Advanced Copyright Issues on the Internet

Over the years, the Internet has become the basic foundational infrastructure for the global movement of data of all kinds. With continued growth at a phenomenal rate, the Internet has moved from a quiet means of communication among academic and scientific research circles into ubiquity in both the commercial arena and private homes. The Internet is now a major global data pipeline through which large amounts of intellectual property are moved. As this pipeline is now regularly used in the mainstream of commerce to sell and deliver creative content and information across transnational borders, issues of intellectual property protection for the material available on and through the Internet have taken on great importance. Copyright law provides one of the most important forms of intellectual property protection on the Internet for at least two reasons. First, much of the material that moves in commerce on the Internet is works of authorship, such as musical works, multimedia works, audiovisual works, movies, software, database information and the like, which are within the usual subject matter of copyright. Second, because the very nature of an electronic online medium requires that data be “copied” as it is transmitted through the various nodes of the network, copyright rights are obviously at issue. Traditional copyright law was designed to deal primarily with the creation, distribution and sale of protected works in tangible copies.1 In a world of tangible distribution, it is generally easy to know when a “copy” has been made. The nature of the Internet, however, is such that it is often difficult to know precisely whether a “copy” of a work has been made and, if so, where it resides at any given time within the network. As described further below, information is sent through the Internet using a technology known as “packet switching,” in which data is broken up into smaller units, or “packets,” and the packets are sent as discrete units. As these packets pass through the random access memory (RAM) of each interim computer node on the network, are “copies” of the work being made? The case of MAI Systems Corp. v. Peak Computer2 held that loading a computer program into the RAM of a computer constituted the making of a “copy” within the purview of copyright law. This case has been followed by a number of other courts. Under the rationale of this case, a “copy” may be created under United States law at each stage of transmission of a work through the Internet. The language of two treaties discussed extensively in this paper – the WIPO 1 For example, under United States law, copyright protection subsists only in “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.” 17 U.S.C. § 102(a). 2 991 F.2d 511 (9th Cir. 1993), cert. dismissed, 114 S. Ct. 672 (1994). - 20 - Copyright Treaty3 and the WIPO Performances and Phonograms Treaty4 – leave unclear the crucial question whether the MAI approach will be internationalized. In any event, these two treaties would strengthen copyright holders’ rights of “distribution” and would create new rights of “making available to the public” a copyrighted work, both of which are implicated by transmissions through the Internet nearly as broadly as the right of reproduction. The ubiquitous nature of “copying” in the course of physical transmission gives the copyright owner potentially very strong rights with respect to the movement of copyrighted material through the Internet, and has moved copyright to the center of attention as a form of intellectual property on the Internet. If the law categorizes all interim and received transmissions as “copies” for copyright law purposes, or treats all such transmissions as falling within the right of distribution of the copyright owner, then activities that have been permissible with respect to traditional tangible copies of works, such as browsing and transfer, may now fall within the control of the copyright holder. This work discusses the multitude of areas in which copyright issues arise in an online context. Although the issues will, for simplicity of reference, be discussed in the context of the Internet, the analysis applies to any form of online usage of copyrighted works. Part II of this work discusses the various copyright rights that may be implicated by transmissions and use of works on the Internet, including new rights and remedies, as well as certain limitations on liability for online service providers afforded under federal statutes. Part III then analyzes the application of those rights to various activities on the Internet, such as browsing, caching, operation of an online service or bulletin board, linking to other sites, creation of derivative works, and resale or subsequent transfer of works downloaded from the Internet. Part III also analyzes the application of the fair use doctrine and the implied license doctrine to various Internet activities. Because the law is constantly developing with respect to many of these issues, considerable uncertainty is likely to exist as the issues continue to be worked out over time through the courts and the various relevant legislative bodies and industry organizations. II. RIGHTS IMPLICATED BY TRANSMISSION AND USE OF WORKS ON THE INTERNET This Part discusses the various rights of the copyright holder – the right of reproduction, the right of public performance, the right of public display, the right of public distribution, the right of importation, and the new rights of transmission and access – that are implicated by the transmission and use of works on the Internet. A. The Right of Reproduction The single most important copyright right implicated by the transmission and use of works on the Internet is the right of reproduction. As elaborated below, if the law categorizes all 3 World Intellectual Property Organization Copyright Treaty, Apr. 12, 1997, S. Treaty Doc. No. 105-17 (1997). 4 World Intellectual Property Organization Performances and Phonograms Treaty, Apr. 12, 1997, S. Treaty Doc. No. 105-17 (1997). - 21 - interim and received transmissions as “copies” for copyright law purposes, then a broad range of ordinary activities on the Internet, such as browsing, caching, and access of information, may fall within the copyright holder’s monopoly rights. 1. The Ubiquitous Nature of “Copies” on the Internet Under current technology, information is transmitted through the Internet using a technique known broadly as “packet switching.” Specifically, data to be transmitted through the network is broken up into smaller units or “packets” of information, which are in effect labeled as to their proper order. The packets are then sent through the network as discrete units, often through multiple different paths and often at different times. As the packets are released and forwarded through the network, each “router” computer makes a temporary (ephemeral) copy of each packet and transmits it to the next router according to the best path available at that instant, until it arrives at its destination. The packets, which frequently do not arrive in sequential order, are then “reassembled” at the receiving end into proper order to reconstruct the data that was sent.5 Thus, only certain subsets (packets) of the data being transmitted are passing through the RAM of a node computer at any given time, although a complete copy of the transmitted data may be created and/or stored at the ultimate destination computer, either in the destination computer’s RAM, on its hard disk, or in portions of both. To illustrate the number of interim “copies,” in whole or in part, that may be made when transmitting a work through the Internet, consider the example of downloading a picture from a website. During the course of such transmission, no less than seven interim copies of the picture may be made: the modem at the receiving and transmitting computers will buffer each byte of data, as will the router, the receiving computer itself (in RAM), the Web browser, the video decompression chip, and the video display board.6 These copies are in addition to the one that may be stored on the recipient computer’s hard disk.7 2. Whether Images of Data Stored in RAM Qualify as “Copies” Do these interim and final copies of a work (many of which are only partial) being transmitted through the Internet qualify as “copies” within the meaning of United States copyright law? The copyright statute defines “copies” as: material objects, other than phonorecords, in which a work is fixed by any method now known or later developed, and from which the work can be perceived, 5 If any packet is lost along the way, the originating computer automatically resends it, likely along a different path than the lost packet was originally sent. 6 Mark A. Lemley, “Dealing with Overlapping Copyrights on the Internet,” 22 U. Dayton L. Rev. 547, 555 (1997). 7 Even if a complete copy of the picture is not intentionally stored on the recipient computer’s hard disk, most computers enhance performance of their memory by swapping certain data loaded in RAM onto the hard disk to free up RAM for other data, and retrieving the swapped data from the hard disk when it is needed again. Some of this swapped data may be left on the hard disk when the computer is turned off, even though the copy in RAM has been destroyed. - 22 - reproduced, or otherwise communicated, either directly or with the aid of a machine or device. The term “copies” includes the material object, other than a phonorecord, in which the work is first fixed.8 The language of the definition raises two issues concerning whether images9 of transmitted data in RAM qualify as “copies.” First, depending upon where the data is in transit through the Internet, only a few packets – or indeed perhaps only a single byte – of the data may reside in a given RAM at a given time. For example, the modem at the receiving and transmitting computers may buffer only one or a few bytes of data at a time. A node computer may receive only a few packets of the total data, the other packets being passed through a different route and therefore a different node computer’s RAM. Should the law consider these partial images a “copy” of the work? Should the outcome turn on whether all or most of the packets of data comprising the work pass through a given RAM, or only a portion? How can interim partial images of data stored in RAM be deemed a “copy” of a work, in the case where there is no point in time at which the entire work is available in a single RAM? The White Paper published by the Working Group on Intellectual Property Rights of President Clinton’s Information Infrastructure Task Force (referred to herein as the “NII White Paper”) implicitly suggests that at least interim, partial copies of a work created in RAM in interim node computers during transmission may not themselves constitute a “fixed” copy: A transmission, in and of itself, is not a fixation. While a transmission may result in a fixation, a work is not fixed by virtue of the transmission alone. Therefore, “live” transmissions via the NII [National Information Infrastructure] will not meet the fixation requirement, and will be unprotected by the Copyright Act, unless the work is being fixed at the same time as it is being transmitted.10 The second general issue raised by the definition of “copies” is whether images of data stored in RAM are sufficiently “permanent” to be deemed “copies” for copyright purposes. The definition of “copies” speaks of “material objects,” suggesting an enduring, tangible embodying medium for a work. With respect to an image of data stored in RAM, is the RAM itself to be considered the “material object”? The image of the data in RAM disappears when the computer is turned off. In addition, most RAM is “dynamic” (DRAM), meaning that even while the computer is on, the data must be continually refreshed in order to remain readable. So the data is in every sense “fleeting.” Is its embodiment in RAM sufficiently permanent to be deemed a “copy”? The legislative history of the Copyright Act of 1976 would suggest that data stored in RAM is not a “copy.” As noted above, a “copy” is defined as a material object in which a work 8 17 U.S.C. § 101. 9 The word “image” is being used here to refer to an image of data stored in RAM to avoid use of the word “copy,” which is a legal term of art. Whether an image of data in RAM should be deemed a “copy” for copyright law purposes is the question at issue. 10 Information Infrastructure Task Force, “Intellectual Property and the National Information Infrastructure: The Report of the Working Group on Intellectual Property Rights” at 27 (1995). - 23 - is “fixed.” The statute defines a work to be “fixed in a tangible medium of expression when its embodiment in a copy or phonorecord, by or under the authority of the author, is sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration.”11 The legislative history states: [T]he definition of “fixation” would exclude from the concept purely evanescent or transient reproductions such as those projected briefly on a screen, shown electronically on a television or other cathode ray tube, or captured momentarily in the “memory” of a computer.12 This language suggests that images of data temporarily stored in RAM do not constitute “copies.”13 Several cases, however, have held to the contrary. The leading case is MAI Systems Corp. v. Peak Computer, Inc., 14 which held that loading an operating system into RAM for maintenance purposes by an unlicensed third party maintenance organization created an illegal “copy” of the program fixed in RAM.15 When the MAI decision first came down, it was unclear whether that decision would support a legal principle that any storage of a copyrighted work in RAM, no matter how transiently, constituted a “copy” within the purview of copyright law, for the Ninth Circuit’s opinion in MAI seemed somewhat qualified. The court in MAI noted that the “copy” of the operating system was stored in RAM for several minutes (rather than only a few seconds). In addition, the court emphasized that while in RAM, output of the program was viewed by the user, which confirmed the conclusion that the RAM “copy” was capable of being perceived with the aid of a machine: [B]y showing that Peak loads the software into the RAM and is then able to view the system error log and diagnose the problem with the computer, MAI has adequately shown that the representation created in the RAM is “sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration.”16 In addition, a decision from the Seventh Circuit handed down shortly after MAI, NLFC, Inc. v. Devcom Mid-Am., Inc., 17 although somewhat unclear on both the facts involved in the 11 17 U.S.C. § 101 (definition of “fixed in a tangible medium of expression”). 12 H.R. Rep. No. 94-1476, at 53 (1976), reprinted in U.S.C.C.A.N. 5659, 5666. 13 But see R. Nimmer, Information Law ¶ 4.02[2], at 4-6 (2001) (“This language refers to subject matter protection and not whether particular acts create an infringing copy. The exclusion of transient works refers to the work itself, not a copy. It presumes that there was no copy of the work other than the transient display or memory.”) 14 991 F.2d 511 (9th Cir. 1993), cert. dismissed, 114 S. Ct. 672 (1994). 15 Id. at 518. 16 991 F.2d at 518. 17 45 F.3d 231 (7th Cir. 1995). - 24 - case and whether the court really understood the issue, contains language that may suggest that merely proving that the defendant has remotely accessed the plaintiff’s software through a terminal emulation program is not sufficient to prove that a “copy” has been made.18 Moreover, an earlier Ninth Circuit decision in the case of Lewis Galoob Toys, Inc. v. Nintendo of America, Inc.19 implied that an image of data stored in RAM may not qualify as a “copy.” At issue in that case was whether a device that altered certain bytes of data of a video game “on the fly” as such information passed through RAM created an infringing derivative work. The court held that it did not, because although a derivative work need not be fixed, it must have some “form” or “permanence,” which were lacking in the enhanced displays created by the device. The court stated, however, that even if a derivative work did have to be fixed, the changes in the displayed images wrought on the fly by the accused device did not constitute a fixation because the transitory images it created were not “embodied” in any form. 18 Id. at 236. 19 964 F.2d 965 (9th Cir. 1992). - 25 - Notwithstanding these earlier decisions, however, a great many courts have now followed MAI, 20 and some earlier decisions also support its conclusion.21 Although the opinion in one of these decisions suggests that only copies that exist for several minutes should constitute a “copy” 20 See, e.g., Jeehoon Park v. Skidmore, Owings & Merrill LLP, 2019 U.S. Dist. LEXIS 171566 at *20 (S.D.N.Y. Sept. 30, 2019) (copying within the scope of the Copyright Act occurs when a file is accessed from a computer’s hard drive and loaded into RAM); Take-Two Interactive Software, Inc. v. Zipperer, 2018 U.S. Dist. LEXIS 151169 at *2 (S.D.N.Y. Aug. 16, 2018) (same); VBConversions LLC v. Gulf Coast Ventures, Inc., 2016 U.S Dist. LEXIS 105760 at *11 (C.D. Cal. Aug. 10, 2016) (citing MAI for the proposition that copying for purposes of copyright law occurs when a computer program is transferred from a permanent storage device to a computer’s RAM); Live Face on Web, LLC v. The Control Group Media, 150 F. Supp. 3d 489, 498 (E.D. Penn. 2015) (under MAI, a visitor to one of the defendants’ web pages featuring the plaintiff’s software would download a copy into his computer’s RAM, thereby infringing the copyright on the software); Soc’y of Holy Transfiguration Monastery, Inc. v. Gregory, 689 F.3d 29, 55 (1st Cir. 2012) (a computer makes a copy of a program when it transfers the program from a third party’s computer or other storage device into its own memory); Carson v. Verismart Software, 2012 U.S. Dist. LEXIS 4166 at *8-9 (N.D. Cal. Mar. 27, 2012) (pleading alleging that defendants were “using” plaintiff’s software without authorization was sufficient to state a copyright claim because the software had to be loaded into RAM to run, which constitutes the making of a fixed copy under MAI); Costar Realty Information, Inc. v. Field, 2010 U.S. Dist. LEXIS 135016 at *19 (D. Md. Dec. 20, 2010) (copies of web pages stored automatically in a computer’s cache or RAM upon a viewing of the web page fall within the definition of “copy”); DocMagic, Inc. v. Ellie Mae, Inc., 745 F. Supp. 2d 1148 (N.D. Cal. 2010) (unauthorized loading of software into RAM constitutes an act of copying and thus of infringement); Apple, Inc. v. Psystar Corp., 673 F. Supp. 2d 931, 935 (N.D. Cal. 2009) (turning on computers that loaded into RAM copies of Apple’s Mac OS X operating system containing unauthorized modifications constitute direct infringement of Apple’s reproduction right); Quantum Sys. Integrators, Inc. v. Sprint Nextel Corp., 2009 U.S. App. LEXIS 14766 at *18-19 (4th Cir. July 7, 2009) (loading of software into RAM from unauthorized copies on hard disk was sufficiently fixed for purposes of copyright infringement); SimplexGrinnell LP v. Integrated Sys. & Power, Inc., 2009 U.S. Dist. LEXIS 30657 at *42 (S.D.N.Y. Apr. 8, 2009) (embodiment requirement is satisfied when a program is loaded for use into a computer’s RAM and the duration requirement is satisfied when the program remains in RAM for several minutes or until the computer is shut off); MDY Industries, LLC v. Blizzard Entertainment, Inc., 2008 U.S. Dist. LEXIS 53988 (D. Ariz. July 14, 2008) (under MAI, copying software into RAM constitutes making a “copy” within the purview of copyright law, so that if a person is not authorized by the copyright holder through a license or by law (e.g. Section 117) to copy the software to RAM, the person commits copyright infringement when using the software in an unauthorized way); Airframe Sys., Inc. v. Raytheon Co., 520 F. Supp. 2d 258, 267 (D. Mass. 2007), aff’d, 601 F.3d 9 (1st Cir. 2010) (with regard to software, an act of copying sufficient to violate the Copyright Act occurs each time the software is run); Ticketmaster L.L.C. v. RMG Technologies, Inc., 507 F. Supp. 2d 1096, 1005 (C.D. Cal. 2007) (copies of web pages stored in a computer’s cache or RAM upon a viewing of the web page fall within the Copyright Act’s definition of a “copy”); Storage Technology Corp. v. Custom Hardware Engineering & Consulting, Inc., 2004 U.S. Dist. LEXIS 12391 at *11-12 (D. Mass. July 2, 2004) (unauthorized copying of a program into RAM for use of the program infringes the copyright in the program); Lowry’s Reports, Inc. v. Legg Mason, Inc., 271 F. Supp. 2d 737, 745 (D. Md. 2003) (“Unauthorized electronic transmission of copyrighted text, from the memory of one computer into the memory of another, creates an infringing ‘copy’ under the Copyright Act.”); Stenograph L.L.C. v. Bossard Assocs., 144 F.3d 96 (D.C. Cir. 1998) (holding that an infringing copy of a computer program was made when that program was loaded into RAM upon boot up and used for its principal purposes); Triad Sys. v. Southeastern Express Co., 64 F.3d 1330 (9th Cir. 1995), cert. denied, 116 S. Ct. 1015 (1996); Intellectual Reserve, Inc. v. Utah Lighthouse Ministry, Inc., 53 U.S.P.Q.2d 1425 (D. Utah 1999); Tiffany Design, Inc. v. Reno-Tahoe Specialty, Inc., 55 F. Supp. 1113, 1121 (D. Nev. 1999) (“the digitization or input of any copyrighted material, whether it be computer code or visual imagery, may support a finding of infringement notwithstanding only the briefest of existence in a computer’s RAM”); Marobie-FL Inc. v. National Association of Fire Equipment Distributors, 45 U.S.P.Q.2d 1236 (N.D. Ill. 1997); Advanced Computer Servs. v. MAI Sys., 845 F. Supp. 356 (E.D. Va. 1994); see also 2 M. Nimmer & D. Nimmer, Nimmer on Copyright § 8.08[A][1], at 8-114 (1999) (suggesting that RAM copies are fixed). - 26 - within the purview of copyright law,22 the others appear not to focus on how transitorily an image may be stored in RAM in ruling that such an image constitutes a “copy” for purposes of copyright law. One of these decisions, Intellectual Reserve, Inc. v. Utah Lighthouse Ministry, Inc., 23 was the first decision to focus on whether the act of browsing on the Internet involves the creation of “copies” that implicate the copyright owner’s rights. In that case, the court, citing the MAI decision, flatly stated, “When a person browses a website, and by so doing displays the [copyrighted material], a copy of the [copyrighted material] is made in the computer’s random access memory (RAM), to permit viewing of the material. And in making a copy, even a temporary one, the person who browsed infringes the copyright.”24 This decision, although quite direct in its holding, appears to address only the final “copy” that is made in the RAM of a Web surfer’s computer in conjunction with viewing a Web page through a browser. It does not address the trickier issue of whether whole or partial interim copies made in RAM of node computers during the course of transmission through the Internet also constitute “copies” within the purview of a copyright owner’s copyright rights. However, a 2004 decision from the Fourth Circuit, CoStar v. Loopnet, 25 held that transient copies made by an OSP acting merely as a conduit to transmit information at the instigation of others does not create fixed copies sufficient to make it a direct infringer of copyright. “While temporary electronic copies may be made in this transmission process, they would appear not to be ‘fixed’ in the sense that they are ‘of more than transitory duration,’ and the ISP therefore would not be a ‘copier’ to make it directly liable under the Copyright Act.”26 The court drew a distinction between the final copy of a work made in the RAM of the ultimate user’s computer, and the transient copies made by an OSP in the course of transmitting such copies: In concluding that an ISP has not itself fixed a copy in its system of more than transitory duration when it provides an Internet hosting service to its subscribers, we do not hold that a computer owner who downloads copyrighted software onto a computer cannot infringe the software’s copyright. See, e.g., MAI Systems Corp. v. Peak Computer, Inc., 991 F.2d 511, 518-19 (9th Cir. 1993). When the computer owner downloads copyrighted software, it possesses the software, which then functions in the service of the computer or its owner, and the copying 21 See Vault Corp. v. Quaid Software Ltd., 847 F.2d 255, 260 (5th Cir. 1988) (“the act of loading a program from a medium of storage into a computer’s memory creates a copy of the program”); Apple Computer, Inc. v. Formula Int’l, 594 F. Supp. 617, 621 (C.D. Cal. 1984) (noting that copying a program into RAM creates a fixation, albeit a temporary one); Telerate Sys. v. Caro, 8 U.S.P.Q.2d 1740 (S.D.N.Y. 1988) (holding that the receipt of data in a local computer constituted an infringing copy). 22 Advanced Computer Services v. MAI Systems, 845 F. Supp. 356, 363 (E.D. Va. 1994). 23 53 U.S.P.Q.2d 1425 (D. Utah 1999). 24 Id. at 1428. 25 373 F.3d 544 (4th Cir. 2004). 26 Id. at 551. - 27 - is no longer of a transitory nature. See, e.g., Vault Corp. v. Quaid Software, Ltd., 847 F.2d 255, 260 (5th Cir. 1988). “Transitory duration” is thus both a qualitative and quantitative characterization. It is quantitative insofar as it describes the period during which the function occurs, and it is qualitative in the sense that it describes the status of transition. Thus, when the copyrighted software is downloaded onto the computer, because it may be used to serve the computer or the computer owner, it no longer remains transitory. This, however, is unlike an ISP, which provides a system that automatically receives a subscriber’s infringing material and transmits it to the Internet at the instigation of the subscriber.27 A 2008 decision of the Second Circuit, The Cartoon Network LP v. CSC Holdings, Inc., 28 addressed the issue of RAM copying in considerable detail, ruling that buffer copies in RAM made by Cablevision Systems Corp. in the course of converting channels of cable programming from the head end feed into a format suitable for storage of individual programs by a network digital video recording service upon customer demand were not fixed for sufficient duration to constitute “copies.”29 Cablevision made the buffer copies in conjunction with offering its “Remote Storage” Digital Video Recorder (RS-DVR) service that enabled Cablevision customers to record copies of particular programs, like a normal DVR, but to store the recorded programs on Cablevision’s servers rather than on a DVR device at their homes. Cablevision created buffer copies, one small piece at a time, of the head end programming in two buffers – a primary ingest buffer and a Broadband Media Router (BMR) buffer – even if no customer requested that a copy of particular programming be stored on its behalf in the RS-DVR service. The primary ingest buffer held no more than 0.1 seconds of each incoming channel’s programming at any moment. The data buffer in the BMR held no more than 1.2 seconds of programming at any time. The plaintiffs argued that these buffer copies made Cablevision a direct infringer of their copyrights.30 The lower court found Cablevision a direct infringer largely in reliance on MAI and cases following it.31 The Second Circuit, however, reversed. The court noted that to satisfy the statutory definition of “copies,” two requirements must be met – an “embodiment” requirement (embodiment in a tangible medium from which it can be perceived or reproduced) and a “duration” requirement (embodiment for a period of more than transitory duration). The Second Circuit found that the district court had mistakenly limited its analysis to the embodiment requirement, and that its reliance on MAI and cases following it was misplaced.32 In general, those cases conclude that an alleged copy is fixed without addressing the duration requirement; it does not follow, however, that those cases assume, 27 Id. 28 536 F.3d 121 (2d Cir. 2008), cert. denied sub nom. CNN, Inc. v. CSC Holdings, Inc., 557 U.S. 946 (2009). 29 Id. at 129-30. 30 Id. at 123-24, 127. 31 Twentieth Century Fox Film Corp. v. Cablevision Sys. Corp., 478 F. Supp. 2d 607, 621-22 (S.D.N.Y. 2007). 32 Cartoon Network, 536 F.3d 121 at 127. - 28 - much less establish, that such a requirement does not exist. Indeed, the duration requirement, by itself, was not at issue in MAI Systems and its progeny.… Accordingly, we construe MAI Systems and its progeny as holding that loading a program into a computer’s RAM can result in copying that program. We do not read MAI Systems as holding that, as a matter of law, loading a program into a form of RAM always results in copying.33 Turning to the facts of the case at hand, the Second Circuit ruled that, although the embodiment requirement was satisfied by the buffers because the copyrighted works could be copied from them,34 the duration requirement had not been satisfied. The court noted that no bit of data remained in any buffer for more than a fleeting 1.2 seconds, unlike the data in cases like MAI, which remained embodied in the computer’s RAM until the user turned the computer off.35 “While our inquiry is necessarily fact-specific, and other factors not present here may alter the duration analysis significantly, these facts strongly suggest that the works in this case are embodied in the buffer for only a ‘transitory’ period, thus failing the duration requirement.”36 Accordingly, the acts of buffering in the operation the RS-DVR did not create “copies” for which Cablevision could have direct liability.37 The court in Costar Realty Information, Inc. v. Field38 ruled that an allegation that the defendant accessed a password-protected database without authorization, which contained the plaintiff’s copyrighted photographic images, raised a genuine dispute of material fact as to whether the defendant engaged in direct copyright infringement when he viewed the copyrighted work on a website that he did not have proper authorization to enter.39 Citing the Intellectual Reserve case, the court ruled that “simply browsing a website that contains copyrighted material is sufficient to constitute copyright infringement because a copy of the work is made in the computer’s RAM to enable the images to display on the computer monitor.”40 33 Id. 34 Id. at 129. “The result might be different if only a single second of a much longer work was placed in the buffer in isolation. In such a situation, it might be reasonable to conclude that only a minuscule portion of a work, rather than ‘a work’ was embodied in the buffer. Here, however, where every second of an entire work is placed, one second at a time, in the buffer, we conclude that the work is embodied in the buffer.” Id. 35 Id. 36 Id. 37 Id. at 130. 38 2010 U.S. Dist. LEXIS 86567 (D. Md. Aug. 23, 2010). 39 Id. at *37-38. 40 Id. at *38 - 29 - 3. The WIPO Treaties & the European Copyright Directive Are Unclear With Respect to Interim “Copies” The language of two copyright treaties adopted during 1996 by the World Intellectual Property Organization (WIPO)41 leaves open the issue of whether transitory images of data stored in RAM constitute “copies.”42 (a) Introduction to the WIPO Treaties & the European Copyright Directive The WIPO treaties were adopted as a result of the Diplomatic Conference on Certain Copyright and Neighboring Rights Questions hosted by WIPO in Geneva on December 2-20, 1996. More than 700 delegates from approximately 160 countries attended this Conference, which was aimed at tightening international copyright law to respond to issues arising from worldwide use of the Internet. The Conference was also designed to bring existing legislation on copyrights more in line with the provisions of the Trade Related Intellectual Property (TRIPS) sections of the Uruguay Round trade agreement, which in 1994 set up the World Trade Organization (WTO).43 Three new treaties were considered, only two of which were adopted: the “WIPO Copyright Treaty” and the “WIPO Performances and Phonograms Treaty.”44 The WIPO Copyright Treaty strengthens the Berne Convention for the Protection of Literary and Artistic Works (the “Berne Convention”),45 established in 1886, which was the first international copyright treaty. The WIPO Performances and Phonograms Treaty strengthens the International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations, completed in Rome in 1961 (the “Rome Convention”).46 Each of the treaties required 30 nations to accede to it before it would enter into force. On Dec. 5, 2001, Gabon became the 30th nation to accede to the WIPO Copyright Treaty, and on Feb. 20, 2002, Honduras became the 30th nation to accede to the WIPO Performances and Phonograms Treaty. Accordingly, each of those treaties entered into force ninety days thereafter, 41 WIPO is a United Nations organization which handles questions of copyrights and trademarks. 42 The treaties enter into force three months after 30 instruments of ratification or accession by member States have been deposited with the Director General of WIPO. 43 Agreement on Trade-Related Aspects of Intellectual Property Rights, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1C, Legal Instruments – Results of the Uruguay Round vol. 31; 33 I.L.M. 81 (1994). 44 The proposed WIPO Treaty on Intellectual Property in Respect of Databases generated huge controversy, and was not adopted at the Conference. “WIPO Delegates Agree on Two Treaties,” 2 BNA’s Electronic Info. Pol’y & L. Rep. 22, 22 (1997). 45 Berne Convention for the Protection of Literary and Artistic Works, Sept. 9, 1886, 828 U.N.T.S. 221. 46 International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations, Oct. 26, 1961, 496 U.N.T.X. 43. - 30 - on March 6, 2002 and May 20, 2002, respectively.47 The treaties are not self-executing under United States law, and implementing legislation will have to be passed by Congress. The two adopted treaties will effect important substantive changes in international copyright law that have potentially far reaching implications for the Internet, and the relevant provisions of these treaties will be discussed throughout this paper. The legislative history to the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty took the form of several “Agreed Statements.” Under the Vienna Convention, an Agreed Statement is evidence of the scope and meaning of the treaty language.48 Relevant portions of the Agreed Statements will also be discussed in this paper. Each of the signatories to the WIPO treaties was required to adopt implementing legislation to conform to the requirements of the treaties. The scope of legislation required in any particular country depends upon the substantive extent of that country’s copyright law existing at the time of the treaty, as well the country’s own views concerning whether its existing laws already conform to the requirements of the treaties. As discussed in detail below, WIPO implementation legislation in the United States took a largely minimalist view of the changes to United States copyright law required to conform to the WIPO treaties. It is curious that all the implementing legislation introduced in Congress implicitly took the position that U.S. law already contains most of the rights required under the WIPO treaties, in view of the fact that, as analyzed below, much of the language describing mandatory copyright rights in the WIPO treaties appears to go beyond the correlative rights in current United States law or to set up new rights entirely. The possibility that other countries would adopt legislation implementing the WIPO treaty rights in their seemingly broader form raises the prospect of varying scopes of rights in different countries, a situation that the WIPO treaties were intended to avoid in the first place.49 In contrast to the United States implementing legislation, the European Commission’s “European Copyright Directive on the Harmonization of Certain Aspects of Copyright and Related Rights in the Information Society”50 to update and harmonize member state copyright laws (which will be referred to herein as the “European Copyright Directive”) seems to take a more expansive view, although individual member states are free to interpret the extent to which their own copyright laws already conform to the dictates of the European Copyright Directive in adopting legislation in response to it.51 The WIPO implementation legislation in the United 47 “WIPO Copyright Treaty Enters Into Force As Gabon Becomes 30th Nation to Accede,” BNA’s Electronic Commerce & Law Report (Dec. 12, 2001) at 1224; “U.N. Announces Music Piracy Pact” (Feb. 21, 2002), available as of Feb. 21, 2002 at http://news.com.com/2100-1023-842169.html. 48 Vienna Convention on the Law of Treaties, May 23, 1969, art. 31(2), 1155 U.N.T.S. 331. 49 WIPO Copyright Treaty, Preamble, at 4; WIPO Performances and Phonograms Treaty, Preamble, at 22. 50 The text of the European Copyright Directive may be found at http://europa.eu.int/servlet/portail/RenderServlet?search=DocNumber&lg=en&nb_docs=25&domain=Legislati on&coll=&in_force=NO&an_doc=2001&nu_doc=29&type_doc=Directive (available as of January 1, 2002). 51 The European Copyright Directive was first circulated for comments among European legal experts. It was then officially published at the end of 1997 for a more public debate of its provisions. The European Parliament - 31 - States and the European Copyright Directive will be discussed at length throughout this paper as they relate to the various issues treated herein. (b) The WIPO Copyright Treaty Article 7 of an earlier draft of the WIPO Copyright Treaty would apparently have adopted the approach of MAI to the question of whether RAM copies fall within the reproduction right of the copyright holder.52 The proposed Article 7(1) provided: (1) The exclusive right accorded to authors of literary and artistic works in Article 9(1) of the Berne Convention of authorizing the reproduction of their works, in any manner or form, includes direct and indirect reproduction of their works, whether permanent or temporary. The reference to “temporary” reproductions would have seemed to cover copies in RAM. The reference to “indirect” reproductions, particularly when coupled with the inclusion of approved a final draft of the Directive on February 14, 2001. The European Commission, acting through the European Union ministers, accepted the final draft of the Directive on April 9, 2001. 52 The WIPO Copyright Treaty contains a number of important provisions relevant to the Internet that are not discussed elsewhere in this paper. Article 2 codifies the idea/expression dichotomy of copyright law: “Copyright protection extends to expressions and not to ideas, procedures, methods of operation or mathematical concepts as such.” Article 4 expressly extends copyright protection to computer programs in all forms as literary works: “Computer programs are protected as literary works within the meaning of Article 2 of the Berne Convention. Such protection applies to computer programs, whatever may be the mode or form of their expression.” Article 5 adopts the approach of the Supreme Court’s decision in Feist Publications, Inc. v. Rural Telephone Serv., 499 U.S. 340 (1991), which held that only the selection or arrangement of a compilation of facts such as a database, and not the facts themselves, can be protected under copyright. Article 5 provides: “Compilations of data or other material, in any form, which by reason of the selection or arrangement of their contents constitute intellectual creations, are protected as such. This protection does not extend to the data or the material itself and is without prejudice to any copyright subsisting in the data or material contained in the compilation.” The proposed WIPO Treaty on Intellectual Property in Respect of Databases would have extended protection to the information itself in a database where such database was the fruit of substantial labor to compile. Basic Proposal for the Substantive Provisions of the Treaty on Intellectual Property in Respect of Databases to be Considered by the Diplomatic Conference, art. 1(1), WIPO Doc. CRNR/DC/6 (Aug. 30, 1996) . The controversy generated by this Treaty precluded its adoption by WIPO. Article 7(1) provides that authors of computer programs, cinematographic works, and works embodied in phonograms shall enjoy the exclusive right of authorizing commercial rental to the public of the originals or copies of their works. Under Article 7(2), this rental right does not apply “in the case of computer programs where the program itself is not the essential object of the rental” or “in the case of cinematographic works, unless such commercial rental has led to widespread copying of such works materially impairing the exclusive right of reproduction.” The Agreed Statement for Articles 6 and 7 notes that the expressions “copies” and “original and copies,” being subject to the right of rental, “refer exclusively to fixed copies that can be put into circulation as tangible copies.” Article 6 of an earlier draft of the treaty would have required Contracting Parties to abolish non-voluntary broadcasting licenses within seven years of ratifying or acceding to the Treaty. This Article was deleted in the final adopted version. - 32 - “temporary” reproductions, might have been broad enough to cover interim, partial reproductions in RAM in the course of transmission of a work through the Internet, as well as complete copies of a work made in RAM and/or on a hard disk at the receiving computer. In addition, proposed Article 7(2) of the treaty seemed to recognize the possibility that the language of Article 7(1) might be read to cover interim, partial reproductions during transmission, for it would have allowed signatory members (referred to as “Contracting Parties” in the treaty) to limit the right of reproduction in those instances: (2) Subject to the conditions under, and without prejudice to the scope of applicability of, Article 9(2) of the Berne Convention, it shall be a matter for legislation in Contracting Parties to limit the right of reproduction in cases where a temporary reproduction has the sole purpose of making the work perceptible or where a temporary reproduction is of a transient or incidental nature, provided that such reproduction takes place in the course of use of the work that is authorized by the author or permitted by law in accordance with the Berne Convention and this Treaty.53 53 Although this provision apparently was designed to ameliorate the potential mischief that might result from deeming all interim copies of a work in the course of transmission to be within the copyright owner’s rights, it suffered from a number of potential problems. First, it would have left the issue up to the individual Contracting Parties whether to legislate exemptions. Thus, some Contracting Parties could have legislated such exemptions, while others did not, and the scope of the exemptions could have varied from country to country. As a result, whether interim copies during the course of transmission constitute infringement could have turned on the countries through which the transmission path passes, which is arbitrary under the current transmission technology of the Internet. Second, Article 7(2) stated that the exemptions would apply only to transient or incidental reproductions taking place in the course of an authorized use of a work. Thus, if the transmission itself is unauthorized, the exemptions would not have applied, and there could still have been potential liability for the interim reproductions. Yet the operators of the node computers in which the interim copies are made would have no way of knowing whether any particular packet passing through the node is part of an authorized transmission. Article 7(2) therefore was flawed. Article 10(1) of the adopted version affords a more generic vehicle for the adoption of exemptions or exceptions to rights conferred in the Treaty: “Contracting Parties may, in their national legislation, provide for limitations of or exceptions to the rights granted to authors of literary and artistic works under this Treaty to an extent consistent with exceptions or limitations provided for in the Berne Convention in certain special cases that do not conflict with a normal exploitation of the work and do not unreasonably prejudice the legitimate interests of the author.” The requirement that exceptions “not unreasonably prejudice the legitimate interests of the author” provides little guidance as to where the boundaries should lie around exceptions that Contracting Parties may wish to adopt in implementing legislation. The Agreed Statement concerning Article 10 does nothing to clarify the uncertainty: “It is understood that the provisions of Article 10 permit Contracting Parties to carry forward and appropriately extend into the digital environment limitations and exceptions in their national laws which have been considered acceptable under the Berne Convention. Similarly, these provisions should be understood to permit Contracting Parties to devise new exceptions and limitations that are appropriate in the digital network environment.” - 33 - The proposed Article 7, and the subject of interim transmission copies in general, generated a lot of controversy at the Conference. Telecommunications companies and Internet providers particularly objected to Article 7 because they feared that protection for temporary copying would impose liability for the interim copying that inherently occurs in computer networks. On the other hand, content providers such as the software, publishing and sound recording industries, opposed any open-ended approach that would permit all temporary copying.54 To resolve the controversy, the proposed Article 7 was ultimately simply deleted entirely from the adopted version of the treaty.55 The Agreed Statement pertaining to the right of reproduction (Previous Article 7) provides: The reproduction right, as set out in Article 9 of the Berne Convention, and the exceptions permitted thereunder,56 fully apply in the digital environment, in particular to the use of works in digital form. It is understood that the storage of a protected work in digital form in an electronic medium constitutes a reproduction within the meaning of Article 9 of the Berne Convention. The Assistant Secretary of Commerce and Commissioner of Patents and Trademarks at the time, Bruce Lehman, who headed the U.S. delegation to the Conference, stated at the end of the Conference that the Agreed Statement was intended to make clear that the reproduction right includes the right to make digital copies, but also that certain copying, e.g., for temporary digital storage, will be permitted. Commissioner Lehman further expressed the view that the treaty language is broad enough to permit domestic legislation that would remove any liability on the part of network providers where the copying is simply the result of their functioning as a conduit for network services.57 However, the Agreed Statement itself does nothing more than reference Article 9 of the Berne Convention, which of course was adopted long before digital copies were an issue under copyright law, and makes no explicit reference to “temporary digital storage.” In addition, the phrase “storage of a protected work in digital form in an electronic medium” could potentially include temporary digital storage in a node computer during transmission. It is therefore difficult to agree with Commissioner Lehman that the Agreed Statement makes anything “clear.” Rather, the Agreed Statement seems to leave virtually open ended the question of whether temporary images in RAM will be treated as falling within the copyright owner’s right of reproduction. The uncertainty surrounding the scope of the reproduction right in a digital environment that, at least early on, seemed to divide U.S. courts therefore appears destined to 54 “WIPO Delegates Agree on Two Treaties,” 2 BNA’s Electronic Info. Pol’y & L. Rep. 22, 22 (1997). 55 Id. 56 Article 9(2) of the Berne Convention provides, “It shall be a matter for legislation in the countries of the Union to permit the reproduction of such works in certain special cases, provided that such reproduction does not conflict with a normal exploitation of the work and does not unreasonably prejudice the legitimate interests of the author.” 57 “WIPO Delegates Agree on Two Treaties,” 2 BNA’s Electronic Info. Pol’y & L. Rep. 22, 22-23 (1997). - 34 - replicate itself in the international arena. The uncertainty is heightened by the fact that Article 9 of the Berne Convention allows signatories to adopt certain exceptions to the reproduction right, raising the prospect of inconsistent exceptions being adopted from country to country. As a result, whether interim copies made during the course of transmission constitute infringement may turn on the countries through which the transmission path passes, which is arbitrary under the current transmission technology of the Internet. The issue ignited debate in the United States in connection with the federal legislation to implement the treaty. (c) The WIPO Performances and Phonograms Treaty Curiously, despite the focus on and ultimate removal of the proposed Article 7 of the WIPO Copyright Treaty, Article 7 as adopted in the WIPO Performances and Phonograms Treaty appears to come closer to adopting the approach of MAI. Article 7 gives performers the exclusive right of “authorizing the direct or indirect reproduction of their performances fixed in phonograms” (emphasis added). As originally proposed, Article 7 contained language even closer to the MAI logic, for it expressed the reproduction right of performers as one of “authorizing the direct or indirect reproduction, whether permanent or temporary, of their performances fixed in phonograms” (emphasis added). The use of the phrase “permanent or temporary” would more strongly have suggested that temporary interim reproductions of performances would be within the performer’s right of reproduction. In addition, Article 7(2) in an earlier draft was also deleted, which made reference to transient copies as follows: Subject to the conditions under, and without prejudice to the scope of applicability of, Article 19(2), it shall be a matter for legislation in Contracting Parties to limit the right of reproduction in cases where a temporary reproduction has the sole purpose of making the fixed performance perceptible or where a temporary reproduction is of a transient or incidental nature, provided that such reproduction takes place in the course of use of the fixed performance that is authorized by the performer or permitted by law in accordance with this Treaty. The Agreed Statement that was issued with respect to the right of reproduction in the WIPO Performances and Phonograms Treaty is very similar to the Agreed Statement on the same subject that was issued with the WIPO Copyright Treaty. The Agreed Statement issued with the WIPO Performances and Phonograms Treaty provides: The reproduction right, as set out in Articles 7 and 11, and the exceptions permitted thereunder through Article 16, fully apply in the digital environment, in particular to the use of performances and phonograms in digital form. It is understood that the storage of a protected performance or phonogram in digital form in an electronic medium constitutes a reproduction within the meaning of these Articles. - 35 - Thus, the Agreed Statement for the WIPO Performances and Phonograms Treaty contains the same ambiguities noted above with respect to the Agreed Statement for the WIPO Copyright Treaty. Similar to Article 7, Article 11 gives producers of phonograms the “exclusive right of authorizing the direct or indirect reproduction of their phonograms, in any manner or form.” As in the case of Article 7, an earlier proposed version of Article 11 contained the phrase “whether permanent or temporary,” but this phrase was deleted in the final adopted version.58 Both Articles 7 and 11 define the rights recited therein in terms of “phonograms.” “Phonogram” is defined in Article 2(b) as any “fixation” of the sounds of a performance or of other sounds other than incorporated in a cinematographic or other audiovisual work. “Fixation” is defined broadly in Article 2(c) as “the embodiment of sounds or the representations thereof, from which they can be perceived, reproduced or communicated through a device.” Storage in RAM would seem to satisfy this definition of fixation. Thus, any unauthorized transmission of a performance, or of the sounds embodied in a phonogram fixing such performance, to RAM memory would potentially violate the rights of both the owner of the performance and of the phonogram.59 58 Article 11(2) in an earlier draft, similar to the proposed and later deleted Article 7(2), was also deleted. Article 11(2) would have provided: “Subject to the conditions under, and without prejudice to the scope of applicability of, Article 19(2), it shall be a matter for legislation in Contracting Parties to limit the right of reproduction in cases where a temporary reproduction has the sole purpose of making the phonogram audible or where a temporary reproduction is of a transient or incidental nature, provided that such reproduction takes place in the course of use of the phonogram that is authorized by the producer of the phonogram or permitted by law in accordance with this Treaty.” 59 The WIPO Performances and Phonograms Treaty contains a number of important provisions relevant to the Internet that are not discussed elsewhere in this paper. Article 4 requires Contracting Parties to afford national treatment to nationals of other Contracting Parties. Article 5(1) affords moral rights to performers: “Independently of a performer’s economic rights, and even after the transfer of those rights, the performer shall, as regards his live aural performances or performances fixed in phonograms, have the right to claim to be identified as the performer of his performances, except where omission is dictated by the manner of the use of the performance, and to object to any distortion, mutilation or other modification of his performances that would be prejudicial to his reputation.” A proposed Article 5(4), which was deleted in the final version, would have allowed any Contracting Party to declare in a notification deposited with the Director General of WIPO that it will not apply the provisions of Article 5. Article 6 grants performers the exclusive right of authorizing the broadcasting and communication to the public of their unfixed performances (except where the performance is already a broadcast performance) and the fixation of their unfixed performances. Articles 9 and 13 grant performers and producers of phonograms, respectively, the exclusive right of authorizing the commercial rental to the public of the original and copies of their performances fixed in phonograms and of their phonograms. Article 15 provides, “Performers and producers of phonograms shall enjoy the right to a single equitable remuneration for the direct or indirect use of phonograms published for commercial purposes for broadcasting or for any communication to the public.” The Agreed Statement for Article 15 provides: “It is understood that Article 15 does not represent a complete resolution of the level of rights of broadcasting and communication to the public that should be enjoyed by performers and phonogram producers in the digital age. Delegations were unable to achieve consensus on differing proposals for aspects of exclusivity to be provided in certain - 36 - Thus, the WIPO Performances and Phonograms Treaty replicates the same uncertainty as the WIPO Copyright Treaty with respect to the issue of whether transient “copies” of performances and phonograms will fall within the copyright owner’s right of reproduction.60 Indeed, the definition of the right of reproduction in Article 7 and Article 11 to include “direct or indirect” reproductions, together with the broad definition of “fixation” in Article 2(c), arguably adopt an approach that is closer to the MAI decision than the WIPO Copyright Treaty. 4. The Requirement of Volition for Direct Liability Even assuming the rationale of the MAI case and the provisions of the WIPO Treaties are applied to deem all reproductions during transmission of a work through the Internet to be “copies” within the copyright owner’s rights, a difficult issue arises as to who should be responsible for the making of such copies. Multiple actors may be potentially connected with a particular copy or copies of a work on the Internet, such as a work posted to a bulletin board service (BBS) – the original poster of the work, the BBS operator, the Online Service Provider (OSP) through which the BBS is offered, a user downloading a copy of the work from the BBS, and perhaps the operators of node computers through which a copy of the work may pass during the course of such downloading. Which one or more of these actors should be deemed to have made the copy or copies? The most difficult aspect of the issue of which actors should be liable for copies made in the course of the downloading, viewing or other transmission of a work through the Internet stems from the fact that many such copies will typically be made automatically. For example, “copies” of the work (in whole or in part) will automatically be made in the RAM (and possibly in temporary hard disk storage) of each interim node computer within the transmission path of the work through the Internet. And the modems on the initiating and receiving ends of the transmission will buffer the data to be transmitted. Internet search engine services may use “spiders” to “crawl” through the Internet and make copies in RAM of materials on websites in the course of creating an index of that material. circumstances or for rights to be provided without the possibility of reservations, and have therefore left the issue to future resolution.” Under Article 17(1), the term of protection to be granted to performers under the Treaty is at least 50 years from the end of the year in which the performance was fixed in a phonogram. Under Article 17(2), the term of protection to be granted to producers of phonograms under the Treaty is at least 50 years from the end of the year in which the phonogram was published, or failing such publication within 50 years from fixation of the phonogram, 50 years from the end of the year in which the fixation was made. 60 Article 16 affords a generic vehicle for the adoption of exemptions or exceptions to rights conferred in the Treaty. Article 16(1) provides that “Contracting Parties may, in their national legislation, provide for the same kinds of limitations or exceptions with regard to the protection of performers and producers of phonograms as they provide for in their national legislation, in connection with the protection of copyright in literary and artistic works.” Article 16(2) provides, however, similar to the WIPO Copyright Treaty, that “Contracting Parties shall confine any limitations of or exceptions to rights provided for in this Treaty to certain special cases which do not conflict with a normal exploitation of the phonogram and do not unreasonably prejudice the legitimate interests of the performer or of the producer of phonograms.” - 37 - Should a volitional act be required on the part of a third party to be liable for a copy made during transmission? If so, is a direct volitional act to cause the copy to be made required (as in the case of the original poster or the ultimate recipient of the copy), or is it sufficient if there was a volitional act in setting up the automatic process that ultimately causes the copy to be made (as in the case of the BBS operator, the OSP or the search engine service)? In view of the fact that copyright law has traditionally imposed a standard of strict liability for infringement,61 one could argue that a direct volitional act may not be required.62 In addition to copies made automatically on the Internet, many infringing copies may be made innocently. For example, one may innocently receive an e-mail message that infringes the copyright rights of another and print that message out. Or one may innocently encounter (and copy into the RAM of one’s computer or print out) infringing material in the course of browsing. Several cases have addressed the issue of direct liability on the part of OSPs, BBS operators, and others for infringement of the reproduction right by users of the service, and in particular how much of a volitional act is required for direct infringement liability:63 (a) The Netcom Case The well-known case of Religious Technology Center v. Netcom On-Line Communication Services64 refused to impose direct infringement liability on an OSP for copies made through its service, at least where the OSP had no knowledge of such infringements. In that case the plaintiffs sought to hold liable the OSP (Netcom) and the operator of a BBS which gained its Internet access through the OSP for postings of the plaintiffs’ copyrighted works on the bulletin board. The works in question were posted by an individual named Erlich65 to the BBS’s computer for use through Usenet.66 The BBS’s computer automatically briefly stored them. The OSP then automatically copied the posted works onto its computer and onto other computers on the Usenet. In accordance with usual Usenet procedures, Usenet servers maintained the posted works for a short period of time – eleven days on Netcom’s computer and 61 Religious Technology Center v. Netcom On-Line Communications Servs., 907 F. Supp. 1361, 1367 & n.10 (N.D. Cal. 1995); R. Nimmer, Information Law ¶ 4.06, at 4-25 (2001). Intent can, however, affect statutory damages to be awarded to the plaintiff. Netcom, 907 F. Supp. at 1367. 62 But cf. R. Nimmer, Information Law ¶ 4.06, at S4-50 (2001 Cum. Supp. No. 2) (“Although copyright is a strict liability statute, there should be some [sort] of volition or causation which is lacking where a defendant’s system is merely used to create a copy by a third party.”). 63 See also cases discussed in Section III.C.1 below pertaining to direct liability of online service providers. 64 907 F. Supp. 1361 (N.D. Cal. 1995). 65 In an earlier order, the court had entered a preliminary injunction against Erlich himself. 66 The Usenet is “a worldwide community of electronic BBSs that is closely associated with the Internet and with the Internet community. The messages in Usenet are organized into thousands of topical groups, or ‘Newsgroups’ .... As a Usenet user, you read and contribute (‘post’) to your local Usenet site. Each Usenet site distributes its users’ postings to other Usenet sites based on various implicit and explicit configuration settings, and in turn receives postings from other sites.” Daniel P. Dern, The Internet Guide for New Users 196-97 (1994). - 38 - three days on the BBS’s computer.67 The OSP neither created nor controlled the content of the information available to its subscribers, nor did it take any action after being told by the plaintiffs that Erlich had posted infringing messages through its system.68 The court cast the issue of direct liability as “whether possessors of computers are liable for incidental copies automatically made on their computers using their software as part of a process initiated by a third party.”69 The court distinguished MAI, noting that “unlike MAI, the mere fact that Netcom’s system incidentally makes temporary copies of plaintiffs’ works does not mean that Netcom has caused the copying. The court believes that Netcom’s act of designing or implementing a system that automatically and uniformly creates temporary copies of all data sent through it is not unlike that of the owner of a copying machine who lets the public make copies with it.”70 The court held that, absent any volitional act on the part of the OSP or the BBS operator other than the initial setting up of the system, the plaintiffs’ theory of liability, carried to its natural extreme, would lead to unreasonable liability: Although copyright is a strict liability statute, there should still be some element of volition or causation which is lacking where a defendant’s system is merely used to create a copy by a third party.71 Accordingly, the court refused to hold the OSP liable for direct infringement. The court also refused to hold the BBS operator liable for direct infringement. “[T]his court holds that the storage on a defendant’s system of infringing copies and retransmission to other servers is not a direct infringement by the BBS operator of the exclusive right to reproduce the work where such copies are uploaded by an infringing user.”72 The court further held that the warning of the presence of infringing material the plaintiffs had given did not alter the outcome with respect to direct infringement liability: Whether a defendant makes a direct copy that constitutes infringement cannot depend on whether it received a warning to delete the message. This distinction may be relevant to contributory infringement, however, where knowledge is an element.73 The result of the Netcom case with respect to liability for direct infringement for the transmission and intermediate storage of copyrighted materials by an OSP was codified in the 67 Netcom, 907 F. Supp. at 1367. 68 Id. at 1368. 69 Id. 70 Id. at 1369. 71 Id. at 1370. 72 Id. at 1370-71 (emphasis in original). 73 Id. at 1370. - 39 - first safe harbor for OSPs set forth in Section 512(a)(1) of the Digital Millennium Copyright Act,74 discussed in detail in Section III.C below. (b) The MAPHIA Case Another well-known case, Sega Enterprises Ltd. v. MAPHIA, 75 adopted the logic of the Netcom case and refused to hold a BBS and its system operator directly liable for the uploading and downloading of unauthorized copies of Sega’s video games, even though the defendants participated in encouraging the unauthorized copying, which was not true in Netcom. (As discussed below, the court did, however, find contributory liability.) The evidence established that the system operator had knowledge that the infringing activity was going on through the bulletin board, and indeed that he had specifically solicited the uploading of the games for downloading by users of the bulletin board.76 The system operator also sold video game “copiers,” known as “Super Magic Drives,” through the MAPHIA BBS, which enabled subscribers to the BBS to play games which had been downloaded from the BBS.77 In granting a motion by Sega seeking summary judgment and a permanent injunction, the court refused to impose direct liability for copyright infringement on the BBS and its system operator, Chad Sherman. The court cited the Netcom case for the proposition that, although copyright is a strict liability statute, there should be some element of volition or causation which is lacking where a defendant’s system is merely used to create a copy by a third party.78 The court further stated: While Sherman’s actions in this case are more participatory than those of the defendants in Netcom, the Court finds Netcom persuasive. 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 copier seller are more appropriately analyzed under contributory or vicarious liability theories. Therefore, because 74 H.R. Rep. No. 105-551 Part 1, at 11, 24 (1998). 75 948 F. Supp. 923 (N.D. Cal. 1996). 76 Id. at 928. 77 Id. at 929. The Super Magic Drive consisted of a connector which plugged into the video game console, a receptacle which accepted video game cartridges, a main unit having a RAM to store games, and a floppy disk drive. “A MAPHIA BBS user can download video programs through his or her computer onto a floppy disk and make copies with his or her computer or play those game programs through the adaptor drive. To play a downloaded game, the user places the floppy disk into the video game copier. The user can choose the ‘run program’ option and run the video game program from the floppy disk without a video game cartridge. The adaptor drive also allows the user to copy the contents of a game cartridge onto a floppy disk.” Id. 78 Id. at 932. - 40 - Sega has not shown that Sherman directly caused the copying, Sherman cannot be liable for direct infringement.79 (c) The Sabella Case Similarly, in Sega Enterprises Ltd. v. Sabella, 80 the court refused to hold a BBS operator liable for direct infringement of the reproduction right where there was no evidence that the operator did any unauthorized copying herself. The defendant, Sabella, was the system operator of a BBS called “The Sewer Line,” which contained a directory called “Genesis,” into which were uploaded and downloaded infringing copies of Sega’s video games by subscribers to the BBS. The defendant also sold copiers that enabled users to play Sega games directly from floppy disks without the need for a Sega game cartridge, and allowed purchasers of her copiers to download files from her BBS without charge for a certain time period. Although the court agreed that the defendant’s activities were more participatory than those of the defendant in Netcom, the court nevertheless found the Netcom court’s logic persuasive. “Sega has not shown that Sabella herself uploaded or downloaded the files, or directly caused such uploading or downloading to occur. The most Sega has shown is that Sabella should have known such activity was occurring, that she sold copiers that played games such as those on her BBS, and that she gave her copier customers downloading privileges on her BBS.”81 Citing Netcom, the court concluded that “whether Sabella knew her BBS users were