THIS PAGE WAS CREATED BY MICHAEL J. WELCH FOR
PROFESSOR WISEMAN'S LAW AND THE INTERNET CLASS
OFFERED AT GEORGIA STATE UNIVERSITY COLLEGE OF LAW.
 
VISIT THE THE HOME PAGE FOR THIS SITE WITH LINKS TO A
HYPERNEWS SITE ON COPYRIGHTS ON THE INTERNET AND MORE.
 
 
THE APPROPRIATE STANDARD FOR INTERNET COPYRIGHT LIABILITY:
WHO SHOULD BE LIABLE FOR ONLINE COPYRIGHT INFRINGEMENT?
By Michael J. Welch
 
Table Of Contents
 
  I.  INTRODUCTION 

 II.  OVERVIEW OF COPYRIGHT LAW

III.  PERTINENT INTERNET CASES

IV.  A MODEL OF INTERNET COPYRIGHT LIABILITY

 V.  CONCLUSION

VI.  FOOTNOTES

I.  INTRODUCTION
    The unique nature of the Internet has brought about new concerns in various areas of law.  Perhaps no where is  concern more widespread than in the area of Internet copyrights.  One novel or at least uncertain issue in this area is the appropriate standard of copyright liability for unauthorized online usage of copyrighted works.  Additionally, there is the question of who is liable for copyright infringement, i.e. does liability stop at specific individuals posting copyrighted work in an unlawful manner, or does it extend to entities such as bulletin board services and online service providers?

    The issues of the appropriate standard for Internet copyright liability and of who should be liable for online copyright infringement are matters that have arisen on a regular basis in recent years.  Some argue that established copyright laws are all that is needed to deal with new Internet copyright concerns.  Others contend that new laws must be passed.  Meanwhile, courts have had to deal with these issues with or without new laws in deciding the liability of defendants for alleged Internet copyright infringement.

    This focus of this comment will center on the issues of the appropriate standard and scope of Internet copyright liability.  Part II will set out a brief overview of copyright law, including the theories behind having laws to protect copyrighted works.  Part III will lay out the facts of pertinent Internet cases and discuss the reasoning of courts in reaching different conclusions on the appropriate scope and standard of Internet copyright liability.  Part IV will propose a model of Internet copyright liability consistent with the principles behind American copyright laws.  The author's concluding reflections will be presented in Part V.

II.  OVERVIEW OF COPYRIGHT LAW

    The idea of protecting the works of authors and other creators dates back to beginning of America.  There is in the Constitution a copyright provision stating that "[t]he Congress shall have Power...To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries."[1]  Shortly after the Constitution's adoption, Congress used this power and passed the Copyright Act of 1790.[2]  The act was mostly tailored after the old British Statute of Anne, which had provided authors protection from the corrupt business practices of publishers, stationers, and printers.[3]  The types of work granted  protection have expanded over time, through congressional amendments to the Copyright Act and related judicial interpretations, reflecting a growing recognition that creativity and intellectual expression occur in various media.[4]  Since the Copyright Act of 1976, copyright subsists in: "original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device."[5]

    The primary principle behind copyright protection in the United States involves providing creators an incentive to produce so that all of society is benefited.  A secondary purpose is promoting fairness where creators are entitled to the profits from and control over their work, but providing an incentive to produce has always been the main rationale for copyright protection.  That copyright laws are principally for the benefit of the general public is demonstrated by the "[t]o promote the Progress of Science and useful Arts"[6] provision in the Constitution, by Congress, while drafting another revision to the Copyright Act in 1909, stating that "[i]n enacting a copyright law Congress must consider. . . two questions: First, how much will the legislation stimulate the producer and so benefit the pubic, and second, how much will the monopoly granted be detrimental to the public?  The granting of such exclusive rights, under the proper terms and conditions, confers a benefit upon the public that outweighs the evils of the temporary monopoly,"[7] and by the holdings of various cases.

III.  PERTINENT INTERNET CASES

    Section 501 of the Copyright Act provides that "[a]nyone who violates any of the exclusive rights of the copyright owner ... is an infringer of the copyright ...."[8]  As Section 501 has been interpreted a plaintiff is not required to demonstrate that an infringer had knowledge of the infringing nature of particular activities or was aware that work involved was copyrighted.  Thus, a strict standard of liability is generally applied for copyright infringement.  Traditionally, an entirely innocent purpose is no defense to a charge of unauthorized reproduction or other use of a work that falls within the copyright owner's exclusive Section 106 rights.[9]  Nevertheless, the Internet provides a substantially novel scenario, and whether or not to apply a strict liability standard to a bulletin board service ("BBS"), for example, that has no actual knowledge of copyright infringement by one of its users, is something courts have had to consider.

A.  Playboy Enterprises, Inc. v. Frena

    In Playboy Enterprises, Inc. v. Frena[10] the Court considered the copyright infringement liability of a BBS permitting users to upload and download "adult content" photographs.  The court held, applying the traditional strict standard for copyright liability, that the BBS operator had infringed copyrights in photographs from Playboy magazine.[11]  The decision rested on the conduct of the BBS subscribers in uploading and downloading the photographs, even though the subscribers did so, allegedly, without the BBS operator's knowledge.[12]  Thus the court not only found that a BBS could be liable for the copyright infringements of its users, but also applied a standard of strict standard liability so that knowledge of copyright infringements by a user is not necessary for it to be liable.

B.  Sega Enterprises Ltd. v. MAPHIA

    Shortly after Frena was decided, a federal district court in California reached a similar conclusion concerning the standard of liability for copyright violation in an online context.  The case, Sega Enterprises Ltd. v. MAPHIA,[13] also concerned uploading to and downloading from a BBS, this time involving video game software.  The court granted a preliminary injunction against the BBS operation based upon a finding of substantial likelihood that the plaintiff ultimately would demonstrate that the operator had infringed the plaintiff's copyrights by permitting users to upload, store and download video game software on the BBS.[14]

C.  Religious Technology Center v. Netcom On-Line Communication Services

    Religious Technology Center v. Netcom On-Line Communication Services Inc.[15] held differently from the Frena and Maphia decisions.  The case addressed the question of whether an online service provider should be liable for user-contributed content that included copyrighted materials, more specifically Scientology works of L. Ron Hubbard, disseminated without the copyright owner's authorization.[16]  The plaintiffs, owners of the copyrights in Hubbard's works, claimed that two service provider defendants (an Internet access provider, Netcom, and a bulletin board operator, Klemesrud) had infringed the plaintiffs' copyrights because of the postings of the third defendant, Erlich, a former Scientology insider and minister turned critic of the organization.[17]  The court held that, under certain circumstances, an online service provider cannot be held liable for the acts of a user posting copyrighted material on automatically-maintained public bulletin boards, if such provider had no actual knowledge of the infringing nature of the acts.[18]  The decision also suggested, but did not necessarily mandate, that a service provider that receives a cease and desist letter concerning a particular copyright infringement might not have actual knowledge of the infringement until a reasonable period of time passes and unless the letter was reasonably specific as to the details of the alleged infringement.[19]
 
D.  Frank Music Corp. v. CompuServe Incorporated

    Another pertinent case, Frank Music Corp. v. CompuServe Incorporated[20], involved music publishers who commenced suit against CompuServe Incorporated, alleging copyright infringement based on a strict liability theory like that applied in Frena and Sega.  The plaintiffs alleged that CompuServe was liable for the acts of its subscribers, who had uploaded to and downloaded from a CompuServe Forum sound recordings of the publishers copyrighted musical compositions.[21]  The case was concluded by use of a court-approved settlement.
 
    The Frank Music settlement endorsed an "actual knowledge" standard for liability, like that in Netcom, so that subscribers may upload music to a preview area on a CompuServe Forum without any liability attaching to CompuServe or the Forum Manager.  Under the settlement, CompuServe assumed no subsequent liability or obligations for allegedly infringing downloads from a Forum unless CompuServe had actual knowledge that licensable music files were being uploaded to that Forum.  Since the settlement, where CompuServe has no knowledge of uploads or downloads of licensable music, its only obligation is to use its "reasonable best efforts" to ensure that a Forum's Managers (as opposed to CompuServe) avoid infringement.  Whatever the actual interpretation of "reasonable best efforts," there is certainly a smaller range of liability than under a strict liability standard.

E.  MAPHIA II
 
    Late in 1996, a second MAPHIA[21] ("MAPHIA II)[22] opinion was issued granting the plaintiff's motion for summary judgment.  MAPHIA II endorsed, adopted and potentially expanded the Netcom analysis described above.  In particular, MAPHIA II held that the defendant BBS operator, Sherman, was not directly liable for copyright infringement because the facts did not show that he had "caused" the copying to take place.[23]  The court found that, "Sega has not shown that Sherman himself uploaded or downloaded the files, or directly caused such uploading or downloading to occur.  The most Sega has shown is that Sherman operated his BBS, that he knew infringing activity was occurring, and that he solicited others to upload games.  However, whether Sherman knew his BBS users were infringing on Sega's copyright, or encouraged them to do so, has no bearing on whether Sherman directly caused the copying to occur.... Furthermore, Sherman's actions as a BBS operator and copy seller are more appropriately analyzed under contributory or vicarious liability theories.  Therefore, because Sega has not shown that Sherman directly caused the copying, Sherman cannot be liable for direct infringement."[24]  While holding Sherman not liable for direct infringement, the court found that the he was contributorily liable because BBS users were directly infringing Sega's copyrighted video game software, Sherman knew that BBS users were copying Sega's software, and his operation of the BBS constituted "substantial participation" in the direct infringements of users.[25]

    The traditional strict standard of liability for copyright infringement may not be applied against indirect copyright violators in an online context.  Clearly one who knowingly posts or disseminates materials without the authorization of copyright owners is subject to a standard of strict liability.  However, the current trend is for courts to look at the actual knowledge of copyright infringement an online service provider or BBS possesses in determining liability.  So liability goes beyond specific individuals posting copyrighted work in an unlawful manner and extends to BBSs and online service providers, but the standard applied in determining a service provider's liability is more lenient than the strict liability standard applied in cases concerning individuals directly and unlawfully posting copyrighted work on the Internet.
 

IV.  A MODEL OF INTERNET COPYRIGHT LIABILITY

    Because of the Internet and other technological advances, many fear that without changes in copyright law the profitability of authorship and publishing will decline.  Two theories mentioned above are generally advanced in support of such copyright law expansion.  One is based on fairness and states that technological developments should not alter the relative profit share owners of copyrighted works receive.  Under this theory copyright law should respond to prevent the reduced share in revenue copyright owners receive because of the Internet.

    The other, and more popular, theory concerns economic efficiency and endorses the idea that incentives to produce copyrightable works must not be destroyed.  This theory is the one supported by the copyright provision in the Constitution,[26] and holds that copyrights should create property rights of adequate duration and scope to provide incentives to authors and publishers to produce new works despite the threat of free-riders who may distribute their works.  It is argued that without additional copyright protection there will be inadequate incentive to produce new works as nearly anyone might disseminate such works to millions and millions of people through the Internet.  Under this theory many contend that the incentive to produce should be served by an expansion of copyright law to offset the harmful effects of new technologies on copyright owners' profits.  Naturally, anyone supporting this theory must believe that the level of copyright protection before the rise of the Internet and other new technologies was ideal, or, alternatively, lacking even then.

    Anyone knowingly and directly infringing copyrights in an online context should be held liable under the strict liability standard.  This position is consistent with traditional copyright law and serves the principles behind copyright law by protecting a copyright owner's right to profits and by providing creators incentive to produce as liability is strict for those who intentionally infringe protected works.  However, it is the author's position that, consistent with holdings of cases such as Netcom, Internet service providers, BBSs, and other entities accused of indirect copyright violation must be shown to have either known or should have known of a copyright violation by one of its users before liability for infringement attaches.  The reason for this known or should have known standard is that direct online violators of copyright are already liable, and while the principles behind copyright laws may be served by strict liability for even indirect online infringers, there is the competing goal of widespread dissemination of information to the public.

    If BBSs and online service providers were held strictly liable for the copyright infringements of their users, the public's right to wide dissemination of information would be severely harmed.  If a BBS, for example, felt a copyright violation was even remotely possible if a work was allowed to be posted on the BBS, then the BBS operators would probably not allow the work to be posted for fear of liability.  Additionally, BBS operators and so on would have no choice but to carefully examine and investigate all works before they were allowed to be posted because under a strict liability standard a work posted in violation of copyright always means liability for the BBS.  The result would be great delays in works being posted as the works would be investigated, adding new expenses, to ensure no copyright infringement is involved.  Some works might never get posted even though to do so would not be in violation of copyright simply because operators decided to play it safe or made a wrongful conclusion as to the issue of copyright infringement. 

    Perhaps the appropriate standard of liability for online service providers and BBSs is best derived by comparisons to other media.  Unlike a book publisher who actually publishes works and receives financial gains for doing so, a BBS or online service provider simply provides the means for its users to post information.  Thus, an online service provider or BBS is more like a telephone company than a book publisher.  It is hard to imagine the implications of imposing a strict standard of liability on a phone company for the communications of its phone customers.  Fortunately, phone companies do not have to worry about such strict liability, but the Internet is new and the cases have gone both ways.

    Courts, like the ones in Netcom and Compuserve, have endorsed a known or should have known standard for copyright infringement liability to attach to BBSs and online service providers.  Nonetheless, even though the trend appears to favor this limited liability standard, courts, such as in Frena, have applied the traditional strict liability standard to BBSs and online service providers.  The final solution lies in Congressional action.  It is true that either Congress or the courts may create a known or should have known standard.  However, it is Congress that has the constitutional authority to enact copyright laws.[27]  In addition, it is the legislative branch of government that has the best "institutional ability to accommodate fully the varied permutations of competing interests that are inevitably implicated by such new technology."[28]  A legislative solution would provide clarity and certainty, and would be applied in a uniform fashion nationwide.  Nationwide application is appropriate as dissemination of information through the Internet is a national and international endeavor. 
 

 V.  CONCLUSION
 
     As it does in many areas of law, the Internet presents new issues in copyright law.  The question of who should be liable for online copyright infringement is one of these issues.  Anyone directly infringing one's copyright should be and is held to the traditional strict standard of liability.  However, the liability of online service providers, BBSs, and other indirect online copyright infringers is another matter.  Upon balancing the dual principles behind copyright laws of protecting a copyright owner's right to revenue from his work and of benefiting society by providing an incentive for people to produce with the goal of widespread dissemination of information to the public, it becomes apparent that BBSs, online service providers, and other indirect infringers of copyright should be held to a known or should have known standard.  This is true because these entities are more like a telephone company than a book publisher and because to hold them to a strict standard of liability would severely hinder any free exchange of information and ideas via the Internet.  Congress should enact legislation so that a known or should have known standard is applied universally against BBSs, online service providers, and other indirect infringers of copyrights on the Internet.  Until Congress takes action, the amazing ability of the Internet to communicate information and ideas will be threatened as courts may apply a strict standard of liability against BBSs and so on despite the current trend, and as BBSs and so on may respond by severely limiting what is posted online for fear of such liability.  
 
 VI.  FOOTNOTES

1. U.S. Const. art. I, S8, cl. 8.

2. Copyright Act of 1790, Ch. 15, 1 Stat. 124 (1790).

3. See Scott Abrahamson, Seen One, Seen Them All? Making sense of the Copyright Merger Doctrine, 45 UCLA L. Rev. 1125, 1130-1131, (1998).

4. Id. at 1131.  See amendments to the Copyright Act to include: prints (2 Stat. 171 (1802)); musical compositions (excluding rights to public performance) (4 Stat. 436 (1831)); dramatic compositions (including rights to public performance) (11 Stat. 138 (1856)); photographs (13 Stat. 540 (1865)); paintings, drawings, sculptures, and models or designs for works of fine arts (16 Stat. 212 (1870)).

5. Copyright Act of 1976, 17 U.S.C. 102(a).

6. Id. at n1.

7. See Register of Copyrights, 87th Cong., General Revision of the U.S. Copyright Law 5 (Comm. Print 1961) (citing H.R. Rep. No. 60-2222).

8. 17 U.S.C. S 501.
 
9. 17 U.S.C. S 106.

10. Playboy Enterprises, Inc. v. Frena, 839 F. Supp. 1552 (M.D. Fla. 1993).

11. Id. at 1561.

12. Id. at 1561.

13. Sega Enterprises Ltd. v. MAPHIA, 857 F. Supp. 679 (N.D. Cal. 1994).

14. Id. at 682.

15. Religious Technology Center v. Netcom On-Line Communication Services Inc., 907 F. Supp. 1361 (N.D. Cal. 1995).

16. Id. at 1365.

17. Id. at 1365-1366.

18. Id. at 1369.

19. Id.

20. Frank Music Corp. v. CompuServe Incorporated, 93 Civ. 8153 (JFK).

21. Id. at 8160.

22. Sega Enterprises Ltd. v. MAPHIA, 948 F. Supp. 923 (N.D. Cal. 1996).

23. Id. at 932-933.

24. Id. at 932.

25. Id at. 932-933.

26. Id. at n.1.

27. Id. at n1.
 
28. Sony Corp. of Am. v. Universal City Studios, 464 U.S. 417, 431 (1984).