1. Internet Legal Issues (Management 447)
Professor Charles H. Smith
Copyrights (Chapter 4)
Spring 2006

2. Copyright Protection – 17 U.S.C. § 102
(a) Copyright protection subsists in original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device. Works of authorship include the following categories    (1) literary works;    (2) musical works, including any accompanying words;    (3) dramatic works, including any accompanying music;    (4) pantomimes and choreographic works;    (5) pictorial, graphic, and sculptural works;    (6) motion pictures and other audiovisual works;    (7) sound recordings; and    (8) architectural works.
(b) In no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work.

3. Some Specifics re Copyright Protection
Software is considered to be “fixed in a[] tangible medium.”
Generally, in order to qualify for copyright protection, “the requisite level of creativity is low; even a slight amount will suffice.” (Feist Publications, Inc. v. Rural Telephone Service Co., 499 U.S. 340, 345 (1991) (White Pages listings not copyrightable).)

4. Registration and Duration of a Copyright
Requirements – completed registration form and submission of original work.
Registering a copyright in the Copyright Office results in issuance of certificate of registration – prima facie evidence of validity of copyright; permits copyright owner to sue infringer.
Sonny Bono Copyright Term Extension Act (1998) – extended duration of copyright protection by 20 years; pre-1978 work – 28 years + now 67-year renewal term; 1978 and after work – life of author + now 70 years after author’s death.
Case study – Eldred v. Ashcroft on pp (challenge to 20-year extensions granted by Bono Act – tension between Congress’ power under Copyright/Patent Clause and First Amendment of the U.S. Constitution).

5. Exclusive Rights Possessed by a Copyright Owner
Right to reproduce work – can arise when text/pictures on website copied onto another website.
Right of distribution – sell, rent or any other method of distribution.
Right to prepare derivative works based on work – cannot “adapt” another work to make your own creation; e.g., applies to movie sequels.
Right to perform and publicly display work.

6. Types of Copyright Infringement
Direct infringement – direct infringer is primary party who violates one of copyright owner’s exclusive rights.
Contributory infringement – contributing to another’s direct infringement; contributory infringer must know or have reason to know of direct infringing activity or material contributes to direct infringer’s conduct; case study – A&M Records v. Napster, 239 F.3d 1004 (9th Cir. 2001) (“if a computer system operator learns of specific infringing material available on his system and fails to purge such material from the system, the operator knows of and contributes to direct infringement”).

7. Types of Copyright Infringement cont.
Vicarious infringement – party receives direct financial benefit from another’s infringement and had right/ability to supervise infringement activity; no knowledge or participation required; case studies – Religious Technology Center v. Netcom On-Line Communication Services, Inc. on pp (portions of another’s copyrighted works posted on website); Napster (“[f]inancial benefit exists where the availability of infringing material ‘acts as a draw’ for customers”).
New cause of action for secondary copyright infringement based on inducement – MGM Studios, Inc. v. Grokster, Ltd., 125 S. Ct (2005) (see handout and following slide).

8. MGM v. Grokster – Court Comes Down Hard on Facilitators of Illegal Downloading
Copyright holders re songs sued Grokster and others for providing free software that permitted peer-to-peer file-sharing.
U.S. Supreme Court’s holding – “[O]ne who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of [direct] infringement by third parties” (Grokster, 125 S. Ct. at 2770); software providers’ intent to promote copyright infringement shown by three factors (Grokster, 125 S. Ct. at )
“[A]iming to satisfy a known source of demand for copyright infringement, the market comprising former Napster users.”
No “attempt[] to develop filtering tools or other mechanisms to diminish the infringing activity using their software.”
“[D]irecting ads to the screens of computers employing their software.”
Distinguished prior Sony case based on VCR’s potential for copyright infringement since VCR had principally had fair use of “taping program for later viewing at a more convenient time” and “no evidence that Sony had expressed an object of bringing about taping in violation of copyright or had taken active steps to increase its profits from unlawful taping” (Grokster, 125 S. Ct. at ).

9. Copyright Infringement Cause of Action
To prevail in an infringement case, copyright owner must prove:
Ownership of valid copyright, and
Infringement by the defendant re owner’s exclusive right(s).
Ownership – copyright registration certificate is prima facie evidence of copyright’s validity and facts stated in the certificate, including work’s originality and copyright’s ownership.
Infringement – can be shown by verbatim copying of computer program’s object or source code, or by non-literal copying where computer program’s “look and feel” have been copied (“Abstraction-Filtration-Comparison” test stated in Computer Associates Int’l, Inc. v. Altai, Inc., 982 F.2d 693 (2d Cir. 1992)).
Many aspects of computer programs are not copyrightable; e.g., menu command hierarchies, icons.
Case study – Case Problem #3 on page 109.

10. Limits on Copyright Owners’ Exclusive Rights; or, Defenses to Infringement Actions
Fair use doctrine
Four “nonexclusive” factors re whether fair use applies – see pp
Case studies – Napster (quote on page 83), Case Problem #2 on page 109, and cases involving parodies as criticism or comment (“Pretty Woman” by 2 Live Crew and “The Wind Done Gone”); the handout re Grokster provided to you tonight.
First sale doctrine – owner of copy of work has right to sell it; e.g., selling your textbook back to the book store at the end of the semester.
Public domain – government works (e.g., cases) and works whose copyright term has expired (e.g., old hymn like “Amazing Grace”).
Copy of computer program.

11. Remedies for Copyright Infringement
Monetary damages – plaintiff’s actual damages plus disgorgement of defendant’s profits (17 U.S.C. § 504).
Statutory damages – instead of actual or disgorgement damages, $750-30,000 per work infringed; court has discretion to increase damages to up to $150,000 for willful infringement and decrease damages to minimum of $200 for innocent infringement discretion (17 U.S.C. § 504).
Attorney’s fees – prevailing party can recover against losing party; court has discretion whether to award fees (17 U.S.C. § 505).
Injunctive relief – pre-trial relief includes TRO and preliminary injunction only if “irreparable harm” shown; permanent injunction can be granted after trial even if pre-trial relief denied or not requested (17 U.S.C. § 502).

12. Digital Millennium Copyright Act (1998)
DMCA enacted to prevent circumvention of technologies used by copyright owners to manage the control and use of works’ digital content; also complies with World Intellectual Property Organization copyright treaty.
DMCA prohibits decryption of technological locks/controls used to prevent cheap/massive copying of digitalized works (e.g., music, video); illegal to “descramble a scrambled work, to decrypt an encrypted work, or otherwise avoid, bypass, remove, deactivate, or impair a technological protection measure” (17 U.S.C. § 1201).

13. Safe Harbor Under DMCA For Online Service Providers
Online service provider (OSP) – search engine, ISP, hosting service or website with multiple links to 3rd party sites; OSP provides network access to subscribers and customers who may post materials (e.g., on a message board) that infringe on copyrights.
OSP can have secondary liability (contributory or vicarious infringement).
OSP can be exempt from secondary liability (“safe harbor”) if gives proper notification of policy re copyright infringement and establishes company agent to be notified of infringement; “safe harbor” exists if policy notification and until agent is notified of infringement (upon notice to agent, OSP must act or no more “safe harbor”).
Case studies – Case Problem #1 and 4 on pp