III. Copyrights and the Internet

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III. Copyrights and the Internet

A. Threshold Litigation Issues

Many of the early Internet copyright disputes did not focus on whether the unauthorized uploading of a copyrighted work on to the Internet (the predecessor activity to peer to peer file sharing) constituted copyright infringement, but rather, on who could be held liable for such conduct. Internet Service Providers ("ISPs") and similarly situated defendants argued that liability should be restricted to the party who actually posts copyrighted material, and should not extend to third-parties. See e.g. Sega Enterprises Ltd. v. Maphia, 857 F. Supp. 679, 683, modified 948 F. Supp. 923 (N.D. Cal. 1994), wherein Sega brought suit for copyright and trademark infringement, and related claims, against defendants who maintained an Internet electronic bulletin board, through which their subscribers bartered and traded Sega video games. Defendants argued that they should not be held liable because they neither participated in nor were able to control their subscribers' conduct, and had no way of knowing in advance when it would occur. While the court expressed some concerns with regard to hindering the development of the Internet, it nonetheless held that defendants could be held liable for contributory copyright infringement.

In Religious Technology Center v. Netcom On-Line Comm., 907 F. Supp. 1361 (N.D. Cal. 1995), the court attempted to harmonize the various decisions regarding just who should be held liable (and for what) in connection with unauthorized postings of copyrighted material on the Internet. In that case, the Church of Scientology brought suit against a former minister who posted copyrighted Scientology texts on to an electronic bulletin board, and also named as defendants the operator of the bulletin board, as well as the IAP Netcom.

In a detailed opinion, the court explained the traditional copyright distinctions between different theories of infringement liability (i.e., direct, contributory, and/or vicarious) almost all of which rights and liabilities are implicated in unauthorized Internet postings. With regard to liability for direct infringement, the court held that neither Netcom nor the bulletin board operator had committed acts in violation of the Church's 106 exclusive copyrights. 907 F. Supp. at 1369-70. See also, Playboy Enterprises Inc. v. Russ Hardenburgh, Inc., 982 F. Supp. 503, 512 (N.D. Ohio 1997) (because setting up an electronic bulletin board is not an exclusive right under 17 U.S.C. 106, a party who does no more than that can not be liable for direct infringement, although the court found infringement by defendants on other grounds.); Parker v. Google, Inc, 422 F. Supp. 2d 492, 497 (E.D. Pa. 2006) ("When an ISP automatically and temporarily stores data without human intervention so that the system can operate and transmit data to its users, the necessary element of volition [for direct infringement] is missing... It is clear that... automatic archiving... and [caching] of websites in [response] to users' search queries do not include the necessary volitional element to constitute direct copyright infringement.")

On the other hand, the court held that with respect to liability for contributory infringement, which requires a finding of knowledge of the infringing activity, the Church had at least raised an issue of fact as to whether Netcom and the bulletin board operator had aided and abetted the infringement. 907 F. Supp. at 1374. Accord, Playboy v. Russ Hardenburgh, supra, 982 F. Supp. at 514 (finding contributory infringement where defendants "clearly induced, caused, and materially contributed to any infringing activity which took place on their [bulletin board]"); see also Ellison v. Robertson, 357 F. 3d 1072, 1076 (9th Cir. 2004); Warner Bros. Records, Inc. v. Souther, 2006 U.S. Dist. 42249 (defendant's denial of participation in direct infringement creates an issue fact, to be clarified through discovery and potentially resolved through summary judgment.); Perfect 10, Inc. v. Cybernet Ventures, Inc., 213 F. Supp. 2d 1146, 1168-74 (CD. Ca. 2002); but cf. Perfect 10, Inc. v. Visa International Service Association, 2004 WL 1773349 (N.D. Cal.) (providing "neutral" financial services to owners of infringing website is not a basis for contributory or vicarious liability); accord, Faulkner v. National Geographic Society, 211 F. Supp. 2d 450, 472-74 (S.D.N.Y. 2002). The court reached the same conclusion with respect to the question of vicarious liability, which requires a factual determination that the defendant (i) had the right and ability to control the infringing activity and (ii) received a direct financial benefit from the infringement.

The Religious Technology analysis ultimately provided the basis for those portions of the Digital Millennium Copyright Act ("DMCA), which virtually extinguish ISP liability in connection with the misconduct of third parties. Under the DMCA, once an ISP becomes aware of copyright infringement activity, it can avoid liability by taking appropriate action against the subject subscriber. (See Section III D. below.)

B. Direct Internet Infringement, Peer to Peer File-Sharing, and the Emergence of Inducement Liability

The absence of detailed substantive analyses of direct infringement in the Internet copyright context in many of the early Internet copyright cases has resulted in an unusually vague and unsettled legal landscape in this area. For example, recently in Advance Magazine Publishers, Inc. v. Leach, 466 F. Supp. 2d 628 (D. Md. 2006) the defendant asserted the common law doctrine of adverse possession as his defense against liability for his undisputed acts of copyright infringement. The defendant's business consisted of his unauthorized scanning of pulp fiction literary works, including The Shadow, Doc Savage, and The Avenger, into electronic form, and making "advertiser-supported electronic copies" available to the public for sale from his websites, and even through online booksellers such as Amazon.com and Barnesandnoble.com.

Plaintiff contends that by scanning into electronic form, displaying, and selling or otherwise making available to the public, more than 500 of Plaintiff's publications, Defendant has infringed its copyrights in those publications under 17 U.S.C. § 501 (a)... Defendant asserts that his actions cannot constitute infringing activity because he has acquired the copyrights to Plaintiff's publications through the doctrine of adverse possession. Defendant alleges that he has maintained a publicly available website for nearly 8 years, which is open and notorious, hostile to the interests of the copyright owner, continuous, and under claim of right.

466 F. Supp. 2d at 634-35.

The court acknowledged that the application of common law adverse possession to intellectual property is a novel issue, noting that no court has addressed the issue since the 1976 revision of the Copyright Act. Nonetheless, the court observed that adverse possession is a creature of state law, and is thus preempted by federal copyright law. 466 F. Supp. 2d at 635-36. Moreover, in an opinion unique in its detail in this context, the court specifically explained how and why defendant's unauthorized digital activities constituted infringement upon the plaintiff's Section 106 exclusive rights:

'Section 106 of the Copyright Act confers a bundle of exclusive rights to the owner of the copyright,' including the rights to reproduce, create derivative works, distribute, perform, and display the copyrighted work....Plaintiff alleges that Defendant has violated its exclusive rights of reproduction, distribution, and display in the publications Defendant makes available on his websites. Plaintiff contends that Defendant violated its exclusive right to reproduce the publications by scanning into electronic form the text, original illustrations, and cover art of its publications....It is well-established that photocopying a copyrighted work without the owner's permission infringes the owner's right of reproduction....Although Defendant used a scanner to create a digital copy of a work, rather than a photocopier to print a physical copy, the methods of copying are equivalent and they are both infringing. A digital copy made without the owner's permission is copyright infringement....Thus, Defendant has infringed Plaintiff's exclusive right to reproduce its publications. Furthermore, Plaintiff alleges that Defendant violated its exclusive right to display its publications by making them available for the public to view as HTML pages on his websites....To infringe an owner's right to display, a person must (1) display a copy of the work (2) to the public... 'Display' covers any showing of a copy of the work, 'either directly or by means of a film, slide, television image or any other device or process.' 17 U.S.C. § 101. To display publicly means 'to transmit or otherwise communicate a ... display of the work ... to the public, by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times... Displaying a copy of a work on the Internet, especially on a commercial site, falls squarely within the definition of 'public display.' Defendant's posting of Plaintiff's publications on his websites infringe Plaintiff's right of display. Finally, Plaintiff claims that Defendant violated its exclusive right to distribute its publications by making them available online as 'advertiser-supported downloads ... as well as by selling his reproductions on CD-ROM compilations, DVD-ROM compilations and print books or "reprints."'... In a case that bears directly on this issue, the Supreme Court held that two online database companies violated six freelance authors' rights of distribution by making copies of their articles available to the databases' users without the authors' consent. New York Times Co., Inc. v. Tasini, 533 U.S. 483, 488, 121 S. Ct. 2381, 150 L. Ed. 2d 500 (2001). Defendant operates what is essentially an online database of literary works, and by making available unauthorized copies of Plaintiff's publications, he has infringed its right to distribution.

466 F. Supp. 2d at 637-38

Copyright litigants and the courts have also begun to explore the nature and extent of the substantive protection afforded to websites under the copyright law. In Blue Nile, Inc. vs. Ice.Com, Inc., 2007 U.S. Dist. LEXIS 3874 the plaintiff raised both copyright and trademark claims in connection with defendant's mimicking of its website, and argued, among other things, that the "look and feel" of its website supported distinguishable copyright and trade dress claims.

The court agreed, denying defendant's motion to dismiss plaintiff's trade dress claims as duplicative of plaintiff's copyright claims:

Here, defendant alleges that plaintiff's copyright claims provide it with an adequate remedy because the trade dress claim 'simply reiterates its copyright claims' since '[b]oth rest on the same allegation that defendants copied specified portions of Blue Nile's website.'... Plaintiff counters by claiming that its trade dress claim is not limited by the Copyright Act because the 'look and feel' of its website is not copyrightable... Charitably read, the Court finds that plaintiff's allegations... relating to the 'design and presentation of diamond search features' is sufficient to support a claim that plaintiff is seeking to protect the 'look and feel' of its website... Determining the elements of plaintiff's website that are subject to copyright protection, and what portions of the website relate to the 'look and feel' of its trade dress claim requires greater factual development.

2007 U.S. Dist. LEXIS 3874 at *6-*8. See also Peri Hall & Associates, Inc. v. Elliot Institute for Social Sciences Research, 2006 U.S. Dist. LEXIS 26234 at *8-9 (enjoining authorized duplication of "look and feel" of plaintiff's pro-stem cell research website by defendant, in part on grounds that defendant's website is anti-stem cell research; the potential First Amendment issues appear to have been noted by the court in its observance that "Plaintiffs are not trying to prevent Defendants from creating their own website or promoting their own ideas. Plaintiffs simply ask that Defendant not infringe Plaintiffs' intellectual property rights in so doing.")

With respect to unauthorized sharing of copyright material, the Napster litigation and its progeny have made it clear that such use and dissemination of copyrighted material through peer to peer file sharing and the like, constitutes copyright infringement. See e.g. A&M Records, Inc. v. Napster, Inc., 114 F. Supp. 2d 896 (N.D. Cal. 2000). Because Internet uploading and transfer involves copying and distribution activity (i.e., 106 rights) there is no question that unauthorized file sharing constitutes direct copyright infringement. See also Sony Pictures Home Entertainment Inc. v. Lott, 2007 U.S. Dist. LEXIS 5748 at *11-12 (further holding that evidence that defendant is the owner of the IP address from which illegal downloading occurred is sufficient to establish liability, even where defendant has "wiped" his computer hard drive.); Warner Bros. Records, Inc. v. Souther, 2006 U.S. Dist. 42249 (compelling individual defendant to provide names of family residents and house guests who had access to her computer used for illegal downloads, where defendant claimed that she did not know who actually engaged in the infringing conduct.); Rogers and Hammerstein Org. v. UMG Recordings, Inc., 2001 WL 1135811 (S.D.N.Y.).

While the copyright content industries have increased their efforts to purse individual infringers, see e.g. RIAA v. Verizon Internet Services, Inc., 351 F. 3d 1229 (D.C. Cir. 2003), they have not abandoned completely the strategy of attempting to hold third-party commercial entities, such as the purveyors of peer to peer file sharing technology and/or ISPs, liable as well. This litigation strategy of course recalls the copyright litigation disputes of the early days of the Internet. Adhering to case precedent (and the DMCA) however, the courts have continued to emphasize evidence of actual knowledge of infringing conduct (or at least "willful blindness") on the part of the providers of file sharing technology and/or ISPs, as the proverbial line in the sand. See e.g. In re Aimster Copyright Litigation, 334 F. 3d 643 (7th Cir. 2003); RIAA v. Verizon Internet Services, Inc., 351 F. 3d 1229 (D.C. Cir. 2003); Hendrickson v. Amazon.Com, Inc., 298 F. Supp. 2d 914 (C.D. Cal. 2003); Metro-Goldwyn-Mayer Studios, Inc., v. Grokster, Ltd., 544 U.S. 903 (2005).

The Grokster decision and the Supreme Court's "inducement liability" rule is consistent with these decisions. The Supreme Court reaffirmed the vitality of Sony Corporation of America v. Universal Studios, 464 U.S. 417 (1984), in which it held that VCR's are not illegal per se (and that the purveyors of VCR technology were not contributory copyright infringers) because VCR's can be used for significant, non-infringing purposes, such as playing pre-recorded tapes and recording non-copyrighted and/or public domain material. Reminiscent of the holdings in such cases as Playboy v. Russ Hardenburgh, supra, 982 F. Supp. at 514, Grokster effectively extends the Sony rule to address the situation in which the technology purveyor affirmatively or actively aids and abets the copyright infringement conduct, and clarifies that the Sony shield against indirect liability does not apply in such cases. Thus, although the theories of indirect liability in the Internet context have expanded, a degree of willfulness on the part of the defendant remains a prerequisite to recovery for contributory, vicarious, and/or inducement copyright liability. See e.g. Perfect 10 v. Google, Inc., 416 F. Supp. 2d 828, 855-56 (C.D. Ca. 2006); but see In re Napster, Inc. Copyright Litigation, 377 F. Supp. 2d 796, 805-07 (N.D. Ca. 2005) (whether investors in Napster can be held liable for contributory and/or vicarious infringement, in connection with the direct infringement conduct by Napster users, is a question fact unsuitable for disposition through motion for summary judgment.)

C. Hyper-Links, Blogs, and User Generated Content Issues

In addition to unauthorized uploading/downloading and transfer of copyrighted material per se, there are several kinds of Internet conduct which involve the unauthorized incorporation of copyrighted materials into other works. Perhaps the least offensive (and most widespread) Internet "incorporation use" is that of "hyper-linking", the mechanism whereby a web page owner "links" other web pages to her own, effectively "incorporating" these pages within her site, by displaying their Internet addresses on her own Web page in the form of hypertext (e.g., http://www.qrz.com).

In as much as it permissible to "cite" to someone else's web page, a cogent argument can be made that hyper linking is no more than a convenience to the public made possible by the inherent nature of the Internet. In other words, what practical purpose could be served by requiring Internet users to copy down the web page address cite, and then separately log onto the web page site? The courts appear to have embraced this view of simple hyper linking. See e.g., Kelly v. Arriba Soft Corp., infra, 77 F. Supp. 2d 1116 (D.C.D. Cal. 1999).

At the same time, however, some of the more sophisticated uses of hyper linking raise a panoply of potential and immediate problems, many of which have yet to be conclusively litigated. Whereas the ability of a Web page owner to hyper link to someone else's web page without permission is no longer a source of controversy, other questions remain. What is the hyper linker's responsibility in connection with links to pages that contain unauthorized, protected material? See e.g. Universal City Studios, Inc. v. Corky, 273 F.3d 429, 444 (2d Cir.2001) (linking to pages which violate the anti-circumvention provisions of the DMCA also constitutes a violation of the Act.); Parker v. Google, Inc, 422 F. Supp. 2d 492, 499 (E.D. Pa. 2006) (raising but not deciding question of indirect liability for providing access to legitimate postings, which access results in unauthorized copying and distribution.) Is it appropriate to hyper link to only a portion of someone else's web page, i.e., skipping any paid ads or introductory material therein? What if the linker "frames" the linked page within her own web page (i.e., splits the screen and displays both pages simultaneously) and/or superimposes her headings onto the linked page's content? See e.g. Perfect 10 v. Google, Inc., 416 F. Supp. 2d 828, 840-45 (CD. Ca. 2006) (hyper link and framing does not constitute distribution and display, even where link is to an infringing website). To what extent is it permissible to use protected material (such as a trademark in an Internet address) in order to create a hyper link, particularly where the content of the linked page contains only unprotected material? At some point, these activities transcend mere reference to another's work or site, and become instead a form of incorporation of another's material. See e.g. Batesville Services, Inc. v. Funeral Depot, Inc., 2004 WL 2750253 (S.D. Ind.). While the courts have yet to determine a clear dividing line, see e.g. Arista Records, Inc. v. MPSBoard, Inc., 2002 WL 1997918 (S.D.N.Y.) (no liability for merely providing links to infringing web sites) the DMCA provides some parameters for assessing indirect liability in this context. See Part III D. below.

Potentially even more problematic are blogs, personal websites in which individuals express opinions and often post creative material, and invite others to participate. In addition to the familiar problems regarding liability for unauthorized posting of copyrighted material (which potentially involve the blogger, the poster, and the blog host) there is the question of copyright ownership of original posts. In many cases, various blogs and Internet "commons" sites expressly state that the posting of original material transfers ownership of the material to the site owner, however, the legal effect of such statements have yet to be tested. In other words, blog hosts may present self-executing terms as to copyright ownership, but such private agreements, even if enforceable as a matter of private contract law, might be preempted by federal copyright restrictions.

Finally there are the outright unauthorized "incorporation uses" of copyrighted material such as YouTube and the Google Library Project. In these cases there is no question that protected material has been incorporated into the defendant's web site or similar digital project, either incidentally or as part of an intentional effort to make some use of the protected work. While many of these uses and the relevant legal issues have yet to be conclusively litigated, the prudent practitioner will recall that traditional, i.e., "brick and mortar" publication/distribution of copyrighted material does not divest the copyright holder of her ownership and/or exclusive rights. Consequently, there is no reason to assume that digital or Internet publication/distribution mandates a different disposition of the typical issues regarding the right to compile, display, distribute, or otherwise exploit copyrighted material. See e.g. Michaels v. Internet Entertainment Group, Inc., 5 F. Supp. 2d 823, 830-31 (CD. Ca. 1998) ("Distribution of [a protected work] on the Internet would conflict with the [copyright holder's] exclusive rights to distribute copies of the [work] to the public...It would also interfere with the [copyright holder's] public display rights, which include the right to display 'individual images of [the work]'....Therefore, display of [portions of the work] on the Internet would also conflict with rights conferred exclusively on the [copyright holder] by the Copyright Act.").

At the same time, however, at least in the case of "incidental inclusion/incorporation", it is difficult to predict how courts will strike the balance between authors' rights and the public's rights and privileges. In today's society, proprietary intellectual property is essentially ubiquitous. To hold incidental inclusion (e.g., a billboard depicting a trademark, or copyrighted music playing on a passing car radio, captured in the background of a personal video) to be actionable infringement, is to restrict severely the public's use of a wide variety of information/media technologies. Such restrictions could also threaten the delicate balance between intellectual property protection and the social utility objectives which underlie the First Amendment. It is likely that resolution of these issues will not be had until these disputes find their way to disposition in the United States Supreme Court.

D. The Digital Millennium Copyright Act

In 1998 the Digital Millennium Copyright Act ("DMCA") became law, amending various aspects of the copyright law to address some of the unique issues presented by advances in digital information technology. See e.g. In re subpoena to University of North Carolina at Chapel Hill, 367 F. Supp. 2d 945 (M.D.N.C. 2005):

The DMCA was enacted in 1998 and, with respect to the part with which this Court is concerned, it was an effort by Congress, to resolve the unique copyright enforcement problems caused by the widespread use of the Internet....Tackling copyright infringement on the Internet required balancing the competing interests of several groups. The first set of competing interests includes those of copyright holders and end users. The DMCA 'intended to "balance the need for rapid response to potential infringement with the end-users [sic] legitimate interests in not having material removed without recourse."'....The second set of competing interests were those of copyright holders and ISPs whose services may be used to infringe copyrights. The DMCA intended to balance the interests of these parties by creating a mechanism for rights holders to inform ISPs of potentially infringing conduct while, at the same time, providing 'greater certainty to service providers concerning their legal exposure for infringements that may occur in the course of their activities.'

367 F. Supp. 2d at 947 (citations omitted). The DMCA is something of a "digital multipurpose" statute, the salient substantive provisions of which are summarized below.

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III. Copyrights and the Internet

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