Lisa G

Mass Media Law

December 17, 2000

Internet copyright law: A fast-changing field

Copyright law as it applies to the Internet is a relatively new field. Court cases that have arisen recently are setting the groundwork for future law, as there is no great precedent in place for Internet copyright law. Some of the most important cases in this area are A & M Records, Inc. v. Napster, Inc. and 

Playboy Enterprises, Inc. v. Hardenburgh, Inc. In the last three years, Congress has passed several laws designed specifically to regulate copyright regarding electronic media like the Internet. However, due to the global nature of the Internet, enforcing these laws remains difficult for the U.S. Government.
In order to understand the nature of copyright law regarding the Internet, it is necessary to first examine the origins of copyright law. Historically, in the United States, the copyright power derives from Article I, Section 8 of the Constitution.1 Article I, Section 8 grants Congress the power to grant the monopoly of copyright and patent for a limited time period.1 According to Sheldon W. Halpern, a Professor of Law at The Ohio State University College of Law,

That represents an underlying compromise: We must have copyright protection presumably to facilitate the creative process. We must limit that protection so that the creative process can be further developed by building on the works of predecessors. And that way, Congress is to, in the constitutional words, "promote... Science and [the] useful Arts." 2

One of the most important pieces of legislation enacted by Congress since the Constitution is the 1976 Copyright Act. The act says "original work of authorship fixed in any tangible medium of expression" is protected by copyright.3 Fixation is the key to the attachment of the copyright. Material is considered fixed as soon as it is written down; formal registration with the government is not necessary to copyright information.
Rather than forbidding all copying, the act allows copies of original works to be made under certain circumstances and certain conditions, which are continually revised. The primary conditions for copying are listed under Sec. 107 of the 1976 Copyright Act, “Limitations on exclusive rights: Fair use.”4  The “fair use doctrine,” as it is sometimes referred to, is based on four factors: the nature of the copyrighted work, the purpose and character of the use, the amount used and degree of transformation, and the effect on the market for the original work. This doctrine was established to further the marketplace of ideas.4
As technology progresses, Congress has had to adapt copyright law to apply to television broadcasts, CD players, VCRs and most recently, the Internet.  What these various inventions have in common is that they are forms of media that either can be copied or facilitate copying. What makes the Internet unique is its ability to copy and distribute something millions of times with only the click of a mouse.

Where it affects things is in the area of what is a copy and what is a distribution. For the normal purpose of the Copyright Act, up until we had the Internet and digital copying, a copy, a distribution, meant very simply, "I have a copy of this work. I give it to you. I've now distributed it." Well, this is a zero-sum game. You have it. I don't. With the use of digital technology, I can give you a copy of what I have and I still have it. We need to adjust the Copyright Act to consider that. 2

The speed and ease of copying has also allegedly affected the perception of Internet users when they consider the seriousness of the copyright infringement they commit when distributing massive amounts of information on a global scale.2

When it's so easy to copy a song or a work of art that's posted on the Internet, and it's so easy to change it, and so easy to distribute this changed copy to the entire world, there is just not enough time in the process of infringing to think that you may be doing something that you ought not do. The total mindset to approaching someone else's creative efforts is different from what it was before the advent of digital technology in the creative process.2

The Supreme Court and Congress have been aiming to reform copyright law and to enact specific legislation regarding the Internet. In 1998, Congress passed the Digital Millenium Copyright Act (DMCA).5  The act covered topics such as “Online copyright infringement liability limitation,” “World Intellectual Property Organization (WIPO) treaties implementation,” “Computer maintenance or repair copyright exemption,” and “Protection of certain original designs.” 5
The DMCA makes various activities on the Internet illegal including the circumvention of copyright protection systems, such as watermarks or encryptions.11 Under the DMCA, it is also illegal to "remove or alter any copyright management information" from any protected work.12 “This means anyone who removes any information that identifies the copyrighted work, such as the title, author or name of the work, can be prosecuted.”9
Some critics argue that the 

DMCA is an example of how Congress makes its laws overly specific so that they cannot be applied to the general subject area.  Halpern, for example, argues,

If you look at the Digital Millenium Copyright Act (DMCA), you'll see that the longest section relates to specification definition for VCRs… Congress is keying to a very, very specific technology... What you have now in Congress, as exemplified by the (DMCA), is a group of very specialized interests with very specialized concerns fighting about minutiae.
The congressional response has been to try to accommodate those interests, so we get very specialized, overspecified legislation. The danger that we have now is that we will get congressional action relating more to the digital world, and to digitally created or digitally copied works, but it will be overspecified again...The reality of the world is that the technology has in fact overtaken the law.2 

Another law Congress passed specifically to address copyright on the Internet is the No Electronic Theft Act (NET Act). The act makes it a crime to willfully infringe a copyright for the purposes of commercial advantage or private financial gain, or by the reproduction or distribution, including by electronic means, during any 180-day period, of one or more copies or phonorecords of one or more copyrighted works, which have a total retail value of more than $1,000.8 The act punishes only those who willfully infringe a copyright and punishes those who benefit financially from the infringement.  The NET Act defines financial gain as the "receipt, or expectation of receipt, of anything of value, including the receipt of other copyrighted works."8
One type of copyright infringement that relates to the NET Act is the posting of copyrighted materials on fan Web sites without authorization from the copyright holder(s). Due to the requirement that a fan site creator must have willingly infringed a copyright, the creator may not violate the NET Act, even if the infringement is done for commercial gain or infringes copyrighted material worth more than $1,000. Willfulness is determined by a jury.

Although Congress enacted the NET Act to afford copyright owners more protection, this law is somewhat emasculated by the intent requirement. However, a court would likely find a fan site creator…willfully infringed because of the use of material from a mainstream copyrighted work (like a broadcast television series).9

The most prominent cases in this area are three cases involving Playboy Enterprises, which sued Web site creators for use of its copyrighted photos. One of the cases is Playboy Enterprises, Inc. v. Hardenburgh, Inc. In this case, a web site owner created an Internet computer billboard and scanned copyrighted photographs from Playboy magazine onto his fan site, where users could download them.10 The district court decided in favor of Playboy Enterprises, Inc. 

The court found the copyright owner's distribution right was violated the moment the defendant supplied unauthorized copies of a protected work to web site visitors. Thus, fan site creators who are not the copyright owners of posted material, but who allow copyrighted material to be downloaded or printed from their sites, violate the exclusive distribution right of the copyright owner and therefore can be held liable.9

The DMCA Act and NET Act are laws designed specifically to address copyrights involving electronic media like the Internet, but some experts say copyright holders still have the best protection under older laws. 

Legal protection will be afforded under these laws only when copyright laws such as DMCA and the NET Act require that copyrighted works take a very specific form… the 1976 Copyright Act may still provide the greatest level of protection against infringers of copyrighted material posted on the Internet. A fan site can very easily fall through the cracks of the NET Act and the DMCA.9

No matter the law, one factor that makes it difficult to apply to the Internet is that the law only applies in the United States, and the Internet is accessible around the globe. 

We have this view that American copyright law is the best thing; American law in anything is the best thing; and to hell with the rest of the world… We cannot continue simply to say that the American model is the way and the light and the only one because we don't have a border anymore. That's because of the Internet. Creative works are now available all over the world simultaneously. You cannot simply operate with local law.2

Though the United States Government may not be able to control copyright infringement in other countries directly, it is still working to punish it in its own. A recent case that called into question the illegality of contributory infringement is A & M Records, Inc. v. Napster, Inc. Napster, Inc. is an Internet start up that allows users to download MP3 music files for free. On Dec. 6, 1999, A & M Records, along with 17 other record companies, filed a complaint for “contributory and vicarious copyright infringement and unfair competition”6 against Napster, Inc. The United States District Court for the Northern District of California decided the case in favor of the record companies.

The defendant is hereby preliminarily enjoined from engaging in, or facilitating others in copying, downloading, uploading, transmitting, or distributing plaintiffs' copyrighted musical compositions and sound recordings, protected by either federal or state law, without express permission of the rights owner. 6

The issue at stake was broader than Napster’s involvement in MP3 distribution. “The matter before the court concerns the boundary between sharing and theft, personal use and the unauthorized worldwide distribution of copyrighted music and sound recordings,” 6 wrote Marilyn Hall Patel in her opinion for the court.
Whether Napster’s services constituted sharing or theft was a controversial aspect of the case not only for the judges but also for the nation watching. Cases involving MP3 distribution are still being debated today.  In early November, Napster, Inc. announced a deal with Bertelsmann, a global media company and owner of BMG music. The deal may involve charging Napster users $4.95 per month and giving artists a cut. If Napster, Inc. cooperates, Bertelsmann will withdraw from the music industry’s lawsuit against Napster, Inc. 7
Napster’s copyright infringement can be characterized as contributory infringement because the company’s software facilitated infringement by allowing users to transfer copyrighted files for free. To prevent such infringement from occurring, record companies and movie companies are allowing their media to be encrypted.  Encryption is the "deliberate scrambling of files so that only a sender and the reader with a key get intelligible versions."9  DVDs and some CDs are encrypted at present. The millions of Internet users who copy MP3 and other files may react if those files are encrypted. “I expect we are going to see an awful lot in the next few years as various interest groups start screaming with pain over the limitations of access imposed by encryption and the fear of liability resulting from any attempt to circumvent encryption,”2 Halpern said.
In Halpern’s opinion, copyright law for the Internet needs to be based on the fair use doctrine outlined in the 1976 Copyright Act. 

…Congress said that in enacting section 107 it did not intend in any way to change the prior law, (but) the fact is that the courts treat it as a codification… So fair use could very well be expanded to cover digital uses, but I think it has to start with a different analytic base. We can't simply go in and say, "Let's apply the four factors here to this situation and to this situation and to this situation." I think we have to look at the kinds of creative effort that we're seeing around us somewhat differently from the kinds of creative effort that motivated the Copyright Act in the first place.2



Works Cited

2. Halpern, S. (2000). Nies Memorial Lecture: Copyright law in the digital age: Malum in se and malum prohibitum. Marquette Intellectual Property Law Review [On-line]. Available: Lexis-Nexis Academic Universe.

3. 1976 Copyright Act, 17 U.S.C. 102 (1994).
4. 1976 Copyright Act, 17 U.S.C. 107 (1994).

1. Article 1, Section 8, clause 8 ("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;"). U.S. Constitution.

6. A & M Records, Inc. v. Napster, Inc., No. C 99-5183 MHP, No. C 00-0074 MHP, 114 F. Supp. 2d 896; 2000 U.S. Dist. LEXIS 11862, (N.D. Calif. Aug. 10, 2000, Decided, Oct. 4, 2000, Counsel Amended).

5. Digital Millenium Copyright Act, Pub. L. No. 105-304, 112 Stat. 2860 (codified in scattered sections of 17 U.S.C. and 28 U.S.C.; enacted by Congress on Oct. 28, 1998).
11. Digital Millenium Copyright Act 17 U.S.C. 1201(2)(A) to 1201(2)(C) (Supp. IV 1998).

12. Digital Millenium Copyright Act 17 U.S.C. 1202(b) (Supp. IV 1998).
    8. No Electronic Theft Act, Pub. L. No. 105-147, 111 Stat. 2678 (1997). (to be codified at 18 U.S.C. 2311).
    
    7. Stone, B. (2000, Nov. 13). The odd couple: Napster’s deal with Bertelsmann is a huge shift in the war over online music. Newsweek [On-line]. Available:  HYPERLINK "http://www.msnbc.com/news/485471.asp#BODY" http://www.msnbc.com/news/485471.asp#BODY
    
    9. Yamamoto, L. (2000). Notes & comments: Copyright protection and Internet fan sites: Entertainment industry finds solace in traditional copyright law. Loyola of Los Angeles Entertainment Law Journal [On-line]. Available: Lexis-Nexis Academic Universe.