II. Introduction to Copyright Protection

Copyright infringement claims provide the basis for a tremendous amount of e-commerce litigation disputes. The existence of the Internet as an avenue for immediate and surreptitious unauthorized distribution of copyrighted works has presented an unprecedented threat to copyright protection, notwithstanding the fact that for the most part, all of the copyright holder's traditional rights and interests apply in the Internet context. Accordingly, understanding copyright infringement liability with respect to e-commerce requires an understanding of the basic copyright law.

A. The Copyright Holder's Exclusive Rights

In general, any creative, original expression such as a poem, a painting, or a song can be the subject of copyright protection. The Copyright Act provides that "copyright protection subsists...in original works of authorship fixed in any tangible medium of expression... from which they can be perceived, reproduced, or otherwise communicated..." 17 U.S.C. 101. Thus, once a creative work has become appropriately fixed, i.e., written down, videotaped, etc., it is entitled to copyright protection. But see Darden v. Peters, 402 F. Supp. 2d 638, 642-44 (E.D.N.C. 2005) (affirming denial of copyright registration of website reproducing public maps, reflecting limited changes by the website author, and noting that "the longstanding practice of the Copyright Office is to deny registration of the arrangement of elements on the basis of physical or directional layout in a given space, whether that space is a sheet of paper or a screen of space meant for information displayed digitally.")

The copyright law permits the copyright owner to preclude and/or recover for any unauthorized "copying" of her work, that is to say any unauthorized engagement in any of the uses designated as the copyright holder's "exclusive rights" under Section 106 of the Copyright Act. "The owner of a copyright ... has the exclusive rights...(i) to reproduce the copyrighted works in copies...(ii) to prepare derivative works based upon the copyrighted work; (iii) to distribute copies ... of the copyrighted work to the public... and (iv) in the case of...pictorial works...to display the copyrighted work publicly." See e.g. Avtec Systems, Inc. v. Peiffer, 21 F.3d 568, 571 (4th Cir. 1994); Ford Motor Co. v. Summit Motor Products, Inc., 930 F.2d 277, 291 (3d Cir. 1991); Meridian Project Systems, Inc. v. Hardin Construction Company, LLC, 426 F. Supp. 2d 1101, 1107-09 (E.D. Cal 2006); I-Sytems, Inc. v. Softwares, Inc., 2004 WL742082 at *7 (D. Minn.); Playboy Enterprises, Inc. v. Frena, 839 F. Supp. 1552, 1555 (M.D. Fla. 1993). The copyright holder can recover compensatory or statutory damages upon establishing a case of infringement, and injunctive relief may also be obtained to prevent further incursions upon her rights.

Thus, under the copyright law, someone who wishes to make copies of a book must first obtain permission from the copyright owner, which is usually granted in the form of a license for a fee. On the other hand, someone who merely wishes to read a book (which is not one of the exclusive uses or rights) need only gain access to it; once in possession of a copy, the user is free to read a book without first gaining the author's permission or paying her any fees or royalties of any kind.

B. Limits On the Copyright Holder's 106 Rights

Notwithstanding the express reservation of exclusive rights and uses by Section 106, the copyright law permits the public certain intrusions upon the copyright holder's statutory rights. The principal, countervailing public rights and privileges are as follows:

All copyrighted works are subject to the Fair Use Doctrine, "an equitable doctrine [that] permits other people to use copyrighted material without the owner's consent in a reasonable manner for certain purposes." See Rogers v. Koons, 960 F.2d 301, 308 (2d Cir. 1992). The doctrine reflects Congress' belief that there are some circumstances in which the benefit to society in permitting the unauthorized engagement in one or more of the exclusive rights in connection with a particular copyrighted work, outweighs the author's interest in being able to control or profit from the use of her work.

Section 107 sets out four factors in evaluating whether a particular use should be allowed as a fair use: (i) the purpose and the character of the use, such as whether it is primarily commercial in nature or, if it is a transformative use, that is, a use that substantively enhances or builds upon the copyrighted work; (ii) the nature of the copyrighted work involved, that is, whether it is primarily a creative work such as a fiction novel, or a factual work, such as a biography; (iii) the amount and substantiality of the work to be used without the author's permission; and (iv) the effect that allowing the unauthorized use is likely to have upon the commercial market for the copyrighted work. See e.g. Wall Data Incorporated v. Los Angeles County Sherriff's Department, 447 F. 3d 769, 777-81 (9th Cir. 2006) (holding that the unauthorized duplication of licensed software, undertaken in order to avoid the purchase of additional licenses, is not a Fair Use); Kelly v. Arriba Soft Corp, 77 F. Supp. 2d 1116, modified, 336 F.3d 811 (9th Cir. 2003) (the unauthorized creation of "thumbnail" versions of copyright images on the Internet, for use in creating an Internet image search engine, is a Fair Use of the protected images); Religious Technology Center v. Lerma, 908 F. Supp. 1362, 1366-67 (E.D. Va. 1995) (unauthorized publication of portions of copyrighted church documents in newspaper investigative report is a Fair Use).