|
IRINA DMITRIEVA
University of Florida at Gainesville
2000 SW 16th St. #93
Gainesville, FL 32608
home ph. number: (352) 375-3290
e-mail address: <[log in to unmask]>
I KNOW IT WHEN I SEE IT:
SHOULD INTERNET PROVIDERS RECOGNIZE COPYRIGHT VIOLATION
WHEN THEY SEE IT?
ABSTRACT
The Digital Millennium Copyright Act of 1998 created a new standard of
knowledge for Internet service providers in copyright infringements suits. The
paper argues that in light of the statute's legislative history, courts should
narrowly construe the new knowledge requirement. Otherwise, service providers
would have an incentive to restrict more online speech than necessary for
enforcing copyright law on the Internet.
I KNOW IT WHEN I SEE IT
I KNOW IT WHEN I SEE IT
I Know It When I See It: *
Should Internet Providers Recognize Copyright Violation When They See It?
*This phrase was borrowed from the concurring opinion of Justice Potter Steward
in Jacobellis v. State of Ohio,
378 U.S. 184 (1964)
Introduction
Internet service providers (ISPs) are gateways to the world of cyberspace. They
provide online access to individuals, educational institutions, corporations,
and government agencies. At the same time, they can easily "pull a plug" on
cyber-speech by taking down questionable material and terminating the accounts
of specific users. In this sense, ISPs are guardians of free speech online, and
they should not become Internet censors or decide what constitutes copyright
violations on the Internet.
For example, fans of Homer J. Simpson may put his images on their personal web
sites. Likewise, those who enjoy novels of Iris Murdoch[1] may quote her
extensively on their web pages. Most Internet users also hope that online
services will notice their sites and list them in their Internet directories, so
that more people could visit them. Fans believe that the fair use provision of
copyright law protects their use of copyrighted images or excerpts from the
novels. However, the owners of copyrights for the famous cartoon series or Iris
Murdoch's novels may think otherwise. In this situation, when compilers of
Internet directories come across such fan sites, should they decide whether the
sites violate copyright law? And if a cataloger decides that a violation
occurred, should it immediately block access to the site?
The Online Copyright Infringement Liability Limitation Act signed into law in
October 1998,[2] provides that ISPs are required to expeditiously take down
online material when they become "aware of facts or circumstances from which
infringing activity is apparent."[3] The question is: just how "apparent" a
copyright infringement should be for a service provider to take restrictive
actions against it? In other words, should ISPs be expected to know a copyright
violation when they see it?
This paper argues that in light of the legislative history of the new law,
courts should narrowly construe the new "awareness" standard. If this
requirement is interpreted broadly by courts, ISPs may have incentive to
restrict more online material than necessary -- and get away with it, because
the same law shields them from liability for taking down, in good faith,
allegedly infringing content. Part I of this paper provides an overview of the
ISPs' liability in copyright infringement suits before the passage of the
statute. Part II summarizes the main provisions of the statute. Part III
describes the legislative history of the statute, with particular focus on
drafting the new knowledge and awareness requirement. Finally, Part IV argues
for the narrow judicial interpretation of the new awareness standard in light of
the statute's language, structure, and legislative history.
Part I: Liability of ISPs for copyright violations of their users before the
passage of the statute
Copyright law provides economic incentives for authors to engage in creative
activities by granting them a temporary monopoly over their works.[4] Exclusive
rights of copyright owners include the rights to reproduction, distribution,
display and performance, and the right to prepare derivative works.[5] To better
ensure financial remuneration of authors, copyright law imposes strict liability
(or legal responsibility)[6] for copyright violations. This means that an
individual's intentions or knowledge are irrelevant in determining whether a
copyright violation occurred. Courts find individuals strictly liable even for
innocent, unconscious copyright violations.[7]
For example, strict liability principles of copyright law differ dramatically
from the liability principles in defamation and obscenity law, where courts take
into consideration the element of guilty knowledge (scienter) on the part of a
defendant.[8] Defamation and obscenity laws distinguish between primary
publishers and distributors, with the latter subject to more lenient standard of
liability.[9] On the contrary, under copyright law, distributors, such as
bookstores or libraries, may be found strictly liable for distributing materials
that violate copyright, even if they are not aware of their illegal nature.
Courts base responsibility for copyright violations on three theories of
liability: direct, vicarious and contributory. Direct and vicarious liability
are examples of strict liability, that does not take into consideration the
element of knowledge. Direct infringement occurs when an individual violates one
of the exclusive rights of a copyright owner. For example, direct violation
occurs when a vendor distributes bootleg recordings, or when a person reproduces
a copyrighted work without the author's permission.
Vicarious liability is imposed on an individual or entity that does not commit
a copyright violation, but directly benefits from it and has the right and
ability to control it. Vicarious liability is an outgrowth of the doctrine of
respondeat superior, according to which a master is responsible in certain cases
for the wrongful acts of his servants. For example, a dance hall owner may be
found vicariously liable for leasing his premises to a band that performs
copyrighted songs without permission.[10]
The only theory of liability that considers the element of knowledge on part of
an infringer is contributory liability. Contributory infringement is an
outgrowth of a common law principle that those who knowingly participate in the
act of direct infringement should be held accountable for their wrongful
actions. To be found responsible for contributory infringement, a person "must
have acted with the direct infringer and must have known of the infringing
activity."[11] For example, an operator of a retail copy service may be found
contributorily liable for helping his customers copy protected audio-tapes by
using his cassette recorder.[12]
With the development of the Internet, the question arose which standard of
liability should apply to ISPs. Two federal district court decisions framed the
debate on this issue. In the 1993 case, Playboy Enterprises, Inc. v. Frena,[13]
a Florida federal court ruled that a computer bulletin board (BBS) operator was
directly liable for illegal materials posted to his system by subscribers. The
court ignored the fact that the BBS operator claimed he did not know about
copyright violations on his system, and, as soon as he learned about them, he
took down the infringing materials. This decision alarmed the ISP community
which said that imposition of strict liability on service providers would compel
them to monitor private transmissions of their users in effort to detect
potential copyright violations.[14] By monitoring transmissions of their
subscribers, ISPs risk to violate another federal law, the Electronic
Communications Privacy Act, which prohibits interference with private digital
communications, such as electronic mail.[15]
In the 1995 case, Religious Technology Center v. Netcom Online
Communications,[16] a federal court in California refused to follow Florida's
precedent in holding an ISP strictly liable for copyright violations of its
users. Instead, the court ruled that liability of ISPs should be based on the
theory of contributory infringement. Under this theory, liability for
participation in illegal activity is established when the defendant, "with
knowledge of the infringing activity, induces, causes or materially contributes
to the infringing conduct of another."[17] The California court's decision
received fire from the community of copyright owners who argued that, by
introducing the element of knowledge into the liability scheme, the court
encouraged ISPs to turn a blind eye on copyright violations on their
networks.[18]
The debate over the proper copyright liability standard for ISPs unfolded in
academic circles. Most of the research on this issue appeared in law reviews.
For example, Jane Ginsburg of Columbia University School of Law, argued that
ISPs should be subject to the strict liability standard because they facilitate
transmissions of infringing messages.[19] Ginsburg also wrote that copyright
owners may choose to sue ISPs as "profitable intermediaries" to recover some of
their losses from copyright violations.
Others stressed that if ISPs are exposed to strict liability, they would start
monitoring transmissions on their networks, thus, turning into online censors.
Law professor Niva Elkin-Koren wrote that imposition of strict liability on ISPs
is not a sound policy choice because it would turn ISPs into inspectors, or
supervisors of the online information flow.[20] Her ideas were echoed by a
copyright expert, Pamela Samuelson, who warned against ISPs becoming
"centralized control centers to enforce copyright law."[21]
Some scholars noted that under existing case law, ISPs can be held vicariously
and contributorily liable for activities of their users. For example, Mary Ann
Shulman wrote that ISPs who reap advertisement revenue when users hit their web
sites might be found liable if the content includes infringing material.[22]
Several scholars came to the conclusion that courts should hold ISPs
accountable for acts of their users only if copyright owners can demonstrate
that ISPs had actual knowledge of copyright violations. For example, Georgio
Bovenzi wrote that the appropriate standard of liability for ISPs is negligence
under the actual knowledge requirement.[23] According to Bovenzi, the actual
knowledge requirement would ensure the freedom of online communications because
ISPs would not have incentive to monitor transmissions of their users for
potentially infringing content. Bovenzi suggested that upon receipt of a
complaint from a copyright owner, ISPs should be required to remove an allegedly
illegal message.[24]
Unfortunately, neither case law, nor academic commentary provided a consistent
solution to the problems of ISPs' liability for copyright violations of their
users. The answers to some of those questions came in October 1998, when
Congress enacted limitations on copyright liability for ISPs as a part of the
Digital Millennium Copyright Act.
Part II: Summary of key statutory provisions
Congress passed the Online Copyright Infringement Liability Limitation Act (the
Act)[25] as Title II of the Digital Millennium Copyright Act,[26] signed into
law by President Clinton on October 28, 1998. The Act, which took effect on the
same date, amended Chapter 5 of the Copyright Act (17 U.S.C. 501) by adding a
new section called "Limitations on liability relating to material online."
The Act applies to Internet service providers and nonprofit institutions of
higher education in their capacity as service providers.[27] It creates a number
of "safe harbors" for service providers against liability for copyright
violations of their users, based on the functions performed by service
providers. The liability limitations apply to four general categories of
activity: transitory digital network communications,[28] system caching,[29]
storage of information residing on systems or networks at the direction of
users,[30] and information location tools.[31] These "safe harbors" protect
service providers from all monetary relief for direct, contributory, and
vicarious infringement, and substantially limit injunctive relief against
qualifying service providers.
To be eligible for liability limitations, service providers should designate an
agent to receive notifications of copyright violations on their networks[32] and
should implement a policy for the termination of accounts of those subscribers
who repeatedly violate copyright.[33] In addition, service providers should not
interfere with "standard technical measures" used by copyright owners to
identify and protect their works (for example, copyright management
information).[34] This provision reflects the belief of Congress members that,
in the future, technology may provide solutions to many issues facing copyright
owners.[35] The statute specifies that "standard technical measures" should be
developed by both copyright owners and ISPs in "an open, fair, voluntary,
multi-industry standards process."[36] For example, members of the House
Committee on Commerce anticipated that organizations such as the World Wide Web
Consortium, the Internet Engineering Task Force, or ad hoc industry groups,
could take an active part in this process.[37]
The Act essentially creates a series of affirmative defenses for service
providers who are found liable for copyright violations under existing
principles of law.[38] At the same time, if service providers do not qualify for
any of the "safe harbors," they can still assert other defenses available under
copyright law, such as the fair use defense.[39]
Subsection (a) of the Act limits liability of service providers who perform
only a passive "conduit" function in the process of transmitting, routing or
providing connections for digital communications of others. This provision
resembles the "passive carrier" exemption of the Copyright Act.[40] Under Sec.
111(a)(3) of the Copyright Act, certain "passive carriers" are exempt from
copyright liability as long as they do not directly or indirectly control the
content of their transmissions and clientele.[41] Traditionally, the passive
carrier exemption has applied to communications common carriers regulated by the
Federal Communications Commission. Examples of "passive" functions performed by
ISPs include provision of e-mail services, newsgroups, and listserv services.
For a service provider to qualify for the "conduit" limitation, several
conditions must be met: a service provider must not initiate, select or modify
the content of the communication; it must not determine the recipients of the
message, or maintain a copy of the message on a system or network in a manner
ordinarily accessible to other people for a longer period than is reasonably
necessary for the transmission.[42]
Subsection (b) of the Act limits liability of service providers for
intermediate storage of material in the process of system caching, under certain
conditions. These conditions include: no modification of the material's content
by a service provider; regular updating of the material in accordance with
accepted technical standards; no interference with the ability of technology to
return certain data to the original site; and no circumvention of password
mechanisms.[43] In addition, a service provider must expeditiously remove the
material claimed to be infringing upon notification from a copyright owner.[44]
The other two functions protected by the liability limitations -- information
residing on a system or network at the direction of users and information
location tools -- contain conditions that combine the elements of contributory
and vicarious liability. Subsection (c) applies to activities such as provision
of server space for users' web pages or chat forums. Subsection (d) applies to
the online navigational tools, such as search engines, hypertext links, Internet
directories and lists.
Both subsections establish a new knowledge standard for finding the service
providers' liability. They require that a service provider must not have actual
knowledge that the material or activity on its network is illegal, or, in the
absence of such knowledge, must not be "aware of facts or circumstances from
which illegal activity is apparent."[45] The statute requires that, upon
obtaining such knowledge or awareness, a service provider must act expeditiously
in removing an allegedly illegal material off-line. In addition, a service
provider must not receive a financial benefit directly attributable to the
illegal activity.
The Act establishes a somewhat different standard of knowledge for nonprofit
educational institutions in their capacity as service providers. Subsection (e),
inserted by the House and Senate conference committee, provides that when a
faculty member or a graduate student performs a teaching or research function,
such faculty or student's knowledge of illegal activities, generally, should not
be imputed to an institution.[46] Exceptions to this rule include situations
when infringing materials were officially required or recommended for a class
taught at an institution for the preceding three years; and when the institution
received more than two notifications of copyright violations within three years
but failed to act on them. In addition, institutions are required to implement a
copyright policy and to promote compliance with it.
The statute sets forth the rules for the "notice and take-down" procedure.[47]
This procedure provides that copyright owners may notify an ISP of alleged
copyright violations on its networks. Upon receipt of such notification, an ISP
is expected to "take down" or disable access to the allegedly infringing
material. The statute requires that effective notification should identify
allegedly illegal works; provide information that would permit service providers
to locate an illegal site and to contact a copyright owner. In addition, the
notification should include a good-faith statement from the complaining party
that the material in question violates copyright law.
To balance the rights of copyright owners and users in the digital environment,
the statute also provides for the process of counter notification.[48] Under
this provision, a user whose material was taken off-line at the request of a
copyright owner, has the right to argue (under the penalty of perjury) that the
material was removed as a result of mistake or misidentification. Upon receipt
of a counter notification, a service provider should restore access to the
allegedly illegal material within 10 to 14 business days unless a copyright
owner files an action seeking a restraining court order. The statute provides
that a service provider is not liable for disabling access to an allegedly
illegal material, even if such material ultimately proves to be
non-infringing.[49]
Under the statute, copyright owners can request a federal district court to
issue a subpoena to a service provider for identification of an alleged
infringer.[50] In this case, a service provider is required to disclose to a
copyright owner any identifying information that it has in its possession.
However, a service provider is not expected to contact other systems or networks
for information they may have about a potential infringer.[51]
The statute provides that copyright owners can't seek monetary relief for
activities of service providers that fall within the "safe harbors." However,
copyright owners can still seek limited injunctive relief against a service
provider.[52] The statute limits injunctive relief to either blocking access to
a particular online site, or terminating an account of a subscriber who engages
in illegal activities.[53] In issuing injunctions, courts are advised to balance
the "magnitude of harm" to a copyright owner against the burden on a service
provider, the technical feasibility and efficiency of an injunction, and the
availability of less burdensome and comparably effective means of blocking
access to illegal material.
Finally, the statute provides that nothing in its language should condone
invasion of users' privacy by service providers in the process of monitoring for
potential copyright violations.[54]
Part III. Legislative History of the provision: evolution of the knowledge
standard
a) The White Paper and 104th Congress
The initiative in "fine-tuning" copyright law to the realities of the digital
world belonged to President Bill Clinton's administration, which, in 1993,
organized a task force on the National Information Infrastructure headed by
Commissioner of Patents and Trademarks, Bruce Lehman. After numerous public
hearings and consultations with 22 federal agencies, the task force came up with
a 250-page report, the White Paper on Intellectual Property and the National
Information Infrastructure.[55] Addressing the issue of ISPs liability, the
report concluded that ISPs should be treated like other distributors under
copyright law and that they should be held strictly liable for copyright
violations of their users.[56] The report did not recommend any changes to
copyright law in regard to ISPs' liability, because, according to the report,
existing copyright law could be applied effectively to the Internet.[57]
However, when Senator Orrin Hatch and Representative Carlos Moorehead
introduced bills based on the White Paper's recommendations, ISPs and telephone
companies immediately criticized them for not addressing the issues of ISPs
liability.[58] The bills would have extended the copyright owner's exclusive
distribution right to include the right to transmission.[59] ISPs argued that,
under the proposed legislation, they would be exposed to strict copyright
liability each time their users send infringing materials via their
networks.[60]
For example, Rep. Rick Boucher, a member of both House Committee on the
Judiciary and House Committee on Commerce, argued during the hearings that
Congress should provide ISPs with an incentive to invest in the development of
computer networks without fear of litigation. Boucher stressed importance of
balancing the interests of copyright owners on one hand with the ability of ISPs
to thrive on the other.[61]
During the House hearings, representatives of service providers, such as
America Online, Compuserve, and Prodigy, also argued that exposure to strict
liability would make them monitor transmissions of subscribers in attempt to
detect infringing content.[62] This, in turn, could violate First Amendment
rights and invade the privacy of Internet users. In addition, they argued, it is
impossible to detect all copyright violations on their networks.[63]
ISPs argued that Congress should either immunize them from liability
altogether, or hold them responsible for copyright violations of their users
only when they have actual knowledge of these violations.[64] This actual
knowledge standard could be fulfilled by requiring a copyright owner to notify
an ISP of copyright infringements taking place on its network.
On the contrary, copyright owners argued that exempting ISPs from strict
copyright liability would encourage them to turn a blind eye to online
violations and would discourage them from cooperating with copyright owners in
detecting illegal conduct.[65]
Because of the sharp disagreements among copyright owners and ISPs, the NII
Copyright Protection Act was not reported from either House or Senate
subcommittees. However, Congress decided to engage the disputing parties in the
negotiation process under the supervision of Rep. Bob Goodlatte. Goodlatte
called for industry negotiations at one of the hearings saying, "This
subcommittee [on Courts and Intellectual Property] has a history of preferring
that commercial disputes be resolved between the parties rather than through the
legislative process, which may favor one interest group over another."[66]
b) WIPO treaties and 105th Congress
In the period between 104th and 105th Congresses, the United States became a
party to two international copyright treaties signed in Geneva at the World
Intellectual Property Organization's (WIPO) conference in December 1996.[67] The
treaties did not address specifically the issues of ISPs' legal liability for
copyright violations of their users.[68] However, the WIPO Copyright treaty did
include the agreed statement, "the mere provision of physical facilities for
enabling or making a communication does not in itself amount to communication
within the meaning of this treaty or the Berne Convention."[69] Thus, the
international copyright organization let the individual countries establish
their own national standards for ISPs' liability under copyright law.
During the first session of the 105th Congress, several congressmen introduced
bills to implement the WIPO treaties in the United States. Two bills, introduced
by Senator John Ashcroft and Rep. Howard Coble, addressed the issues of ISPs'
copyright liability.
Senate bill 1146, Digital Copyright Clarification and Technology Education Act,
sought to shield ISPs from direct, vicarious and contributory liability when
they performed two types of functions: transmission[70] and provision of space
for material temporarily residing on a system or network.[71] The bill would
cover services such as e-mail, real-time chat, provision of server space for
personal web pages, and online navigational aids. The bill would impose
liability on ISPs for copyright violation of their users only if they received a
notification from a copyright owner about illegal acts on their networks and
failed to remove the allegedly infringing material. The bill, thus, introduced
the standard of actual knowledge for ISPs.
However, during the hearings Senator Orrin Hatch, chairman of the Judiciary
Committee, stressed that the actual knowledge requirement may not provide an
incentive for ISPs to cooperate with content providers in taking down the
pirated sites.[72]
Another bill addressing the issues of ISP liability (House bill 2180), would
have added additional criteria for determining direct and vicarious liability of
ISPs, including the knowledge requirement. The knowledge requirement, proposed
in the bill, would shield an ISP from copyright liability if it "does not know,
and is not aware by notice or other information indicating, that the material is
infringing."[73] Rep. Howard Coble, sponsor of the bill, explained that this
provision introduced an intermediate knowledge standard -- something between the
actual knowledge and a general standard of negligence.[74] According to Coble,
this intermediate knowledge standard was based on the concept of "red flags" --
facts, which, even in the absence of notification from a copyright owner,
indicate existence of copyright violations.[75]
However, during the hearings held by the House Judiciary Committee,
representatives of ISPs and telephone companies criticized this intermediate
standard of knowledge as imposing "horrendous liability on carriers, on
telephone companies and ISPs."[76] Rep. Boucher once again spoke in favor of the
actual knowledge requirement and mandatory notice and take-down procedure.[77]
However, the Register of Copyrights, Marybeth Peters, said that such a
requirement would violate the provisions of the Berne Convention and the TRIPS
agreement[78] against imposition of formalities on copyright owners.[79]
Rep. Howard Berman best summarized the gist of the dispute about a knowledge
standard for ISPs. Berman suggested that a compromise should be found in
establishing an intermediate knowledge standard, "The answer is somewhere
between the conduit, who everybody agrees should not be liable, and... something
less than actual knowledge."[80]
In February 1997, after several months of negotiations between ISPs and
copyright owners, Rep. Coble re-introduced the Online Copyright Infringement
Liability Limitation Act as House bill 3209, which replaced earlier House bill
2180. The new bill sought to shield ISPs from direct liability for copyright
violations occurring in the process of intermediate storage and transmission
over their networks. In addition, the bill provided that an ISP should not be
liable for monetary damages for contributory or vicarious infringement, when
(among other conditions), an ISP "does not know and is not aware of information
indicating that the material is infringing." As Coble noted in his introductory
remarks, the knowledge requirement in House bill 3209 was "nearly identical" to
that used in House bill 2180.[81]
Coble explained that "information indicating that the material is infringing"
would include "a notice or any other 'red flag' -- information of any kind that
a reasonable person would rely upon."[82] Such information, he wrote, would
include the absence of digital watermark or other copyright management
information. Coble stressed that the bill would not impose on ISPs any
affirmative duty to seek out copyright violations online.
In his introductory remarks, Coble wrote that he intended to codify the court's
decision in RTC v. Netcom[83] as establishing the liability standards for ISPs.
Coble also stressed that the bill intended to overturn the court's holding in
Playboy Enterprises v. Frena,[84] "inasmuch as that case might apply to service
providers, suggesting that such acts could constitute direct infringement."[85]
The debate surrounding the ISP liability issue culminated on March 31, 1998,
with an agreement between copyright owners and ISPs.[86] The next day, the House
incorporated this agreement into House bill 2281 (which included House bill
3209).[87] A month later, the Senate adopted the same language in the companion
bill 2037, introduced by Senator Orrin Hatch.[88]
The industry agreement shielded ISPs, under certain conditions, from all types
of liability and monetary damages for digital network communications and system
caching.[89] It also defined a new standard of knowledge in regard to two other
types of functions: temporary storage of information on networks and information
location tools. The new knowledge requirement provided that an ISP should not be
held liable for certain activities if it "does not have actual knowledge that
the material or activity is infringing, and in the absence of such actual
knowledge, is not aware of facts or circumstances from which infringing activity
is apparent."[90] According to the agreement, ISPs that become aware of such
facts or circumstances, have an obligation to take down allegedly infringing
material -- otherwise, they lose protection of the "safe harbors." Both House
and Senate accepted this standard of knowledge and awareness without
modifications, and it became law in October 1998, when President Clinton signed
into law the Digital Millennium Copyright Act.[91]
In the report of the House Judiciary Committee issued in May 1998, House
members explained that the new knowledge and awareness standard created a
so-called "red-flag" test. The report defined a "red flag" as "information of
any kind that a reasonable person would rely upon."[92] According to the report,
examples of "red flags" would include the absence of digital watermarks or other
copyright management information.[93] Members of the House Judiciary Committee
stressed that the newly created knowledge requirement differed from existing
law, "under which a defendant may be liable for contributory infringement if it
knows or should have known that material was infringing."[94]
Two months later, the House Committee on Commerce issued its own report on the
Digital Millennium Copyright Act. The section of the report explaining the "red
flag" test reiterated the key points from the report prepared by the House
Judiciary Committee. The members of the House Commerce Committee defined the
"red flag" test in the following way: "whether infringing activity would have
been apparent to a reasonable person under the same or similar
circumstances."[95] In addition, they explained that the "red flag" test
combined two elements -- objective and subjective.[96] The report advised that,
in determining whether an ISP was aware of a "red flag," courts should look into
the "subjective awareness of the service provider of the facts or circumstances
in question."[97] However, the report continued, in deciding whether those facts
or circumstances constitute a "red flag," courts should apply an objective
standard. Members of the House Commerce Committee did not clarify the
distinction between the objective and subjective tests that courts should apply
in determining whether an ISP was aware of a copyright violation.
The report prepared by the Senate Judiciary Committee in May 1998, described
the "red flag" test in terms similar to those used by the House Commerce
Committee. Senate members clarified that the new test did not create an
affirmative obligation on part of an ISP to monitor its networks or to seek out
copyright violations.[98] However, if a provider becomes aware of a "red flag,"
it will lose the "safe harbor" protection unless it takes steps to remove an
infringing content off-line.
In October 1998, members of the House and Senate met in a conference committee
and prepared a Conference report on the Digital Millennium Act.[99] Members of
the conference committee stressed that the new liability standard for ISPs was
designed with the view to preserve "strong incentives for service providers and
copyright owners to cooperate to detect and deal with copyright infringements
that take place in the digital networked environment."[100] The only
disagreement between the two houses on the limitation of liability provisions
concerned the standards of liability for non-profit educational institutions in
their capacity as service providers. The House version of the bill would have
relieved institutions from certain types of liability when they passively
transmit communications initiated by a student or a faculty member.[101] The
Senate version of the bill would have required the Register of Copyrights to
consult with representatives of copyright owners and educational institutions
and to submit to the Congress recommendations regarding the liability of
institutions for third-party copyright violations.[102]
In the process of negotiating the bill's provisions, the two houses agreed on a
different knowledge standard for educational institutions.[103] Members of
Congress made it very difficult to sue institutions for online copyright
violations committed by their faculty and graduate students. The bill provided
that educational institutions would be presumed to know about third-party
violations only if infringing materials were a part of the required course list
for the class taught at an institution for the past three years; and if the
institution received more than two notifications of copyright violations and
failed to act on them.[104]
Part IV: How courts should interpret the new knowledge requirement
The new definition of the knowledge standard is at best vague. The phrase,
"facts and circumstances, from which copyright infringement is apparent," gives
courts the discretion to decide what they consider "apparent" violations of
copyright on Internet networks.
For example, when compilers of Internet directories come across a fan site with
a large picture of the Star Trek starship, should they consider it an "apparent"
copyright infringement and block access to the site? This violation would
probably be "apparent" to Viacom and Paramount Pictures, which produced the Star
Trek series. However, should an ISP be expected to know a copyright violation,
when it sees it?
When the language of the statute is not plain on its face, courts often turn to
the statute's legislative history to determine the purposes of its enactment and
particular activities targeted by the legislation.[105] The following section
argues for narrow judicial construction of the new knowledge and awareness
standard set by Congress for ISPs in copyright infringement suits. The key tools
of statutory construction are, in the order of their importance: language,
structure, and legislative history of the statute.[106] The argument follows
this order by, first, analyzing the "plain language" of the new knowledge
provision, then by comparing it to other parts of the same statute. The last two
arguments are based on the use of the statute's legislative history.
1) Provision should be construed in light of the language rejected or modified
by Congress
The new "knowledge and awareness" standard should be construed in comparison
with other language considered and rejected by Congress in the process of
drafting the statute. For example, Congress did not endorse the language of
House bills 2180 and 3209 which defined the knowledge requirement as
"information indicating that the material is infringing."[107] During the House
hearings, witnesses testified that this language is too broad and unspecified
and, as a result, could expose ISPs to a "horrendous liability."[108]
At the same time, the enacted awareness standard falls short of the actual
knowledge requirement introduced in the Senate bill 1146. The latter provided
that ISPs should be required to take down certain materials only when they are
notified of an alleged violation by a copyright owner.[109] This proposal was
rejected because copyright owners were concerned that it would encourage ISPs to
turn a blind eye to copyright violations on their networks.[110]
In addition, members of the House and Senate distinguished the new awareness
standard from the knowledge standard applied previously by the courts. In cases
of contributory infringement, courts applied the test of constructive knowledge:
whether a person knows or should have known about illegal activities.[111] Thus,
the constructive knowledge test involves the element of inference -- "a process
of reasoning by which a fact or proposition... is deduced as a logical
consequence from other facts."[112] In other words, the constructive knowledge
standard does not necessarily require direct evidence of a copyright violation.
On the contrary, the term "apparent" used in the new statute, means "manifest,"
"open to view," "plain."[113] Therefore, it can be argued that, unlike the test
of constructive knowledge, the requirement to be aware of "apparent" copyright
violations does not involve the element of logical deduction or inference on
part of an ISP. Under the new law, to imply knowledge or awareness on the part
of a service provider, a fact of infringement should be "plain" and "manifest"
to any reasonable person.
In fact, congressmen provided examples of when application of the new awareness
standard would be appropriate. For example, the section-by-section analysis of
the statute performed by the House Committee on the Judiciary states that
copyright violations would be apparent from the use of words such as "pirate,"
"bootleg," or similar slang terms in the Internet addresses of certain web
sites.[114]
The analysis of the statutory language, thus, demonstrates that the new
knowledge and awareness standard is less stringent that the standard of actual
knowledge. However, it is more difficult to prove than the standard of
constructive knowledge, applied previously by the courts. Congress intended the
new knowledge standard to be applied only under very specific circumstances,
where there could be no reasonable doubt as to the illegal character of the
activities.
2) Structural analysis: Congress intended courts to construe narrowly those
statutory provisions that impose burdens on ISPs
When the language of the statute leaves doubts about the way a certain
provision should be interpreted, courts often turn to the statute's overall
structure. It can be argued that the new knowledge and awareness standard calls
for narrow interpretation because Congress intended courts to interpret narrowly
other provisions of the same statute. Examples of such narrow construction
include the knowledge standard for nonprofit educational institutions,[115] the
concept of "direct financial benefit" attributable to infringing
activities,[116] imposition of injunctions on ISPs,[117] and the requirement
that ISPs must release to copyright owners information about their subscribers
when issued a subpoena.[118]
During the conference proceedings, congressmen designed a provision addressing
the liability of nonprofit educational institutions, in their capacity as
service providers, for copyright violations committed by their faculty and
graduate students. The statute provides that an institution would be held liable
for third-party violations only a) if the illegal materials were required or
recommended for a course taught at a university during the preceding three
years,
b) if the institution during these three years has received more than two
notifications of a copyright violation and failed to act on them.[119]
This provision makes it very hard to sue a nonprofit educational institution
for a copyright infringement by one of its employees. First of all, it takes
more than two valid notifications from a copyright owner informing the
institution of alleged copyright violations. Second, the course for which
illegal materials were used must be taught for at least three years. Third, in
the conference report Congress defined "required or recommended" materials very
narrowly, as "instructional materials that have been formally and specifically
identified in a list of course materials that is provided to all students
enrolled in the course for credits."[120] For example, this definition would not
include materials distributed by a professor or a graduate student once an
academic semester has started, or posted on a class web site without being
formally included on a list of required readings.
Therefore, for an institution to become liable for third-party violations, it
has to blatantly ignore the facts of copyright infringement identified at least
twice, in good faith, by copyright owners.
Another concept that requires a narrow judicial construction is that of "a
financial benefit directly attributable to the infringing activity."[121] Some
legal scholars interpreted the California federal district court's decision in
Fonovisa Inc. v. Cherry Auction, Inc.[122] as exposing ISPs to vicarious
liability for illegal activities of their users, because they derive financial
benefit from the monthly subscription fees.[123] In addition, infringing
activities arguably may attract new subscribers to ISPs.
Addressing these concerns, the report of the House Committee on Commerce
advised courts to take a "common-sense, fact-based" approach to the requirement
of direct financial benefit from infringing activities.[124] The report stressed
that a "direct benefit" concept would not include one-time set-up fees and flat
periodic payment or fees based on the length of a message. According to the
report, courts should apply the concept of direct financial benefit only in the
circumstances where, "the value of the service lies in providing access to
infringing materials."[125]
Therefore, the concept of a direct financial benefit, as explained by Congress,
would apply only to pirate directories which make their revenue by providing
access to unauthorized materials online. At the same time, the concept of direct
financial benefit would not apply to an ISP that has at least some subscribers
who engage in legal activities.
Another example of the statute's provision that calls for narrow judicial
construction is the disclosure of information about an alleged infringer by a
service provider, who received a subpoena.[126] The report of the House Commerce
Committee explained that such disclosure should be interpreted as "requiring
disclosure of information in the possession of the service provider, rather than
obliging the service provider to conduct searches for information that is
available from other systems or networks."[127] In other words, Congress
instructed courts to construe the disclosure provision narrowly, without
imposing extra-burdens on ISPs.
The provision establishing standards for injunctions against ISPs is yet
another example of the legislative intent to interpret narrowly some of the
statute's provisions.[128] The statute instructs courts to consider several
criteria before issuing injunctions against ISPs. In particular, courts should
consider if an injunction balances the "magnitude of harm" to a copyright owner
against considerations of burden on an ISP, technological feasibility and
effectiveness of injunctions and availability of other, less burdensome and
effective means of preventing access to illegal materials.
By imposing specific restrictions on issuance of injunctions against ISPs by
courts, Congress demonstrated that injunctive relief should be used very
sparingly, as the last recourse.
The above examples illustrate that Congress wanted courts to construe narrowly
those statutory provisions that impose burdens on ISPs.
3) The purpose of the new statute is to encourage ISPs to invest in the Internet
development by limiting their vulnerability to copyright litigation
One of the main purposes in limiting ISPs liability for third-party
infringements was to encourage economic growth and technological development of
the Internet. Congressmen realized that ISPs should not fear creating new
services and continuing to invest in the development of digital networks. For
example, the House Committee on Commerce stressed in its report the importance
of balancing the interests of copyright owners, Internet providers and Internet
users to "foster the continued development of electronic commerce and the growth
of the Internet."[129]
Senator Hatch expressed the same idea speaking on the Senate floor before the
passage of the conference report, "The OSPs [online service providers] and ISPs
need more certainty in this area in order to attract the substantial investments
necessary to continue the expansion and upgrading of the Internet."[130]
One of the ways to encourage activities of ISPs is to limit their exposure to
strict liability under copyright law. On numerous occasions, members of House
and Senate stressed that the new statute is designed to clarify provisions of
copyright law and to provide greater certainty for service providers as to their
duties and rights in the digital environment.[131]
The report of the House Committee on Commerce specifically addressed the issue
of potential exposure to copyright liability of information location tools
including Internet directories such as Yahoo! The report stressed that further
development of navigational tools is "essential to the development of the
Internet; without them [information location tools], users would not be able to
find the information they need."[132] Congressmen wrote that online catalogers
should not be penalized for exercising "the human judgment and editorial
discretion" by being subject to copyright liability whenever they come across a
site that might be infringing. According to the report, liability should not
attach to a directory provider for simply seeing, during a brief cataloguing
visit, several "well known photographs of a celebrity at a site devoted to that
person."[133] The report stated that ISPs can not be expected to know whether
the image is still copyrighted or in a public domain, whether it is licensed or
used under the fair use doctrine.
Congressmen realized that if the knowledge of copyright infringements is
imputed to an online cataloguer every time he or she comes across a questionable
content, ISPs would have little incentive to use man-made online directories or
would extensively censor online speech. For example, the House Commerce
Committee report stated: "The knowledge or awareness standard should not be
applied in a manner which would create a disincentive to the development of
directories which involve human intervention."[134]
Therefore, one of the key purposes in enacting the ISP liability limitation
statute was to encourage development of the online services by shielding them
from extensive litigation.
4) By limiting ISPs liability, Congress intended to place primary responsibility
in detecting copyright violations on copyright owners
Members of Congress wanted to make certain that responsibility of fighting
online copyright violations would be distributed fairly among copyright owners
and ISPs.[135] Many congressional discussions stressed that service and content
providers have a common interest in developing the full potential of the
Internet and, thus, should share responsibility for detecting copyright abuses.
For example, the conference report describes the purpose of the liability
provisions as preserving "incentives for service providers and copyright owners
to cooperate to detect and deal with copyright infringements that take place in
the digital networked environment."[136]
However, Congress decided that it should be the primary responsibility of
copyright owners to police the net for potential copyright violations because
they are in the best position to make well-informed judgments whether a certain
use constitutes a copyright violation. For example, the report of the House
Commerce Committee states that ISPs can not be expected to know whether a
certain use is licensed or allowed under the fair use doctrine.[137]
In fact, Congress went in great lengths to make clear that only "obvious"
violations would imply "awareness" on the part of an ISP. For instance, the
House Judiciary Committee explained that under the new knowledge requirement, an
ISP "would not qualify for the safe harbor if it turned a blind eye to 'red
flags' of obvious infringement."[138] Examples of "obvious" violations would
include pirate directories containing links to big volumes of unauthorized
materials, such as copyrighted audio and video clips.[139]
Congress carefully designed the statute to make sure that the key
responsibility in resolving copyright disputes lies with copyright owners and
Internet users. For example, the statute provides for the notification procedure
when a copyright owner lets an ISP know about potential copyright violations on
its network.[140] In order to be actionable, a notification should contain a
copyright owner's good-faith statement that a violation occurred.
In addition, the statute provides for the procedure of a counter notification,
allowing an Internet user to disagree with the copyright owner's claims.[141]
Both notification and counter notification procedures were designed to make
certain that the primary responsibility in resolving difficult issues of
copyright law lies with the parties best suited to address them -- copyright
owners and alleged infringers.
The role of ISPs, on the contrary, is to educate their subscribers by
implementing a copyright policy.[142] Such policy would warn Internet users that
in case they violate copyright law, their materials would be taken down by ISPs.
Conclusion
The language of the statute, its structure and basic purposes indicate that
Congress recognized the important role played by ISPs in the development of the
online infrastructure and tried to ensure that measures restricting their
operation would be used sparingly.
In particular, the new knowledge and awareness standard articulated in the
Online Copyright Infringement Liability Limitation Act should be construed
narrowly by courts. Otherwise, ISPs would have an incentive to restrict more
online speech than necessary for enforcing copyright law on the Internet. For
example, online catalogers should not be expected to detect copyright violation
simply by visiting web sites with the posted celebrity photos or images of
famous cartoon characters. As long as there is a reasonable element of doubt
whether a certain use is licensed or excused under the fair use doctrine, ISPs
should not take the material down.
The legislative history of the statute shows that Congress intended the new
awareness requirement to apply under very narrow, specific circumstances. For
example, when web sites contain words such as "pirate" and "bootleg." The
language and structure of the statute also indicate that the primary
responsibility in detecting copyright violations online lies with copyright
owners.
[1] Iris Murdoch is a famous 20th century British novelist
[2] PL 105-304, Digital Millennium Copyright Act of 1998, Title II, 105th Cong.
(1998)
[3] PL 105-304, Title II, Sec. 202, sec. 512(c)(1)(ii) and (d)(1)(B).
[4] U.S. Constitution, Art.1, Sec. 8, clause 8.
[5] 17 U.S.C. 106
[6] The concept of liability is defined as "any legal obligation,
responsibility, or duty;" "a condition of being responsible for a possible or
actual loss, penalty, evil, expense, or burden." BLACK'S LAW DICTIONARY 914 (6th
ed. 1990).
[7] However, courts may consider the innocent character of a violation in
assessing punitive damages.
[8] For example, in Smith v. California, 361 U.S. 147 (1959), the Supreme Court
invalidated on the First Amendment grounds a Los Angeles city ordinance which
imposed strict criminal liability on a retail bookseller for possession of an
obscene book. The Court held that the ordinance, which did not consider the
element of scienter (distributor's knowledge of the contents of a book),
inhibited freedom of expression by forcing booksellers to inspect the contents
of all reading materials they carry.
[9] For example, in Cubby, Inc. v. Compuserve, 776 F.Supp.135 (S.D.N.Y. 1991),
the New York federal district court found a service provider not liable for
allegedly defamatory statements posted by its independent contractor, because,
the court said, Compuserve performed the role of a traditional news vendor.
[10] See Deamland Ball Room v. Shapiro, Bernstein & Co., 36 F. 2d. 354 (7th Cir.
1929)
[11] PAUL GOLDSTEIN, COPYRIGHT 6:7 (2d ed. 1998)
[12] See RCA Records v. All-Fast Systems, Inc., 594 F.Supp. 335 (E.D.N.Y. 1984)
[13] Playboy v. Frena, 839 F.Supp. 1552 (M.D. Fla. 1993)
[14] "Absent clear lines of liability, service providers may have no practical
defense to crippling damages but the invasive monitoring and supervision of
their subscribers' private communications." NII Act of 1995: Hearing Before the
Senate Comm. on the Judiciary, 104th Cong. (1996) at 48 (testimony of Robert
Oakley, Digital Future Coalition).
[15] See Report on H.R. 2281 by the House Comm. on the Judiciary, Rept. 105-551,
Part 1, 105th Cong., 2d Session (1998) at 26 (stressing that the new statute
does not require ISPs to access, remove or disable access to material if in
violation of the Electronic Communications Privacy Act).
[16] Religious Technology Center v. Netcom Online Communications, 907 F.Supp.
1361 (N.D. Cal. 1995)
[17] Gershwin Publishing Corp. v. Columbia Artists Management, Inc., 443 F. 2d
1159, at 1162 (2d Cir. 1971) (quoted in RTC v. Netcom)
[18] See statement of Edward Murphy of National Music Publishers' Association in
NII Act of 1995: Hearings on H.R. 2441 Before the Subcomm. on Courts and
Intellectual Property of the House Comm. on the Judiciary, 104th Cong. (1995) at
35.
[19] Jane Ginsburg, Putting Cars on the "Information Superhighway," 95 COLUM. L.
REV. 1466 (1996)
[20] Niva Elkin-Koren, Copyright Law and Social Dialogue on the Internet, 13
CARDOZO ARTS & ENT'T L.REV. 345 (1995)
[21] Pamela Samuelson, The Copyright Grab, WIRED 4.01 (Jan. 1996)
[22] Mary Ann Shulman, Internet Copyright Infringement Liability: Is Online
Access Provider More Like a Landlord or a Dance Hall Operator?" 27 GOLDEN GATE
UNIV. L.REV. 555 (1997)
[23] Georgio Bovenzi, Liabilities of System Operators on the Internet, 11
BERKELEY TECH. L.J. (1996)
[24] See also Wendy Melone, Note: Contributory Liability for Access Providers:
Solving the Conundrum Digitalization Has Placed on Copyright Laws, 49 FED. COM.
L.J. 491 (1997) (suggesting that copyright owners should be required to notify
ISPs of copyright violations on their networks)
[25] PL 105-304, Title II, 105th Cong (1998)
[26] PL 105-304, 105th Cong. (1998)
[27] The term "service provider" is generally defined as "a provider of online
services or network access, or the operator of facilities thereof." For example,
this broad definition would include providers of Internet access, commercial
online services, and operators of individual computer bulletin boards (BBS).
The Act also provides an additional, more narrow definition of a service
provider which applies only to the subsection covering transitory digital
network communications. For the purposes of this subsection, a service provider
is defined as "an entity offering the transmission, routing, or providing of
connections for digital online communications, between or among points specified
by a user, of material of the user's choosing, without modification to the
content of the material as sent or received." In order to qualify for this
definition, a service provider must perform a passive role of a conduit -- for
instance, to provide e-mail service, or mailing lists (Listserv).
[28] The concept of "transitory digital network communications" describes the
process of "moving packets of information across digital networks," such as
forwarding e-mail traffic or routing messages to a mailing list agent
(Listserv). Section-by-Section Analysis of H.R. 2281 by the House Comm. on the
Judiciary, Comm. Print Serial No.6, 105th Cong. (September 1998), at 26.
[29] System caching is a technique employed by ISPs to speed up public access to
popular web sites. When a user requests access to a certain web site, a local
Internet server automatically makes a temporary copy of the requested file. This
is done in case other users from the same area would want to visit this
particular site. In this case, they will access it from the local server instead
of re-calling the site from possibly thousands of miles away. See Information
Resource Caching FAQ at <http://www.ircache.net/Cache/FAQ> (visited March 28,
1999)
[30] Examples of such storage include "providing server space for a user's web
page, for a chatroom, or other forum in which material may be posted at the
direction of users." Section-by-Section Analysis of H.R. 2281 by the House Comm.
on the Judiciary, Comm. Print Serial No.6, 105th Cong. (September 1998), at 28.
[31] The term "information location tools" refers to directories of online
sites, search engines, lists of recommended sites, hyperlinks. Id. at 32.
[32] PL 105-304, Title II, Sec. 202, sec. 512 (c)(2)
[33] PL 105-304, Title II, Sec. 202, sec. 512 (i)(A). Members of the House
Committee on Commerce described the goals of a copyright policy in the following
way, "those who repeatedly or flagrantly abuse their access to the Internet
through disrespect for the intellectual property rights of others should know
that there is a realistic threat of losing that access." Digital Millennium
Copyright Act of 1998, Report on H.R. 2281 of the House Comm. on Commerce, Rept.
105-551, Part 2, 105th Cong., 2d Session (1998) at 61.
[34] PL 105-304, Title II, Sec. 202, sec. 512 (i)(1)(B)
[35] See Report on H.R. 2281 of the House Committee on Commerce, Rept. 105-551,
Part 2, 105th Cong. 2d Session (1998) at 61; Also see Section-by-Section
Analysis of H.R.2281 by House Comm. on the Judiciary, Serial No. 6, 105th Cong.,
2d Session (1998) at 37 (stressing that technology is likely to provide
solutions to many issues facing copyright owners and ISPs).
[36] PL 105-304, Title II, Sec. 202, sec. 512 (i)(2)(A)
[37] See Report on H.R. 2281 of the House Committee on Commerce, Rept. 105-551,
Part 2, 105th Cong. 2d Session (1998) at 61-62.
[38] See Report on H.R. 2281 of the House Comm. on the Judiciary, Rept. 105-551,
Part 1, 105th Cong., 2d Session (1998) at 26. "The exemption and limitations
provided in this subsection are affirmative defenses, like the exceptions and
limitations established elsewhere in title 17."
[39] PL 105-304, Title II, Sec. 202, sec. 512 (k)(1)
[40] See Report on H.R. 2281 of the House Comm. on Commerce, Rept. 105-551, Part
2, 105th Cong. 2d Session (1998) at 63 (stressing that the definition of a
service provider for purposes of subsection (a) reflected the fact that the
"functions covered by new subsection (a) are essentially conduit-only
functions.")
[41] 17 U.S.C. Sec. 111 (a)(3). Activities of passive carriers should be limited
to "providing wires, cables, or other communications channels for the use of
others."
[42] PL 105-304, Title II, Sec. 202, sec. 512 (a)(1-5)
[43] PL 105-304, Title II, Sec. 202, sec. 512 (b)(2)
[44] PL 105-304, Title II, Sec. 202, sec. 512 (b)(2)(E)
[45] PL 105-304, Title II, Sec. 202, sec. 512(c)(1)(ii) and (d)(1)(B)
[46] PL 105-304, Title II, Sec. 202, sec. 512 (e)
[47] PL 105-304, Title II, Sec. 202, sec. 512 (c)(3)
[48] PL 105-304, Title II, Sec. 202, sec. 512 (g)(3)
[49] PL 105-304, Title II, Sec. 202, sec. 512 (g)(1)
[50] PL 105-304, Title II, Sec. 202, sec. 512 (h)
[51] See Report on HR 2281 of the House Comm. on Commerce, Rept. 105-551, Part
2, 105th Cong. 2d Session (1998) at 61.
[52] PL 105-304, Title II, Sec. 202, sec. 512 (j)
[53] Courts are also allowed to order other types of injunctive relief as long
as they are "the least burdensome to the service provider among the forms of
relief comparably effective for that purpose [restraining infringement of
copyrighted material.]"
[54] PL 105-304, Title II, Sec. 202, sec. 512 (m)
[55] Bruce Lehman (ed.), Intellectual Property and the National Information
Infrastructure: The Report of the Working Group on Intellectual Property Rights,
Washington, D.C.: Information Infrastructure Task Force, September 1995.
[56] "With respect to the allowance of uploading of material by their
subscribers, they [ISPs] are, in essence, acting as an electronic publisher."
Id. at 122.
[57] According to the report, Copyright Act of 1976 was "fundamentally adequate
and effective" in addressing the new realities of the digital age. Id. at 212.
[58] H.R. 2441 and S. 1284, 104th Cong. (1995)
[59] Id. Sec. 2(a)
[60] "The main problem... is a pressure to shift the enforcement responsibility
and burden away from copyright owners... and toward service providers by deeming
them violators of the copyright laws essentially, simply by virtue of their
presence in the digital infrastructure." NII Copyright Protection Act of 1995:
Hearings on H.R. 2441 Before the Subcomm. on Courts and Intellectual Property of
the House Comm. on the Judiciary, 104th Cong. (1995) (testimony of Stephen
Heaton, general counsel for Compuserve, Inc.) at 234.
[61] See NII Copyright Protection Act of 1995: Joint Hearing on H.R. 2441 and S.
1284 Before the Subcomm. on Courts and Intellectual Property of the House Comm.
on the Judiciary and the Senate Comm. on the Judiciary, 104th Cong. (1995) at
80.
[62] "Service providers must not be required to 'police' or 'monitor'
transmissions." NII Act of 1995: Hearing on S.1284 Before the Senate Comm. on
the Judiciary, 104th Cong. (1996) at 38 (written statement of William
Burrington, American Online Inc.)
[63] The argument of ISPs was well summarized by Rep. Boucher, who said, "With
transmissions literally numbering in the tens of thousands on a daily basis for
a given service, that expectation of monitoring is clearly unrealistic." NII
Copyright Protection Act of 1995: Hearings on H.R. 2441 Before the Subcomm. on
Courts and Intellectual Property of the House Comm. on the Judiciary, 104th
Cong. (1995) at 17.
[64] "Because providers do not know the contents of the message they are
transmitting or distributing on a real-time basis, they are unable to use
content as a basis for limiting users' access to their systems unless they have
actual knowledge that the material is indeed infringing..." (testimony of
Stephen Heaton, general counsel to Compuserve, Inc). Id. at 235.
[65] "If an 'actual knowledge' standard advocated by others is allowed to
establish a safe haven from the liability for infringements, we fear the
creation of an online environment in which ignorance is bliss." (testimony of
Edward Murphy, president of National Music Publishers' Association). Id at 35.
[66] Id at 20.
[67] WIPO Copyright Treaty and WIPO Performances and Phonograms Treaty (1996):
Message from the President of the United States, Treaty Doc. 105-17, 105 Cong.
(1997). The United States signed both treaties on April 12, 1997.
[68] For full discussion of the WIPO conference and treaties, see Pamela
Samuelson, The Digital Agenda of the WIPO: The US Agenda at WIPO, 37 VA. J.
INT'L L. 369 (1997). Samuelson writes that there is no international consensus
on the issue whether intermediate copying in computer's memory violates
exclusive reproduction rights of copyright owners.
[69] WIPO Copyright Treaty
[70] Transmission included three types of services: transmission of electronic
communications (e-mail), provision of real-time services (real-time chat), and
supply of information navigational tools (online directories and indexes).
S.1146, 105th Cong. (1997) Sec. 512 (a).
[71] S. 1146, 105th Cong. (1997), Sec. 512 (b).
[72] "It seems to me that the content providers make a valid point when they ask
what incentives the service providers will have to continue cooperating with
them to take down pirated sites. It seems realistic to assume that not all
service providers are as ethical or as upright as you folks represented here
today..." The Copyright Infringement Liability of Online and Internet Service
Providers: Hearing on S. 1146 Before the Senate Comm. on the Judiciary, 105th
Cong. (1997) at 41 (remarks of Senator Orrin Hatch).
[73] H.R. 2180, 105th Cong. (1997), Sec. 512 (a)(F)(i).
[74] The Online Copyright Liability Limitations Act: Introductory Remarks by
Hon. Howard Coble, Cong.Rec. E1452 (July 17, 1997), 105th Cong.
[75] Id.
[76] WIPO Copyright Treaties Implementation Act, and Online Copyright Liability
Limitation Act: Hearings on H.R. 2281 and H.R. 2280 Before the House Subcomm. on
Courts and Intellectual Property of the Comm. on the Judiciary, 105th Cong.
(1997) at 82 (testimony of Roy Neel, president of U.S. Telephone Association).
[77] "If the content provider knows that an infringement is taking place, the
avenue for obtaining relief should be to provide notice and a reasonable
opportunity for the OSP to take that information down... Under the bill as
drafted, OSP would be liable for third-party infringement in instances where
they have less than actual knowledge of the infringement... It should be
replaced by the actual knowledge standard." Id. at 29 (remarks of Rep. Boucher).
[78] The agreement on Trade-Related Aspects of Intellectual Property Rights
(TRIPS) is a part of the General Agreement on Tariffs and Trade (GATT), which
entered into force in January of 1995. TRIPS obliges World Trade Organization
members to comply with the 1971 Paris Text of the Berne Convention.
[79] WIPO Copyright Treaties Implementation Act, and Online Copyright Liability
Limitation Act: Hearings on H.R. 2281 and H.R. 2280 Before the House Subcomm. on
Courts and Intellectual Property of the Comm. on the Judiciary, 105th Cong.
(1997) at 58.
[80] Id. at 187.
[81] Introduction of the Online Copyright Infringement Liability Limitation Act:
Hon. Howard Coble, Cong. Rec. E160 (February 12, 1998), 105th Cong.
[82] Id.
[83] 907 F.Supp. 1361, (N.D.Cal. 1995)
[84] 839 F.Supp. 1552 (M.D.Fla. 1993)
[85] In Frena, the Florida district court held a BBS operator liable for illegal
acts of his users even in the absence of knowledge on the part of the operator,
who took infringing material off-line immediately after notification.
[86] Industry Groups Reach Accord on Online Copyright Liability Legislation, 55
PATENT, TRADEMARK & COPYRIGHT J. 557 (1998).
[87] Digital Millennium Copyright Act of 1998, H.R. 2281, 105th Cong. (1998),
Title II.
[88] Digital Millennium Copyright Act of 1998, S. 2037, 105th Cong. (1998),
Title II.
[89] Full text of agreement is published in 55 PATENT, TRADEMARK & COPYRIGHT J.
564 (1998).
[90] Id.
[91] Digital Millennium Copyright Act of 1998, PL 105-304, Title II, Sec. 202
(c)(i,ii, iii) and (d)(1)(A,B,C).
[92] WIPO Copyright Treaties Implementation Act and Online Copyright
Infringement Liability Limitation: Report on H.R. 2281 of the House Comm. on the
Judiciary, Rept. 105-551 (Part 1), 105th Cong. (May 22, 1998) at 25.
[93] Id. at 25.
[94] Id. at 25.
[95] Id. at 53.
[96] Digital Millennium Copyright Act of 1998: Report on H.R. 2281 of the House
Comm. on Commerce, Rept. 105-551 (Part 2), 105th Cong. (July 22, 1998).
[97] Id.
[98] The Digital Millennium Copyright Act of 1998: Report on S. 2037 of the
Senate Comm. on the Judiciary, Report 105-190, 105th Cong. (May 11, 1998).
[99] Digital Millennium Copyright Act of 1998: Conference Report on H.R. 2281,
Report 105-796, 105th Cong. (October 8, 1998).
[100] Id. at 72.
[101] See Section-by-Section Analysis of H.R. 2281 as Passed by the U.S. House
of Representatives on August 4, 1998, House Comm. on the Judiciary, Serial No.
6, 105th Cong., 2d Session (1998) at 28.
[102] The Digital Millennium Copyright Act of 1998: Report on S. 2037 of the
Senate Comm. on the Judiciary, Report 105-190, 105th Cong. (May 11, 1998) at 56.
[103] Digital Millennium Copyright Act of 1998: Conference Report on H.R. 2281,
Report 105-796, 105th Cong. (October 8, 1998) at 74-75.
[104] PL 105-304, Title II, Sec. 202, sec. 512 (e)
[105] See Cass Sunstein, Interpreting Statutes in the Regulatory State, 103
HARV. L. REV. 405, 416-417 (1989).
[106] Id. at 414.
[107] H.R. 2180, Sec. 512 (a)(1)(F)(i) and H.R. 3209, Sec. 512 (a)(3)(A), 105th
Cong.(1998)
[108] Hearing on H.R. 2281 and H.R. 2180 Before the Subcomm. on Courts and
Intellectual Property of the House Comm. on the Judiciary, 105th Cong. (1997) at
82 (testimony of Roy Neel)
[109] S. 1146, 105th Cong. , Title I, Sec. 102, sec. 512 (b)
[110] "Removing the possibility of liability would eliminate the incentive for
Internet access providers to help deter infringements. It would discourage them
from working with the creative community to combat online piracy. We need
cooperation, not immunity." Hearing on S.1146 Before the Senate Comm. on the
Judiciary, 105th Cong. at 15 (testimony of Cary Sherman, general counsel to
Recording Industry Association of America)
[111] See cases such as RTC v. Netcom, 907 F.Supp.1361 (N.D. Cal. 1995),
Marobie-FL, Inc. v. NAFED,
983 F.Supp. 1167 (N.D. Illinois 1997)
[112] BLACK'S LAW DICTIONARY 778 (6th ed. 1990)
[113] BLACK'S LAW DICTIONARY 96 (6th ed. 1990)
[114] Section-by-section Analysis of H.R.2281 as Passed by the United States
House of Representatives on August 4, 1998. House Committee on the Judiciary,
105th Cong. 2d Session (Comm. Print Serial No.6) at 33.
[115] The statutes defines the principles of copyright liability for nonprofit
educational institutions in Section (e). PL 105-304, Sec. 512 (e)
[116] The concept of a financial benefit directly attributable to infringing
activities originates in the theory of vicarious liability. According to this
theory, a person may be found responsible for illegal acts of others if he or
she derives financial benefit from illegal activities and has the right and
ability to control them. The new statute incorporates the element of direct
financial benefit in sections (c) and (d). PL 105-304, Sec. 512 (c)(1)(B) and
(d)(2).
[117] Title II of the Digital Millennium Copyright Act provides that copyright
owners may seek a limited injunctive relief against ISPs. PL 105-304, Sec. 512
(j) .
Injunction is a court order prohibiting someone from doing certain specified
acts. BLACK'S LAW DICTIONARY 784 (6th ed. 1990)
[118] Title II of the Digital Millennium Copyright Act provides that copyright
owners can request a federal district court to issue an ISP a subpoena,
requesting the release of information identifying an alleged infringer. PL
105-304, Sec. 512 (h)
[119] PL 105-304, Sec. 512 (e)
[120] Digital Millennium Copyright Act: Conference Report on H.R. 2281, Rept..
105-796, 105th Cong. 2d Session (1998) at 75.
[121] PL 105-304, Sec. 512 (c)(1)(C) and (d)(2). "Direct financial benefit" is
an element of the test for establishing vicarious liability.
[122] In Fonovisa, the Ninth Circuit Court of Appeals held a flea market
operator contributorily and vicariously liable for an independent vendor's sale
of bootleg recordings. The court decided that the flea market operator reaped
financial benefits from admission fees, parking fees, food and other service
expenses paid by customers, "who wanted to buy the counterfeit recordings at
bargain basement prices." 76 F. 3d 259 (9th Cir. 1996).
[123] See Mary Ann Shulman, Internet Copyright Infringement Liability: Is Online
Access Provider More Like a Landlord or a Dance Hall Operator? 27 GOLDEN GATE
UNIV. L.REV. 555 (1997)
[124] Digital Millennium Copyright Act of 1998: Report of the House Committee on
Commerce on H.R. 2281, Rept. 105-551, Part 2, 105th Cong. 2d Session (1998) at
54.
[125] Id.
[126] PL 105-304, Sec. 512 (h)
[127] Report on H.R. 2281 of the House Comm. on Commerce, Rept. 105-551, Part 2,
105th Cong. 2d Session (1998) at 61.
[128] PL 105-304, Sec. 512 (j)(2)
[129] Digital Millennium Copyright Act of 1998: Report of the House Committee on
Commerce on H.R. 2281, Rept. 105-551, Part 2, 105th Cong. 2d Session (1998) at
21.
[130] 144 Cong. Rec. S. 11889 (1998) (statement of Senator Hatch).
[131] See Conference Report: "Title II provides greater certainty to service
providers concerning their legal exposure for infringements that may occur in
the course of their activities." Report 105-796, 105th Cong. 2d Session (1998)
at 72.
[132] Report of the House Committee on Commerce on H.R. 2281, Rept. 105-551,
Part 2, 105th Cong. 2d Session (1998) at 58.
[133] Id at 57-58.
[134] Id.at 58,
[135] See remarks of Rep. Sonny Bono during the Hearings on H.R. 2441 Before the
House Subcomm. on Courts and Intellectual Property of the Comm. on the
Judiciary, 104th Cong. (1996) at 19.
[136] Conference Report on H.R. 2281, Report 105-796, 105th Cong. 2d Session
(1998) at 72.
[137] Report of the House Committee on Commerce on H.R. 2281, Rept. 105-551,
Part 2, 105th Cong. 2d Session (1998) at 58.
[138] Section-by-Section Analysis of H.R. 2281 as Passed by the House of
Representatives on August 4, 1998, Comm. on the Judiciary, Serial No. 6, 105th
Cong. 2d Session (1998) at 33.
[139] "Location was clearly, at the time the directory provider viewed it, a
"pirate site" of the type described below, where sound recordings, software,
movies, or books were available for unauthorized downloading, public
performance, or public display." Report on H.R. 2281 of the House Comm. on
Commerce, Rept. 105-551, Part 2, 105th Cong., 2d Session (1998) at 57.
[140] PL 105-304, Title II, Sec. 202, sec. 512 (c)(3)
[141] PL 105-304, Title II, Sec. 202, sec. 512 (g)(3)
[142] PL 105-304, Title II, Sec. 202, sec. 512 (i)(1)(A)
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