finding that the complaint stated a cause of action for vicarious infringement because defendants were in a position to control the infringement by the vendors at the swap meet and gained a financial benefit from the vendor's actions. The court also found that the complaint stated a cause of action for contributory infringement because "providing the site and facilities for known infringing activity is sufficient to establish contributory liability."
Sega Enterprises Ltd. v. MAPHIA, 948 F. Supp. 923 (N.D. Cal. 1996)
A video game manufacturer brought an action against a BBS operator for copyright infringement. The court refused to hold the BBS operator directly liable for the uploading and downloading by subscribers of unauthorized copies of Sega's video games through the BBS. Even though the operator had encouraged the initial uploading, he was not liable because he had not actually participated in the acts of uploading or downloading themselves.
However, the court held the BBS and its system operator liable for contributory infringement for the uploading and downloading of copies of Sega video games by users because the system operator had knowledge of the infringing activity and had specifically solicited the uploading of games for downloading by users of the bulletin board. The court found that providing the site and facilities for known infringing activity was sufficient to establish contributory liability, citing Fonovisa, Inc. v. Cherry Auction, Inc. 76 F. 3d 259 (9th Cir. 1996). The court further found that liability would attach even under the higher standard requiring direct participation as established by Netcom because the service operator actively solicited users to upload unauthorized games and offered copiers for sale to facilitate playing the downloaded games. The court granted injunctive relief for contributory infringement based on a showing that the BBS operator provided the facilities, direction and encouragement to the infringers.
Sega Enterprises Ltd. v. Sabella, 1997 Copyr. Law. Dec. 27, 648 (N.D. Cal. Dec. 18, 1996)
Plaintiff's motion for summary judgment and permanent injunction against BBS and its system operator for uploading and downloading of copies of Sega video games granted. The court held that the BBS operator was not directly liable because she did not directly cause the copying of the video games.
However, as in MAPHIA, the court found the BBS operator contributory liable because the operator knew that her BBS users were making copies of Sega games and she directly participated in their copying. Sabella's BBS users directly infringed because copies were made when unauthorized copeies of Sega games were downloaded from or uplaoded to the BBS from the BBS users. Further, Sabella had reason to know of her user's infringing activity because Sabella advertised the copies which played unauthorized copies of Sega games, Sabella gave downloading privileges to customers that bought copiers. The court found that the BBS opertor not only provided the site and facilities for the infringing activity, but substantially participated in the infringing activity.
The court did not address whether the BBS operator was also vicariously liable.
Outside California, the stardard for direct copyright infringement appears to be less stringent. The courts in these cases seem more willing to impose direct liability on a BBS operator, at least where the operator has some form of direct involvement in the anticipated acts that lead to infringement.
Playboy Enterpises, Inc. v. Frena, 839 F. Supp. 1552 (M.D. Fla. 1993)
Magazine brought suit against an operator of a BBS alleging that the use of copyrighted photographs was copyright infringement. The court granted plaintiff's motion for summary judgment, finding that defendant BBS operator was directly liable for copyright infirngement because he operated the BBS that distributed unauthorized copies of a copyrighted work.
Playboy Enterpises, Inc. v. Webbworld, Inc., 968 F. Supp. 1171 (N.D. Fla. 1993)
The court held that defendants who owned and operated an Internet website that offered sexually-oriented photographs to subscribers directly and contributorily infringed plaintiff's copyright. The court permanentently enjoined defendant, prohibiting future copyright infringement by the BBS operator. Rejecting defendant's argument that they only functioned as a passive conduit of information, the court held that defendants directly infringed plaintiff's copyrights because they took affirmative steps to cause the copies of the copyrighted photographs to be made. The court further held the defendants vicariously liable because they had a direct financial interest in the publishing of the photographs, and they had the right and ability to supervise the web page on which the infringement occurred.
Playboy Enterprises, Inc. v. Russ Hardenburgh Inc., (DC N. Ohio, No. 1:93 CV 0546, Nov. 25, 1997)
Summary judgment granted in favor of Playboy for direct and contributory infringement claims against a BBS operator. The court found a BBS operator liable for direct copyright infringement of copyrighted photographs by participating in "volitional acts" such as encouraging subscribers to upload files onto the service and adopting a screening procedure for those files The court cited with approval the Netcom case, which held that some volitional or causal element must exist, in addition to the provision of space where information is exchanged, for a BBS to be liable for direct copyright infringement. The court also found defendants liable for contributory infringement based on their actions encouraging subscribers to upload infringing material onto the BBS system and their constructive knowledge that infringing activity might occur on the BBS.
Marobie-Fl, Inc. v. National Association of Fire Equipment Distributors, 45 U.S.P.Q. 2d 1236 (N.D. Ill. 1997)
An Internet provider that hosts a third party's web site containing infringing material is not liable for direct or vicarious copyright infringement. Plaintiff owned the copyright for three volumes of clip art. The National Association of Fire Equipment Distributors, ("NAFED") copied some of the clip art into files on its web page, which were made available for Internet users to download on their own computers. NAFED's ISP, Northwest Nexus, Inc., provided the host computer for the web site. The court ruled that NAFED directly infringed plaintiff's copyrights by copying the clip art onto the hard drive of Northwest's computer, rejecting their innocent infringer and fair use defenses. However, the court held that the ISP was not liable for direct copyright infringement because it only provided a means for NAFED to copy or distribute the clip art. The court reasoned that the ISP only provided the facilities for the infringement, and did not itself infringe the plaintiff's copyrights.
The court also ruled that the ISP could not be held vicariously liable because it did not financially benefit from NAFED's infringement. The court indicated that the ISP could be found liable for contributory infringement depending on the extent to which it knew of NAFED's infringement or could control the web site's content.
Shetland Times Co., Ltd. v. Wills, Scotland Court of Session, Oct. 24 , 1996
Plaintiff newspaper sued defendant alleging that the copying of headlines from plaintiff's web page constituted copyright infringement. The headlines on the front page of the Shetland Times' web site were linked to subsidiary pages containing the corresponding articles. Defendant news reporting service, The Shetland News, also maintained a web site. The front page of the News' web site took verbatim the headlines from the Times' site and placed them on the News' web site to allow users to link directly to the full text of the Times' articles, without having to first view the front page of the Times' web page. Plaintiff alleged that this bypassing of the Times' front page caused harm to Times' ability to sell advertising on the front page of the web site, because linked users would never see the ads on the Times' front page.
The court issued an "interim edict" (a temporary order) pending a full hearing ruling that the headlines could be considered copyrightable literary works. The cases was subsequently settled and the parties agreed among other things that Defendant would be permitted to link to stories on Times' web site by means of headlines only if each link acknowledged that it was a Times' story.
Washington Post et al. v. TotalNews, Inc., Case No. 97 Civ. 1190 (PKL) (S.D.N.Y., complaint filed 2/20/97)
News service providers such as the Washington Post, CNN and Reuters, whose web pages were presented on TotalNews' frames sued, contending that such framing of their content constituted copyright infringement. This case was the first U.S. case to challenge framing as copyright infringement. The TotalNews web site was a "para-site," designed to make over 1200 news sources from all over the world available at a single site. TotalNews presented content from plaintiffs' sites in a frame on its site, with defendant's advertisements (rather than plaintiffs') in the margins.
In June of 1997, the parties settled the case. According to the terms of the settlement, TotalNews agreed to stop framing plaintiffs' web site but was permitted to maintain out links from the TotalNews web site to any of the plaintiff's web sites, provided the links were only via hyperlinks consisting of the names of the linked sites in plain test; TotalNews made no use of plaintiff's proprietary logos or other distinctive material; and the links were not likely to imply affiliation, endorsement or sponsorship by any plaintiff or otherwise cause confusion or dilution of plaintiffs' marks.
Ticketmaster Corp. v. Microsoft, Case No. 97-3055 DDP (C.D. Cal., complaint filed 4/28/97; amended complaint filed 2/98)
Ticketmaster sued Microsoft for copyright infringement based on links from Microsoft's "Seattle Sidewalk" web site to Ticketmaster's web site. When negotiations between the companies regarding the linked web sites failed, Microsoft nonetheless included the link in its site. Ticketmaster alleged that (1) in creating links to the Ticketmaster site, Microsoft repeatedly viewed and thus copied onto its own computers the copyrighted contents of Ticketmaster's web site; and (2) in the operation of the links, Microsoft was reproducing, publicly distributing and displaying without permission Ticketmaster's copyrighted web site material. Microsoft alleged in its answer to the complaint that Ticketmaster could not complain about the link because Ticketmaster knew when it set up its web page that owners of other web pages would create such links. Although Microsoft removed some or all of its links to the Ticketmaster site after the complaint was filed, the lawsuit remains unresolved.
Futuredontics, Inc. v. Applied Anagramatics, Inc. 45 U.S.P.Q. 2d 2005 (C.D. Cal. 1998)
In September of 1997, Futuredontics, the owner of a web site relating to its dental referral service, filed a complaint against a defendant that was framing material from Futuredontics web site in the defendant's web site. Defendant moved to dismiss the complaint for failure to state a claim, arguing that its frame should be viewed merely as a "lens" which enabled Internet users to view the information that Futuredontics had placed on the Internet. The court denied defendant's motion, ruling that existing authority did not resolve the legal issue and that the complaint sufficiently alleged a copyright infringement claim. Interestingly, the court had earlier denied plaintiff's motion for a preliminary injunction, concluding that plaintiff had not offered sufficient evidence that defendant's framed link constituted copyright infringement.
Bernstein v. JC Penney, Inc., Elizabeth Arden, Inc. et. al., (C.D. Cal.) 1998 U.S. Dist. LEXIS 19048; Media L. Rep. 2471
Defendant's motion to dismiss complaint for copyright infringement based on linking on the Internet dismissed with prejudice. Plaintiff sued Elizabeth Arden Co. and Parfums International Ltd. for copyright infringement based on multiple linkings on the Internet. Plaintiff alleged that Arden and JC Penney were liable because Arden's Passion perfume was promoted on a JC Penney website that was "hyperlinked" to a website operated by the Internet Movie Database "IMDB"). The IMDB in turn linked to other websites, one of which, the Swedish University Network, contained infringing copies of two of plaintiff's photograph's of Elizabeth Taylor, the spokesperson for Arden's perfume. Defendant Arden moved to dismiss the complaint on the ground that it failed to state a claim.
Arden argued that the complaint should be dismissed for three reasons: (1) a company whose product is merely displayed on another entity's website cannot be held liable for any infringement by the author of the website; (2) linking cannot constitute direct infringement because the computer server of the linking website does not copy or otherwise process the content of the linked-to site; and (3) multiple linking cannot constitute contributory infringement because (a) Internet users viewing of the material was not infringing and thus there was no direct infringement in the U.S. to which Arden would contribute; (b) linking "is capable of substantial noninfringing uses" and thus cannot support a claim for contributory infringement, Sony Corp. v. universal City Studios, 464 U.S. 417, 442 (1984); and (3) there was no evidence that Arden knew the photos had been posted to The Swedish University Network and the linking website did not mention that Internet users, by following the links, could find infringing material on another website - thus the multiple linking did not constitute substantial participation in any infringement.
United States v. LaMacchia, 871 F. Supp. 535 (D. Mass. 1994)
Defendant was charged with conspiring to violate the wire fraud statute by using a computer bulletin board service to facilitate copying of copyrighted computer software. The court held that defendant's advertising of access to computer software which infringed copyrights via computer transmission did not violate the wire fraud statute on the grounds that defendant's nondisclosure to copyright holders did not constitute a fraudulent scheme, no fiduciary duty existed between defendant and the copyright holders, no independent statutory duty of disclosure existed, and defendant's conduct was not criminal conduct under the Copyright Act.
The court noted in dicta that criminal as well as civil penalties should probably attach to willful, multiple infringements of copyrighted software, even absent a commercial motive on the part of the infringer. This case led to the No Electronic Theft Act of 1997 which imposes penalties for copyright infringement even in the absence of financial gain by the infringer.
Playboy Enterprises, Inc. v. Chuckleberry Publishing, Inc., 939 F. Supp. 1032 (S.D.N.Y. 1996)
Motion for contempt of injunction preventing defendant from publishing, printing, distributing, or selling in the U.S. a magazine under the name "PLAYMEN" granted. The court found defendant in contempt of the injunction because he operating an Internet site from Italy under the PLAYMEN label. Defendant argued that because the Internet could not have been contemplated by the parties when the injunction was granted, the distribution of pictorial images over that medium cannot be barred. The court disagreed, finding that the purpose of the earlier injunction was to restrict defendant's ability to distribute in product in the U.S. where it had been found to infringe upon Playboy's copyright.
Ohio v. Perry, 83 Ohio St. 3d 41; 697 N.E. 624 (1998)
Prosecution of state charges of unauthorized uploading, downloading and posting of computer software on a computer bulletin board in preempted by the federal copyright laws. Section 301 of the Copyright Act preempts state law actions which govern rights equivalent to those granted under the federal copyright Act. Defendants motion to dismiss granted. Note that defendant's conduct may constitute a violation of the No Electronic Theft Act.
In its first significant decision involving protected works on the Internet, a French court has come down strongly in favor of copyright protection. The decision renede in August of 1996 by the Ocurt of First Instance in Paris states that "all digital reproduction of musical works protected by copyright capable of being accessed by persons connected to the Internt must be expressly authorized by copyright owners." In the case, works composed by the well-known French singer Michel Sardou were digitized and placed on the web by a univeristy student without authorization. The court ruled that acts constituted copyright infringement as an illegal reproduction and public performance as well as a violation of French telecom law. The student's action were discoveed by an agent of a nonprofit French organization dedicated the the legal defense of computer software.
This ruling seems to conflict with actions taken by the French Consitutional Council earlier in 1996. The Council overturned an amendment to the Telecommunications Act that would have created a regulaory agency and forced service providers to monitor and censor content on the Internet. As a result of that ruling, the French government backed away from plans to regulate content on the Internet.
In April of 1998, the French National Union of Journalists (SNJ) filed a complaint against Paris' top-selling newspaper, Le Figaro, claiming that journalists, and not their newspaper employers retain copyright control over articles re-published on the Internet. The complaint demands that the newspaper cease publication of the Internet ediciton until these claims are resolved. The newspaper argued that the electronic ediciton was a simultaneouss, and not additional use of the journalist' work.
French journalists won a victory earlier in the year when a court ruled that Les Dernieres Nouvelles D'Alsace, (DNA) a regional newspaper based in the eastern French city of Strasbourg, must grant journalists additional remuneration for simultaneious use of articles in print and electronic editions. DNA officials reached an agreement with journalists on payment for electronic publication. In response to these two cases, the court ordered representatives of the country's national dalily nespapers to negotiate a new copyright agreement for online publication rights with the natioanl journalists union.
These two cases mark the difference between copyright law in the U.S. and France. U.S. courts have consistently ruled that media companies have te right to simultaneous publication in print and online medium, while French courts are holding the opposite.
The European Commission proposed controversial new legislation in December of 1997, designed to give member states updated, harmonized tools to counter copyright violations, especially those that occur on the Internet. Titled The Directive on Copyright and Related Rights in the Information Society, the legislation, if approved by the council of Ministers and the European Parliament, would also implement EU member countries' obligations as signitories to the WIPO treaties agreed to in 1996. The new legislation contains provisions on the right of reproduction, the right to make protected material avaliable on-demand over the Internet, and distribution rights that would protect material from piracy.
The legislation does not cover online service provider liability or private copying.
However, the provisions of the current proposal make clear hat access and service providers would be exempted from reproduction rights for certain incidental temporary "cache" copies arising during transmission over the Internet. Liability of on-line service providers is due to be the subject of a specific proposal for legislation due to be presented by the Commission during 1999.
A final decision on whether the directive will become law is unlikely before the year 2000. The European Parliament's legal committee is currently considering the proposal. The proposal will then be returned to the EU Minsters for approval.
A. Symposium: Copyright Owners' Rights and Users' Privileges on the Internet: Nine Guidelines and a Reflection of Internet Copyright Practice, by Howard Anawalt22 Dayton L.Rev. 393 (1997)
B. Article: A Narrow View of Creative Cooperation: The Current State of Joint Work Doctrine by Laura G. Lape, 61 Alb. L. Rev. 43 (1997)
C. Will Fair Use Function on the Internet? by DanThu Thi Phan, 98 Colum. L. Rev. 169 (Jan. 1998)
D. Article: The Conflict Between the First Amendment and Copyright Law and Its Impact on the Internet by Stephen Fraser, 16 Cardozo Arts & Ent. LJ 1 (1998)
E. Intellectual Property Crimes by Lilli Hsieh, Jennifer McCarthy and Elizabeth Monkus, 35 Am. Crim. L. Rev. 899 (Spring 1998)