Technology Law Column

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Published in the Chicago Daily Law Bulletin, December 11, 1997 at page 6.

Online Copyright Cases Can Simply Be Difficult.

Copyright 1997 by David Loundy

When discussing copyright issues on-line, there are a lot of esoteric questions that can be asked about unusual situations. Some of these situations are merely fodder for law school exams, and some revolve around threatened or actual litigation. A recent federal case, however, has a refreshingly simple set of facts-- unfortunately it shows that some difficult questions about the finer interpretation of copyright law are not easy to avoid in a digital setting.

The relevant facts of Marobie-FL v. National Association of Fire Equipment Distributors, No. 96 C 2966 (N.D. Ill. Nov. 13, 1997) are as follows:

The National Association of Fire Equipment Distributors, or NAFED, has a web page. The operator of the web page received an offer for some "clip-art." He sent off a few blank disks, and received them back full of computer images of firefighter-related art. He placed the images on NAFED's web page for anyone to download as a courtesy provided by NAFED, and advertised their presence.

The images, however, were copyrighted property of plaintiff Marobie-FL, doing Business as Galactic Software. When sales of the clip art plummeted, and Marobie learned it was because the images were available for free on NAFED's web page, Marobie, sued NAFED, and, for good measure, Northwest Nexus, NAFED's Internet service provider which hosted NAFED's web page.

Was there a copyright infringement? Sure. Finding infringement in such a case is something of a no-brainer. The plaintiff had a valid copyright, and unlicensed copies were made.

Unfortunately, Judge Robert W. Gettleman went further than necessary in finding a copyright infringement of the plaintiff's work. The judge held that NAFED's acts constituted a reproduction of the plaintiff's work in violation of its exclusive right to make reproductions, as provided in 17 U.S.C. Section 106(1). The court cited the Playboy Enterprises, Inc. v. Frena case (839 F.Supp. 1552 (M.D. Fla. 1993) as precedent. Unfortunately, the Judge continued with an argument that was made in the Playboy case and found a violation of the exclusive right to distribute copyrighted works, a right protected by 17 U.S.C. Section 106(3).

In neither case, however, was the distribution right violated.

Section 106(3) of the Copyright Act protects the right "to distribute copies . . . of the copyrighted work to the public by sale, or other transfer of ownership, or by rental lease or lending." Section 101 of the Copyright Act defines a copy as "material objects . . . in which a work is fixed by any method now known or later developed, and from which the work can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device."

Where are the copies in this case?

The original floppy disks are copies. The webmaster's hard drive constitutes a copy. Northwest's computers' hard disks are also copies. Were any of these copies distributed by NAFED? No. All of these copies remain with their initial owners. NAFED did not give its hard disks to web surfers who called up its web page and downloaded the copyrighted clip art. Rather, NAFED reproduced a portion of the contents of the hard disk for the web surfers. There is clearly a reproduction at issue, but there is no distribution.

The first defense NAFED offered is that it was an innocent infringer, and thus, any damages should be sharply reduced. NAFED argued that the images did not have a copyright notice, nor did the disk containing the images. The Copyright Act, however, does not require a notice. Furthermore, the court pointed out that the legal copies of Marobie's disks did have a copyright notice-- the disks NAFED claims are lacking copyright notices are those of NAFED's webmaster, who sent the disks to an unknown source in order to acquire the infringing clip art.

Of course, no copyright case would be complete without a claim that the infringer's use is a fair one, and thus protected by 17 U.S.C. Section 107. And, of course, the argument is often a losing one.

Gettleman found that even though NAFED is a non-profit company, and did not sell the clip art, the use could still be considered a commercial one. The judge held that NAFED would benefit from making Marobie's work available on its web page by promoting NAFED's association and raising advertising revenue, all without paying the customary price for the use of the works. Furthermore, the works were not used for traditional fair uses such as criticism, teaching, news reporting and the like. The type of material copied-- creative pictures-- also constituted a strike against the defendant's fair use claim, as did the fact that three of the plaintiff's five disks were copied in their entirety, and each of the three copied disks was subject to a separate copyright. The final fair use factor, potential damage to the market for the copyrighted work, was presumed from NAFED's use of the work.

The analysis of the Internet service provider's liability is where this case demonstrates some of the complexities of on-line copyright law. There have been a number of cases, such as MAI Systems Corp. v. Peak Computer, Inc., 991 F.2d 511 (9th Cir. 1993) that have held that loading software into a computer's Read-Only Memory (RAM) constitutes the creation of a copy. Based on the aforementioned definition of a copy, this seems like an appropriate finding. Northwest, however, argued that based on how the technology works in the case of its web server, although the copyrighted work passed through its computer's RAM, there was no "fixation" of the work in that RAM. In the words of the statute, the argument is that the work is not "sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for more than a transitory duration." It is the transitory duration portion of the definition that was Northwest's hook.

Northwest asserted that its system made the reproductions so quickly that a complete copy was never even present in its system's RAM. Northwest also argued that its situation was not analogous to that of MAI, or, more specifically to that in Religious Technology Center v. Netcom On-Line Communications Services, Inc., 907 F. Supp. 1361 (N.D. Cal. 1995 (available on the Internet at, because, in both MAI and Netcom, the work was present in the computers' RAM for a much longer period of time.

The judge rejected this argument, focusing on the "perception" aspect, rather than the "transitory duration" aspect. The court seized on the language from the definition of "copies" and argues that the "copies" generated by Northwest could still be perceived "with the aid of a machine or device" and thus, Northwest was making reproductions of the protected works. The court missed that Northwest appeared to be challenging whether there is a "fixation"-- which requires that a copy exist for "more than a transitory duration." To find against Northwest on this issue, as the issue was framed by Northwest, would be to find that other similar means of digital transmission-- such as the transmission of telephone calls via fiber-optics or satellites, or digital broadcasting of radio, television, or some portable phones-- all constitute the creation of potentially infringing copies by the service provider. The court did acknowledge that it may be the web surfer who was "fixing" the copies, but nonetheless the court rejected Northwest's argument that its computers were not copying the plaintiff's works.

Gettleman did, however, accept Northwest's argument that, based on the Netcom case, Northwest should not be held liable for any such copies that were made. The Netcom court refused to hold a service provider strictly liable for its machine's passive operation. Here also, the court found that there was no active involvement on the part of the service provider-- all Northwest did was provide "the means to copy, distribute or display plaintiff's works, much like the owner of a public copying machine used by a third party to copy protected material."

While this may be the just result based on the lack of participation or knowledge of the service provider, it is not a necessary result under the Copyright Act. This fact was illustrated in the recent Playboy Enterprises, Inc. v. Webbworld case (No. 3-96-CV-3222-DES, (N.D. Tex., June 27, 1997). In the Webbworld case, the judge made a distinction (based on a perhaps inaccurate interpretation of the facts) between the Netcom case and the facts in front of it, and held that a service provider could be held liable for 'automated' copyright infringements. The Webbworld case was not addressed in Gettleman's opinion.

Cases such as this show that where there is a clear infringement of a copyright on-line, remedies are available against the truly responsible party. Although there may be arguments put forth to justify or excuse infringements, the law is really more clear than many people make it out to be. However, the law as it applies to service providers is often not nearly so clear. In some cases, such as Webbworld, the service provider is a bad actor, and copyright holders should clearly have a remedy. In cases such as Marobie, the service provider really should have some insulation from liability. However, cases such as this illustrate that these are complex issues, the subtleties and implications of which are often missed in court decisions.

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