Copyright Principles in Action

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APPENDIX G

ELECTRONIC BULLETIN BOARD COPYRIGHT CASES

Copyright Oregon State Board of Higher Education 1999

Electronic bulletin boards and newsgroups, some commercially operated by large corporate on-line service providers (OSPs) (also known as Internet Service Providers (ISPs)), some operated by sole proprietorships, and some operated by non-profits and universities, have been the subject of recent litigation. Although the litigation so far seems to have involved software, images or text, sites who post (or who allow their users to post) real-time digitized music may well be required to obtain a mandatory performance license (see Act, sec. 106(6) and 114) from the American Society of Composers, Authors and Publishers (ASCAP), Broadcast Music, Inc (BMI) or SESAC, Inc. And the retention of a copy of the music on the operator' server might even require a mechanical (recording) license. A brief description of recent cases follows.

1. In Sega Enterprises v. Maphia, 948 F. Supp. 923 (N.D. Cal. 1996), plaintiff Sega alleged and proved that the defendant's commercial (use fees or profitable bartering were present) bulletin board made bootleg copies of Sega's computer games available for downloading. Some of Maphia's customers (using equipment sold to them by Maphia) were making unauthorized copies of Sega's games. Maphia's owner was held to be a contributory infringer because he knew his customers were up-and-downloading the games resulting in his board being a "central depository site" and he "tracked or had the ability to track" his user's uploads and downloads. The court found the defendant liable for infringement because he "substantially participated [in his user's infringing actions] by inducing, causing or materially contributing" to their conduct.

2. In a case where a commercial bulletin board operator claimed he didn't realize that his customers were uploading infringing images, the court skirted the "copying" and contributory infringement issues and found the operator-defendant to be a direct infringer who violated the plaintiff's exclusive rights of distribution and display when he "supplied" the images (170 photos from Playboy) on his "adult material" bulletin board. Even though use of the bulletin board was limited to subscribers, the court declared that display (which was actually on the downloader's monitor) was inherent in the "transmission" and that such display was "public". Recall that the Copyright Act lists "public display" (where the work is shown to "a substantial number of persons outside of a normal circle of a family" or friends) to be one of the exclusive rights and note that "display" is defined as "showing" a copy by "any device". Playboy Enterprises, Inc. v. Frena, 839 F.Supp. 1552 (M.D. Fla. 1993).

3. In Playboy Enterprises, Inc. v. Webworld, Inc., 968 F.Supp. 1171, 1175 (N.D.Tex. 1997), a commercial bulletin board operator was held liable for infringement even though it claimed that its customers uploaded the images from alternative newsgroups. The court felt the defendant was more than just an on-line access provider and distinguished Netcom (infra in 4 below).

4. The latest and most widely noted of the Internet copyright cases involved a former Scientology preacher, Erlhich, who, in attacking his former belief-system, published without permission (via a USENET newsgroup) certain published and unpublished works of Scientology founder L. Ron Hubbard. Religious Technology Center v. Netcom On-line Communications Services, Inc., 907 F.Supp. 1361 (N.D. Cal. 1995)(summary judgment for defendant denied). Erlich actually posted the materials on -- as one of many users of -- a bulletin board run by one Klemsrud who in turn got access to the Internet through Netcom as his on-line service provider (OSP). While finding that a copy was made on Netcom's computer (and resided there for eleven days), the court characterized this as "necessary to ... a working system for transmitting Usenet postings to and from the Internet" and as occurring "without any human intervention" and concluded that such "incidental" copying did not indicate that Netcom "caused" the copying. Id. at 1368 - 1369. The court added that "although copyright is a strict liability statute, there should still be some element of volition or causation..." Id. at 70. Frena was distinguished on the issue of "displaying" as the court found providing access was not the same as maintaining an archive.

(a) However, Netcom did not fare so well with the court on the issue of contributory infringement. Since the Religious Technology Center (RTC) had complained to Netcom that Erlich's postings were infringing, the court said Netcom's original ignorance of the nature of his postings (it neither monitored nor screened what was uploaded to its Internet server) was immaterial. Instead the court focused on Netcom's knowledge after notification by RTC and while the material still (the balance of the eleven days) resided on its server. Noting that Netcom had not even bothered to look at the material after being notified, the court said Netcom was different from a mere landlord and that it would be reasonable, "assuming Netcom is able to take simple measures to prevent further damage", to hold it liable as a contributory infringer for failing to do so. Id. at 1375.

(i) The reported opinion is in the posture of a summary judgment (i.e. before trial) motion by the defendant; thus the court's need to assume an important fact which would be determined, one way or the other, by evidence presented at the trial (the court denied defendant's motion).

(ii) The court recognized the likely inability of Netcom to significantly interdict Internet distribution once the material left its server in acknowledging the "decentralized" and "dynamic rerout[ing]" capabilities of the Internet. Id. at 1370, n.13.

(iii) Netcom argued that it could not be sure, in the few days it was given, that the postings were infringing. The court noted that the works contained copyright notices and said this made it "difficult to argue that a defendant did not know ... [they] were copyrighted" although conceding that the context of Erlich being a "former minister" may raise fact issues (at trial) as to whether Netcom may have thought he had obtained permission from RTC. Id. at 1374.

(iv) A tougher determination, admitted the court, was knowing whether the posting was a "fair use" Id. at 1374. Here, the court pointed out that although Netcom was a "commercial" OSP, it did not "directly gain anything from the content of the information available to its subscribers" and thus downplayed that fair-use factor (this is a very favorable interpretation that other courts might well not share). Similarly, the court did not feel that copying the entirety of some of Hubbard's works (to which RTC had the copyrights) was necessarily fatal if access to the complete work on Netcom's part was essential to the retransmission function performed by Netcom (citing a time-shifting VCR case and a reverse-engineering software case. Id. at 1380). Note the latter analysis applied only to Netcom so a different analysis would be called for in weighing the quantity factor for Erlich's need to effectively criticize Scientology. Having set some of the parameters in advance, the court left the actual balancing of the factors to await relevant evidence at trial.

5. For a good review of direct, vicarious, and contributory infringement in the Internet context, see Marobie-FL, Inc. v. National Ass’n of Fire Equipment Distributors and Northwest Nexus, Inc., 983 F.Supp. 1167, 1177 -79 (N.D. Ill. 1997).

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