Copyright Infringement Issues

The growth of the Web and other Internet technologies has and will continue to raise a number of copyright issues concerning caching, implied licenses, linking and framing, fair use, and direct, contributory and vicarious liability for third party content.

Direct Infringement

Elements

To prove direct infringement, a plaintiff must first prove that the defendant copied the protected work. Kelly v. Arriba Soft Corp., 336 F.3d 811, 817 (9th Cir. 2003) ("the plaintiff must show ownership of the copyright and copying by the defendant.”); see also LGS Architects, Inc. v. Concordia Homes of Nev., 434 F.3d 1150, 1156 (9th Cir. 1996) (“A plaintiff must meet two requirements to establish a prima facie case of copyright infringement: (1) ownership of the allegedly infringed material and (2) violation by the alleged infringer of at least one of the exclusive rights granted to copyright holders.”).

Copying may be proven by either direct evidence, which is rare, or by indirect evidence that shows (1) the defendant had access to plaintiff’s work, and (2) the defendant’s work has probative similarity. See, e.g., Gates Rubber Co. v. Bando Chem. Indus., 9 F.3d 823, 832 (10th Cir. 1993); Computer Assoc. Int’l, Inc. v. Altai, Inc., 982 F.2d 693, 701 (2d Cir. 1992) (requiring “substantial similarity”). "The word ‘copying’ is shorthand for the infringing of any of the copyright owner’s exclusive rights, described" in 17 U.S.C. § 106. S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081, 1085, n.3 (9th Cir. 1989). The degree of similarity needed to infer that copying has occurred will vary from case to case, but a plaintiff must show evidence sufficient that a reasonable fact finder, considering both access and similarity of the works, could find that the second work was copied from the first. See Gates Rubber v. 'Bando, 9 F.3d at 833 n.9. The plaintiff must also show that the copying was a result of a volitional act. See Religious Tech. Ctr v. Netcom On-Line Commc’n Servs., Inc., 907 F. Supp. 1361, 1369-70 (N.D. Cal. 1995).

The plaintiff also must show that those elements of a work that have been copied are protected expression and of such importance to the copied work that the appropriation of these protected elements is actionable. See id. at 832; Engineering Dynamics, Inc. v. Structural Software, Inc., 26 F.3d 1335, 1341 (5th Cir. 1994). The materiality component is important because not all copying constitutes copyright infringement. See Feist Publications v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991) (“The mere fact that a work is copyrighted does not mean that every element of the work may be protected.”). Thus, unprotectable elements of a work cannot serve as basis for liability for copyright infringement; liability will only attach where protected elements of a copyrighted work are copied. Gates Rubber v. Bando, 9 F.3d at 833.

Public Display Right

The Copyright Act defines a public display as one that has been transmitted or otherwise communicated to the public. 17 U.S.C. § 101; see also 17 U.S.C. 106(5)3. A display is public if it is displayed at “a place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered." 17 U.S.C. § 101. "[O]ne must conclude that under the transmit clause a public performance at least involves sending out some sort of signal via a device or process to be received by the public at a place beyond the place from which it is sent.” Columbia Pictures Indus., Inc. v. Professional Real Estate Investors, Inc., 866 F.2d 278, 281-82 (9th Cir. 1989).

In Allarcom Pay Television, Ltd. v. General Instrument Corp., 69 F.3d 381, 387 (9th Cir. 1995), the court considered whether a transmission sent from the United States but received in Canada constituted an act of direct infringement under U.S. copyright law. The court concluded that the potential infringement at issue did not occur in the United States because it “was only completed in Canada once the signal was received and viewed.” Id.

Cases

1. MAI Systems Corp. v. Peak Computer, Inc., 991 F.2d 511 (9th Cir. 1993). The Ninth Circuit held that loading copyrighted software into RAM met the fixation requirement of the Copyright Act, rejecting the fair use defense on somewhat unique facts. Because viewed operating system's error log while diagnosing a problem with the computer, the court found that the representation in RAM was "sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration." The MAI v. Peak decision has been heavily criticized. Prof. Pamela Samuelson has noted that the same argument could work for a book and a mirror: "because the book's image could be perceived there for more than a transitory duration, i.e., however long one has the patience to hold the mirror." Pamela Samuelson, Legally Speaking: The NII Intellectual Property Report, COMMUNICATIONS OF THE ACM, at 21, (Dec. 1994).
2. Religious Tech. Ctr. v. Netcom On-Line Communications Servs., Inc., 907 F. Supp. 1361 (N.D. Cal. 1995) held that an ISP serving as a passive conduit for copyrighted material is not liable as a direct infringer. The court held a direct infringement claim requires a volitional act: "[a]lthough 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 use a copy by a third party." 907 F. Supp. at 1370; see also CoStar Group, Inc. v. LoopNet, Inc., 373 F.3d 544, 555 (4th Cir. 2004) (“Agreeing with the analysis in Netcom, we hold that the automatic copying, storage, and transmission of copyrighted materials, when instigated by others, does not render an ISP strictly liable for copyright infringement under §§ 501 and 106 of the Copyright Act.”).
3. Ticketmaster v. Tickets.com, 54 U.S.P.Q.2d 1344 (C.D. Cal. 2000). Ticketmaster sued its rival online ticket vendor, Tickets.com, for allegedly deep linking to copyrighted information from the Ticketmaster site in violation of Ticketmaster’s rights. The court denied Tickets.com’s motion to dismiss as to the copyright infringement claim because it found that the complaint satisfactorily alleged copying. The offensive copying warranting denial of the motion to dismiss was the copying of the Ticketmaster event pages to Tickets.com’s own computer for 10-15 seconds in order to facilitate the extraction of facts that were published on Tickets.com. The court found that Tickets.com only republished the uncopyrightable factual data in Ticketmaster’s site on to Tickets.com. Further, it presented the information on Tickets.com in its own format, not in the format used on the Ticketmaster site. Therefore, the material that actually appeared to the consumer on the Tickets.com Web site was not copyrightable. In addition, the court found that Tickets.com’s use of links in itself does not violate the Copyright Act since no copying is involved, and since the user is transported directly to the Ticketmaster Web page. Finally, the court found ambiguity over whether it had jurisdiction over the copyright claim. Ticketmaster had a copyright on its home page, but the links on Tickets.com skipped the home page and went directly to the ‘event page’ for a particular event. The event pages change from day to day. The court held that there was an issue over whether Ticketmaster’s copyright registration even covered the information on the event pages.
4. CoStar Group, Inc. v. LoopNet, Inc., 373 F.3d 544 (4th. Cir. 2004). The court held that the standard outlined in Religious Tech. Center v. Netcom, which held that a person must engage in a volitional act of copying in order to be directly liable for infringement, was the correct standard for direct infringement even if the OSP did not qualify for the DMCA safe harbor. Accordingly, since LoopNet, as an Internet service provider, was simply the owner and manager of a system used by others who were violating CoStar’s copyrights, and was not an actual duplicator itself, the Court found it was not directly liable for copyright infringement. Because Loopnet was “passively storing material at the direction of users in order to make that material available to other users on request,” the court determined it was not engaging in “conduct.” The fact that LoopNet knew there were infringement problems and attempted to control them (engaging in a brief review of uploaded photos), did not lead to direct infringement under Netcom's volition requirement. In addition, the court held that an OSP did not make copies "in the sense that it fixes a copy in its system of more than a transitory duration. ... and the ISP therefore would not be a 'copier' to make it directly liable under the Copyright Act." This holding appears to be an exception to the holding in MAI v. Peak, that a temporary copy made in the course of routine computer operations can be an an infringing copy under the Copyright Act.
5. Ellison v. Robertson, 189 F. Supp. 2d 1051 (C.D. Cal. 2002). On a motion for summary judgment, the court disposed of a direct infringement claim against AOL for copyrighted material posted on Usenet because AOL was only a “passive provider of Usenet access to AOL users.” Id. at 1056. See discussion in subsection C(4)(f) below. Ellison v. Robertson, 357 F.3d 1072 (9th Cir. 2004) "affirm[ed] the district court's holdings as to vicarious and contributory infringement, but [] reverse[d] the district court's application of the [DMCA] safe harbor limitation from liability."
6. Pragmatic C Software Corp. v. Antrim Design Sys., Inc., 2003 U.S. Dist. LEXIS 1824 (D. Minn. 2003). The district court issued a preliminary injunction preventing a licensee from continuing to use licensor’s software without paying royalties after the license agreement had been terminated, even where the licensor’s purported termination was ineffective. The court found plaintiff had a likelihood of success in its copyright infringement action.
7. Arista Records LLC v. Usenet.com, Inc., 2009 WL 1873589 (S.D.N.Y. June 30, 2009). The court granted plaintiff’s motion for summary judgment on all claims: (1) direct infringement of plaintiffs' exclusive right of distribution under 17 U.S.C. § 106(3); (2) inducement of copyright infringement; (3) contributory copyright infringement; and (4) vicarious copyright infringement. With respect to direct infringement, the court found defendants engaged in volitional conduct sufficient to show that they actively engaged in distribution of copies of plaintiffs' copyrighted sound recordings. The court pointed out that “[d]efendants were well aware that digital music files were among the most popular articles on their service, and took active measures to create servers dedicated to mp3 files and to increase the retention times of newsgroups containing digital music files.” For secondary liability (claims 2-4), see "Secondary Liability Cases" below.

Secondary Liability Theories

While “[t]he Copyright Act does not expressly render anyone liable for infringement committed by another,” Sony Corp. v. Universal City Studios, 464 U.S. 417, 434 (1984), courts have developed several common law doctrines of secondary liability: contributory infringement, vicarious infringement and, most recently, inducement. Ellison v. Robertson, 357 F.3d 1072, 1076 (9th Cir.2004); MGM v. Grokster, 545 U.S. 913, 125 S.Ct. 2764 (2005).

Contributory

Elements: Assuming there is an act of direct infringement, contributory infringement may be found when “[o]ne who, with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another.” Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259, 264 (9th Cir. 1996) (citing Gershwin Publishing Corp. v. Columbia Artists Mgmt., Inc., 443 F.2d 1159, 1162 (2d Cir. 1971)). See generally Newborn v. Yahoo!, Inc., 391 F.Supp.2d 181 (D.D.C. 2005); Monotype Imaging, Inc. v. Bitstream, Inc., 376 F.Supp.2d 877, 883 (N.D.Ill. 2005).

1. The knowledge requirement is objective and is satisfied where the defendant knows or has reason to know of the infringing activity. See, e.g., Sega Enters. Ltd. v. MAPHIA, 948 F. Supp. 923, 933 (N.D. Cal. 1996); Casella v. Morris, 820 F.2d 362, 365 (11th Cir. 1987). However, if a defendant can show that its product was capable of substantial or commercially significant noninfringing uses, then constructive knowledge of the infringement should not be imputed. Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984).
2. With respect to the materiality requirement, the Ninth Circuit has held that providing the site and facilities for known infringing activity is sufficient. Fonovisa, 76 F.3d at 264 (adopting the analysis of Columbia Pictures Indus., Inc. v. Aveco, Inc., 800 F.2d 59 (3rd Cir. 1986)); see also 3 Nimmer § 12.04[A][2][b]. However, some courts have required the participation to be “substantial,” finding the mere fact that equipment or facilities may be used for copyright infringement is not determinative. Apple Computer, Inc. v. Microsoft Corp., 821 F. Supp. 616, 625 (N.D. Cal. 1993), aff’d, 35 F.3d 1435 (9th Cir. 1994); see also Sega Enters. Ltd. v. MAPHIA, 948 F. Supp. at 933; Religious Tech. Ctr. v. Netcom On-line Communications Servs., Inc., 907 F. Supp. 1361 (N.D. Cal. 1995); Perfect 10 v. Visa Int'l Service Ass'n, 2004 WL 1773349, at *4 (N.D.Cal. Aug.5, 2004) (must show “a relationship between the ··· services provided by the [d]efendant[ ] and the alleged infringing activity as opposed to the mere operation of the website businesses.”).

Vicarious

Elements. A defendant is vicariously liable for the actions of a primary infringer where the defendant (1) has the right and ability to control the infringer’s conduct, and (2) receives a direct financial benefit from the infringement. Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259, 262 (9th Cir. 1996) (finding liability for swap meet organizer who had right and ability to control vendor sales, received attendance fees, and had increased attendance due to presence of infringing vendors); Shapiro, Bernstein & Co. v. H.L. Green Co., 316 F.2d 304, 306 (2d Cir. 1963). Knowledge of the infringing conduct is not a requirement. 3 Nimmer § 12.04[A][1].

“Vicarious copyright liability is an ‘outgrowth’ of respondeat superior,” imposing liability on those with a sufficiently supervisory relationship to the direct infringer. A&M Records v. Napster, 239 F.3d 1004, 1022 (9th Cir. 2001) (citing Cherry Auction, 76 F.3d at 262). Allocation of liability in vicarious copyright liability cases has developed from a historical distinction between the paradigmatic “dance hall operator” and “landlord” defendants. Cherry Auction, 76 F.3d at 262. The dance hall operator is liable, while the landlord escapes liability, because the dance hall operator has the right and ability to supervise infringing conduct while the landlord does not. Id.

Inducement

In MGM v. Grokster, 545 U.S. 913, 125 S.Ct. 2764 (2005), the Supreme Court adopted an inducement rule for copyright:

For the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule, the inducement rule, too, is a sensible one for copyright. We adopt it here, holding that one 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 infringement by third parties.

Secondary Liability Cases

1. Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417(1984). Defendants sued manufacturer of video tape recorders for contributory infringement. The Court acknowledged that many potential and actual uses of the players resulted in copyright infringement. Since many copyright holders would likely not object to viewers taping programs to allow later viewing, and that such "time shifting" is fair use, that there existed "substantial non-infringing uses.
2. A & M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001). The court held that Napster's peer to peer file sharing network had violated the exclusive rights of distribution and reproduction. Whenever a user uploaded a file the distribution right was violated while the subsequent downloads violated the reproduction right. The court held that contributory infringement requires knowledge and a material contribution in order to impose liability for contributory infringement. The court also found Napster vicariously liable because it derived a financial benefit from the infringing activities and had the "right and ability" to prevent infringement.
3. In re Aimster Copyright Litig., 334 F.3d 643 (7th Cir. 2003). The court found another peer to peer file sharing network secondarily liable. Just because a product may be capable of noninfringing uses, that in itself does not satisfy the Sony standard that the product be capable of "substantial noninfringing uses." The court found the fact that Aimster provided a tutorial that showed how to transfer files of copyrighted music, that this was the factor that differentiated it from Sony. The Seventh Circuit also rejected the 9th Circuit standard in A&M Records, Inc. V. Napster, Inc. that actual knowledge be required for contributory infringement.
4. Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 545 U.S. 913 (2005). The Court rejected Grokster's defense that its file sharing network was capable of substantial non-infringing uses. Since the company encouraged and facilitated these downloads, and made no substantial effort to filter infringing files, they were liable for contributory infringement. The Court found that Grokster's proffered non-infringing use, download of works in the public domain, was unpersuasive since such downloads were not the principal aim of the company.
5. Perfect 10 v. Visa International, 494 F.3d 788 (9th Cir. 2007). The majority found that credit card companies were not liable for secondary copyright and trademark infringement (contributory, vicarious, and inducement) as a result of payment transactions for infringing material on a website. The role of the companies was too attenuated from the infringing activity to be considered a "material contribution."

Framing

Framing occurs when one Web site incorporates another site’s web pages into a browser window with the first site’s own content. The website with the frame may post navigation tools, text, trademarks and/or advertising that the framed website is unable to control. As more of the second site is incorporated into the first, the possibility that users may become confused over affiliation, endorsement or sponsorship becomes stronger. On the other hand, it may be that the marketplace understands frames for what they typically are–simply a way to feature another site which conveys no implication of affiliation or endorsement. The unauthorized use of framing has been challenged under a variety of legal theories, including copyright and trademark infringement, unfair or deceptive trade practices, false designation of origin (passing off), false light and false advertising.

1. The Washington Post Co. v. Total News, Inc. et al., No. 97 Civ. 1190 (S.D.N.Y. Feb. 20, 1997). Various news organizations sued Total News for linking to plaintiffs’ websites and framing their content within the Total News home page. Plaintiffs alleged claims for misappropriation, federal trademark dilution, trademark infringement, false designation of origin, copyright infringement, and various state claims. The case settled in early June 1997 based on defendant’s agreement to stop framing content from plaintiffs’ sites. See also Order, Washington Post v. Gator Corp., No. 02-909-A (E.D. Va. 2002) (granting temporary injunction preventing Gator from delivering pop-up ads to plaintiffs’ websites that allegedly altered the intended appearance of the websites, interfered with the Web site operators’ ability to sell their own ads, decreased the value of these ads on the sites and misled users. The suit was settled with the outcome sealed by the court). See http://news.com.com/2100-1023-983870.html.
2. Futuredontics Inc. v. Applied Anagramic Inc., 45 U.S.P.Q. 2d 2005 (C.D. Cal. 1998). Plaintiff alleged that defendant’s website, which framed content from plaintiff’s website, constituted copyright infringement. Defendant’s motion to dismiss was denied, where the court was unpersuaded by either party’s reliance on prior case law. Plaintiff relied on Mirage Editions Inc. v. Albuquerque A.R.T. Co., 856 F.2d 1341 (9th Cir. 1988) for the position that the framing constituted the infringing creation of a derivative work. Defendant relied on Lewis Galoob Toys Inc. v. Nintendo of Am. Inc., 964 F.2d 965 (9th Cir. 1992) for the position that no derivative work is created by framing, since no portion of the copyrighted work is incorporated in a concrete or permanent form. The court held that neither decision controlled.

Linking

There is substantial debate, and a number of disputes brewing, about whether linking to sites that allegedly engage in copyright infringing activities results in contributory or vicarious liability for the linking site. While the Digital Millennium Copyright Act (DMCA) provides some protection for “information location tools” that link to infringing content, the law remains unsettled.

1. Ticketmaster Corp. v. Microsoft Corp., No. 97-3055 DDP (C.D. Cal. Apr. 29, 1997). Microsoft operated a site called Sidewalk Seattle, which provided information about upcoming entertainment in the Seattle area. Among other things, it linked to the order form page at Ticketmaster’s site in order to allow its users to easily order tickets to events described on the Seattle Sidewalk site. Ticketmaster argued that such deep linking unfairly avoided advertising and marketing on its site. Ticketmaster sued Microsoft alleging trademark dilution, false representation of affiliation under the Lanham Act, and false advertising and unfair competition under California law. Microsoft then filed a counterclaim seeking a declaration that linking is per se legal. The case was settled in February 1999. Microsoft agreed not to deep link from its Sidewalk city guides to pages within the Ticketmaster site and instead to point visitors to Ticketmaster’s home page.
2. Shetland Times Ltd. v. Wills, et al., 1997 F.S.R. 604 (Ct. Sess. O.H.) (Ireland Oct. 24, 1996). The Shetland Times newspaper sought an injunction to prevent the Shetland News, a rival news website, from linking to Shetland Times websites, copying the text of the Times’ headlines and linking to the Times’ articles in such a way that readers might mistake them for the work of the News. The Times maintained that the News’ use of the Times’ site constituted copyright infringement and unfair competition. The court stated in an interlocutory decision that headlines could constitute literary works justifying copyright protection. The News maintained that creating links without permission is the essence of how the Web operates, and an injunction would “block free access to the Internet.” The case settled in November 1997. The Shetland News was granted permission to link to the Times’ headlines, so long as the links were labeled “A Shetland Times Story” and included a button linking to the Times.
3. Bernstein v. JC Penney, Inc., No. 98-2958, 1998 WL 906644, at *1 (C.D.Cal. Sept. 29, 1998) (unpublished) (granting, without discussion, defendant's motion to dismiss on the ground that hyper-linking cannot constitute direct infringement)
4. Intellectual Reserve, Inc. v. Utah Lighthouse Ministry, 75 F. Supp. 2d 1290 (D. Utah 1999). Holders of a copyright in the Church Handbook of Instruction sued defendant for contributory infringement for linking to infringing copies of the work (after defendant was enjoined from itself posting the infringing copies). On unusual facts, the court found that defendants could be held liable for contributory infringement since they actively directed users to the infringing sites. Due to the unusual facts, this case has not been widely followed.
5. Ticketmaster v. Tickets.com, 54 U.S.P.Q.2d 1344 (C.D. Cal. 2000) ("[H]yper-linking does not itself involve a [direct] violation of the Copyright Act (whatever it may do for other claims) since no copying is involved.")
6. Arista Records, Inc. v. MP3Board, Inc., No. 00 CIV. 4660, 2002 WL 1997918, at *4 (S.D.N.Y. Aug. 29, 2002) (unreported) (linking to content does not implicate distribution right and thus, does not give rise to liability for direct copyright infringement)
7. Batesville Services, Inc. v. Funeral Depot, Inc., 2004 WL 2750253 (S.D.Ind. 2004) (unpublished) ("facts are unusual enough to take this case out of the general principle that linking does not amount to copying. These facts indicate a sufficient involvement by Funeral Depot that could allow a reasonable jury to hold Funeral Depot liable for copyright infringement or contributory infringement, if infringement it is. The possibility of copyright infringement liability on these unusual facts showing such extensive involvement in the allegedly infringing display should not pose any broad threat to the use of hyperlinks on the internet.")
8. Online Policy Group v. Diebold, Inc., 337 F.Supp.2d 1195, 1202 n.12 (N.D. Cal. 2004) ("Hyper-linking per se does not constitute direct copyright infringement because there is no copying.")
9. Comcast of Illinois X, LLC. v. Hightech Electronics, Inc., 2004 WL 1718522 (N.D.Ill. 2004) (unpublished) (allegations of paid "hyper-links to websites that sold illegal pirating devices" sufficient to state a claim under 17 U.S.C. § 1203(a).)
10. Perfect 10 v. Google, Inc., 416 F.Supp.2d 828 (C.D.Cal. 2006) ("use of frames and in-line links does not constitute a "display" of the full-size images stored on and served by infringing third-party websites.").

The Fair Use Defense

(For main article, see Copyright: Fair Use)

The fair use doctrine “creates a limited privilege in those other than the owner of a copyright to use the copyrighted material in a reasonable manner without the owner’s consent,” Fisher v. Dees, 794 F.2d 432, 435 (9th Cir. 1986), and “permits courts to avoid rigid application of the copyright statute when, on occasion, it would stifle the very creativity which that law is designed to foster.” Dr. Suess Enters., L.P. v. Penguin Books USA, Inc., 109 F.3d 1394, 1399 (9th Cir. 1997), cert. dismissed, 521 U.S. 1146 (1997).

"It has long been recognized that certain unauthorized but 'fair' uses of copyrighted material do not constitute copyright infringement." Association of American Medical Colleges v. Cuomo, 928 F.2d 519, 523 (2d Cir. 1991). A "fair use is not infringement of a copyright" Online Policy Group v. Diebold, Inc., 337 F.Supp.2d 1195, 1200 (N.D.Cal. 2004) (citing Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994); Harper & Row Publishers, Inc. v. Nation Enters., 471 U.S. 539 (1985)); Penelope v. Brown, 792 F. Supp. 132, 136 (D.Mass. 1992).

To determine whether a work constitutes fair use, courts engage in a case-by-case analysis and a flexible balancing of relevant factors. Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 577-78 (1994). The Supreme Court recognized that science and art generally rely on works that came before them and rarely spring forth in a vacuum, and instructs courts to use the doctrine to limit the rights of a copyright owner regarding works that build upon, reinterpret, and re conceive existing works. See id. at 575-577.