E-Commerce and Copyright Handout by Eric Goldman

E-Commerce and Copyright
By Eric Goldman, Cooley Godward (egoldman@cooley.com)

Copyright Basics.  Constitutionally granted monopoly codified by the 1976 Copyright Act.  Copyright protects original works of authorship fixed in a tangible medium of expression.

·        original: does not need to be novel/unique, but must be created by the author

·        works of authorship: expression v. facts; expression v. ideas.

Feist is a landmark 1991 Supreme Court case.  Local telephone company publishes white pages for local area.  Competitor white pages publisher for larger area asks for license, is told no.  So competitor copies the white pages.  Supreme Court says there can be no copyright in white pages information, since facts cannot be protected per the Constitution.  In so doing, the court rejected the “Sweat of the Brow” doctrine that had given protectable copyright interests in facts if someone had spent enough time to collect them.  But Congress continues to consider database protection rights, and the EU protects databases….

·        fixed in a tangible medium of expression.  Assume that this applies to everything transmitted online

Copyright is owned by the author unless it is created by an employee in the scope of employment or there is a written assignment/WFH or exclusive license.

Copyright owners have 6 exclusive rights: reproduce, distribute, create derivative works, publicly perform (certain categories), display publicly (certain categories), digitally perform (sound recordings). There are also very limited moral rights in the US, probably irrelevant in online context.

The exclusive rights are limited a number of ways.  First, they are time limited to life + 70 years or, in the case of works for hire, 95 years from first publication or 120 years from the date of creation. Second, there are a number of statutory exceptions to the exclusive rights, codified in Sections 108 to 120.  Third, doctrine of fair use.

Fair use is an affirmative defense once there has been an infringement.  Fair use is intended to promote criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research.  Four factor test for fair use:

·        purpose and character of the use (educational v. commercial)

·        nature of the copyrighted work:  published v. unpublished; fact v. fiction.

·        amount and substantiality of portion taken

·        effect of the infringement on the potential market for or value of the work

Copyright registration costs $20 per work and is very simple.  Registration is not required to have protectable rights, since protection begins the moment that a work is fixed in a tangible medium of expression.  However, there are procedural advantages to registering your copyright within specified period of time (i.e. generally 3 months from first publication): eligibility for statutory damages and attorneys fees.

Copyright notices are not required to protect rights, although they militate against the partial defense of innocent infringement.

New WIPO Rights.  In the Digital Millennium Copyright Act, Congress added some new meaningful restrictions:

·        17 USC 1201(a)(1): cannot circumvent a technological measure that effectively controls access to a copyrighted work.  This provision is not effective until 2000.

·        17 USC 1201(a)(2) and 1201(b): cannot manufacture or distribute any technology that is primarily designed or produced for the purpose of circumventing technological protection devices that control access or protect traditional 106 copyright rights, or has only limited commercial uses otherwise, or that is marketed knowing it will be used to circumvent.

·        1201 exceptions: library browsing, law enforcement purposes, reverse engineering, encryption research, controlling access for minors, privacy protections, security testing.

·        17 USC 1202.  Cannot provide false copyright management information, and cannot remove or alter CMI (or distribute a copyright work knowing that CMI has been removed or altered).  CMI = title of work, copyright notice, author’s/copyright owner’s name and other identifying info, info about other contributors (i.e., credits), “terms and conditions of the work,” identifying numbers/symbols or links referring to such information, other info specified by Copyright Office.  [DOES THIS CREATE A RIGHT OF ATTRIBUTION?  DOES THIS AFFECT TRADITIONAL COPYING, SINCE ANY CUT AND PASTE WITHOUT ATTENDANT CMI IS A VIOLATION (NO FAIR USE EXCEPTION TO 1202)?]

Types of Infringement

·        Direct infringement = access + substantial similarity.  Direct copyright infringement is a strict liability tort.  Something less than an exact duplicate can be infringement.

·        Contributory infringement = “with knowledge of the infringing activity, induces, causes or materially contributes to the infringing activity of another.”  In the case of devices, no contributory infringement if the device is capable of substantial noninfringing uses.  (Sony)

·        Vicarious liability = (1) the right and ability to control the infringer’s acts, and (2) receives a direct financial benefit from the infringement.

·        Criminal copyright infringement (17 USC 506) = willful copyright infringement either (1) for purposes of commercial advantage or private financial gain, or (2) by the reproduction or distribution, during any 180-day period, of copyrighted works with a total retail value of more than $1,000; with respect to 1201 or 1202, willful infringement for purposes of commercial advantage or private financial gain.  In either case, remedies can include jail time.

Infringement Issues.

(a)               Browsing.  User must make a RAM copy of the web page to browse it.  MAI v. Peak held that copying into RAM is infringement.  Clinton Administration White Paper from 1995 argued that browsing was infringement.  Should browsing always be fair use?  Is there an implied license to browse?  Is there a way to destroy the implied license?

(b)               Linking.  If browsing is an infringement, then providing a link could be contributory infringement (knowledge that user will infringe + substantial participation by providing link). Technology exists to inhibit linking (cgi script, software to refuse linking, refuse access by spiders, password protection).  Should it be fair use/implied license if the linked site does not use these controls?

Ticketmaster v. Microsoft.  Ticketmaster sued Microsoft for deep linking on trademark/unfair competition theories.  Case recently settled without a result; Microsoft appears to have stopped its deep linking.

(c)                Framing.  If linking is contributory infringement, then framing will also be contributory infringement.

Total News case: Total News framed newspaper publisher sites; provided navigation bar and banner ad bar.  Publishers sued Total News, primarily on a misappropriation theory.  Case settled with publishers granting a revocable license to link (no frames) = total loss for Total News.

Also, is a frame a derivative work?  Futuredontics case.  Plaintiff is arguing that the frame creates a derivative work of the framed site, which is the total look and feel of the screen shot.  Plaintiff moves for SJ and loses; then defendant moves for SJ and loses.  So framing is neither clearly a derivative work nor not a derivative work as a matter of law.

(d)               Search engine full-text indexing.  For full text search engines to work, they must make a full copy of a web page and store the copy into the database.  Is this copyright infringement, fair use or implied license?  If there are technologies like Robot Exclusion Headers to prevent indexing, does the failure to use such technologies support the implied license?  Also, most search engines display a small portion of the page in the search results.  Copyright infringement, no copying at all, or fair use?

(e)               Caching.  Caching means to make an extra copy of content for future faster retrieval.  Local caching is done by browsers.  Proxy caching is done at the server level, and is used to reduce the need to repeatedly request copies of the same thing over the Internet.  Infringement?  17 USC 512(b).  Proxy caching is not infringement if (a) third party material, (b) sent by third party to a system user, (c) storage is performed automatically for purpose of making the content available to other users, (d) no modification of content, (e) cacher complies with rules regarding refreshing communicated in an industry standard way (so long as such rules are not unreasonable), (f) cacher does not interfere with technology used to collect info from users (i.e., what could have been divined from server log analysis) under specified terms, (g) no caching of for-pay materials unless delivered only to paying customers, and (h) cacher removes infringing material upon notice from the cached site under specified circumstances.

Technology Approaches to Control Copyright Infringement.

Pre-Infringement.  Limited Functionality; Date Bombs; Copy Protection; Encryption Envelopes; Contracts.

Metering.  Access Codes; Rights Management Envelopes; Hardware Devices to Manage Envelopes; Downloadable Executables; Centralized Computing; Digital Certificates; Copyright Clearinghouses; Sale of Physical Copies.

Post-Infringement.  Agents; Steganography; Copyright Litigation.