Glossary of Words and Phrases Relating to Internet Law

Interactive Online Entertainment Law

By:  Rob Hassett, Suellen W. Bergman and Lori M. Brill

 

Analog – derived from the word “analogous.” Applies in electronic transmission and storage of audio, visual and audio-visual works. The transmitted and/or stored version is similar to but not actually the same as the original. Quality degrades with serial copying.

Clickwrap – an agreement formed by a purchaser manifesting assent to the terms of an agreement online by pointing and clicking a mouse.

Cookies – small files that a Web site server places on a Web site users’ personal computer in which the Web site server stores its own information about the user which allows a Web site server to recognize the user and store the user’s preferences. Use of cookies can create privacy issues.

COPPA – Children’s Online Privacy Protection Act of 1998. The Act takes effect on April 21, 2000, and is not retroactive. According to Senator Richard Bryan (D –NV), who introduced the Act, the primary goals of the legislation are to enhance parental involvement in children’s online activities, maintain the security of personally identifiable information of children collected online, and protect children’s safety and privacy.

COPA – Child Online Protection Act. This was an anti-pornography act that was enacted by Congress but was held unconstitutional the first time a court reviewed it for violating the free speech clause of the First Amendment.

Cybersquatter – one who attempts to profit by registering a domain name which incorporates the trademark of a trademark owner with the hope of selling the mark at a profit back to the owner. This term is frequently used to describe anyone who registers domain names in bad faith.

Cybersquatting – the act of being a “cybersquatter.”

Digital – electronic technology that generates, stores, and processes data in terms of two states: positive and non-positive (positive is expressed or represented by the number 1 and non-positive by the number 0). Relevant here is that audio, visual and audio-visual works may be stored digitally (in other words as data), enabling one to create exact (quality does not degrade with serial copying) copies.

Dilution (Trademark or Service Mark) – use of the same or a similar mark in a manner which may or may not be deceptive or confusing but which lessens the capacity of the mark to identify and distinguish goods or services or which tarnishes the mark. Such action is not prohibited under federal law unless the mark meets the definition of “famous.”

DMCA – Digital Millennium Copyright Act of 1998, among other things, designed to implement the treaty signed in December 1996 at the WIPO Geneva Conference.

Domain Names – word names for Internet addresses (e.g., “www.ecommerce.gov”) which map to unique Internet Protocol (IP) numbers (e.g., 98.37.241.30) that serve as the actual routing addresses on the Internet.

DNS – domain name system; translates Internet names into the IP numbers needed for the transmission of information across the network.

DNSO – refers to the domain name supporting organization of ICANN. It is divided into groups which are charged with the responsibility of providing advice and consultation to ICANN on various topics. For example, Working Group C is responsible for providing ICANN with advice and consultation regarding whether and under what circumstances additional top level domain names should be allowed.

DVD – Digital Video Disk.

Ethernet – a local area network (LAN) developed by Xerox, Digital, and Intel; it is the most widely used LAN access method.

EU – European Union.

Framing – the act of splitting a browser window into multiple, independently controllable regions.

Hijacking (of domain name) – registration of a competitor’s mark as a domain name.

HDML – Handheld Device Markup Language; allows a Web site to be portable so visitors can view the site on their mobile phones, pagers, and other small devices.

Home Page – the first Web page that is supposed to be displayed upon bringing up a Web site with a Web browser.

HTML – Hypertext Markup Language; the authoring language used to create documents on the World Wide Web which defines the structure and layout of a Web document.

Http – Hypertext transfer protocol; the underlying protocol used by the World Wide Web. Http defines how messages are formatted and transmitted and directs how Web browsers and servers should respond to various commands.

Hypertext – a linkage between related text commonly used on World Wide Web pages.

ICANN – The Internet Corporation for Assigned Names and Numbers; the non-profit organization that is responsible for domain name registration. (This responsibility was assigned to ICANN by the United States government.)

Internet – an internet is a large network made up of many smaller networks; the Internet is comprised of interconnected networks in over seventy countries and connects individual, academic, commercial, government, and military networks.

Internet Address – format for addressing a message to an Internet user.

ISP – Internet Service Provider; a company that provides access to the Internet. For a monthly fee, the ISP gives a user a password, username, software package, and access phone number.

Link (Hyperlink) – a direct connection between Web sites, Web pages or places on the same Web page.

Markup Language – a computer language that describes how a Web page should be formatted.

Metatag – a hidden word or label in a file of a Web site used to draw the attention of Internet search engines to that Web site.

MP3 – MPEG-1 Audio Layer-3; a standard technology and format for compressing a sound sequence into a very small file (about one-twelfth the size of the original file) while preserving close to the original level of sound quality when it is played.

Napster – available at www.napster.com, this software can be used to find and download MP3 versions of freely available music (legal) and/or commercial proprietary music (illegal). With necessary technological protections, a version of Napster, or something similar, that allows payment by credit card for downloaded versions of music will likely recharge the industry.

NSI – Network Solutions, Inc.; the largest domain name registrar and the manager of the registry for the gTLD’s.

RAM – Random Access Memory; a computer’s primary work space.

Register – to reserve a domain name.

Registrar – companies, such as NSI and Register.com, that have been authorized by ICANN to register top level domain names for the public.

Registry – a database of top level domain names. NSI manages the “registries” for .com, .net and .org, among others.

Ripper – software which enables the user to digitally copy songs from a CD into MP3 and other formats.

Rio – a brand of portable MP3 player.

ROM – Read Only Memory; a memory chip which permanently stores instructions and data.

SDMI – Secure Digital Music Initiative; the SDMI was established to protect music companies’ copyrights on the Web and was designed to prevent serial copying.

Search Engine – a directory which retrieves Web sites responsive to a user’s search request.

Shrinkwrap License – license agreements included under the shrinkwrap covering of software packages.

Spam – unsolicited bulk e-mail.

TCP/IP – A communications protocol developed under contract from the U.S. Department of Defense to internetwork dissimilar systems. It is currently used to connect computers over the Internet.

TLD – Top level domain name; the Internet domain name space is constructed as a hierarchy which is divided into top-level domains (TLDs), with each TLD then divided into second-level domains (SLDs), and so on. More than 200 national, or country-code, TLDs (ccTLDs) are administered by their corresponding governments or by private entities with the appropriate national government’s acquiescence. A small set of gTLDs (generic TLDs) do not carry any national identifier, but denote the intended function of that portion of the domain space (for example, .com was established for commercial users, .org for not-for-profit organizations, and .net for network service providers). (Registrars do not screen for the actual function of the entity and will register gTLDs to entities without regard to whether the domain space properly corresponds to the identifier; i.e. many commercial entities have registered an Internet address ending in “.org.”)

UCITA – Uniform Computer Information Transactions Act; a proposed uniform commercial law for the information economy that would apply to computer software licensing and certain online transactions. The Virginia legislature has passed a bill to enact a version of the UCITA in that state, and it has been signed by the governor.

UETA – Uniform Electronic Transactions Act. UETA grants legal recognition of electronically produced and transmitted signatures, records, transactions, and contracts. A version of UETA has been enacted in California and Pennsylvania.

URL – Uniform Resource Locator; identifies the address where a Web page is stored.

Web Browser – a computer program which allows a user to view pages on the World Wide Web.

Webcasting – live or delayed streaming of audio or video on the Internet.

Web Page – a document on the World Wide Web. Each Web page is identified by a unique URL.

Web Server – a computer with software that can respond to a Web browser’s request for a page and sends the page to the Web browser through the Internet.

Website – a related collection of Web pages and files that includes a home page.

WIPO – World Intellectual Property Organization. An agency of the United Nations. WIPO is responsible for promoting the protection of intellectual property throughout the world and administers international intellectual property conventions and various multilateral treatises dealing with administrative and legal aspects of intellectual property.

World Wide Web – an Internet system that links documents by providing hypertext links from server to server.

©2000, Rob Hassett, Atlanta, Georgia. All Right Reserved.

Impact of Apple vs. Franklin Decision

By Rob Hassett

Casey Gilson, P.C.

Six Concourse Parkway, Suite 2200

Atlanta, GA 30328

(770) 512-0300

http://www.internetlegal.com

 

Background and Summary

This article first appeared in the December 5, 1983 issue of Computer World and addressed the decision of the U.S. Court of Appeals for the Third Circuit regarding the Apple Computer v. Franklin Computer Corporation lawsuit. This was a very important case both to copyright law in general and to the evolution of the computer industry. (3 Pages)

On August 30, 1983 the U.S. Court of Appeals for the 3rd Circuit filed an opinion deciding that operating system computer programs contained only within computer hardware (in this case on chips) can be the subject of copyright.

According to the opinion, engineers at Franklin Computer Corp. copied operating system programs developed and used by Apple Computer, Inc. so that programs designed for the Apple II computer could also be run on the Franklin Ace computer. Apple Computer filed suit claiming copyright infringement. Apple Computer requested that the trial judge bar Franklin from using, copying or selling those programs until the trial of the case, an understandable request inasmuch as the final trial could be delayed for years.

In deciding whether to grant a request of this type, the courts generally consider two factors. First, is the moving party likely to prevail on the merits of the case at the trial? Second, what are the relative harms that will occur to each of the parties if the motion is granted, as opposed to if the motion is denied?

Four-Front Attack

In addition to the usual legal arguments on procedure, Franklin’s attorneys argued that the programs, or portions of the programs, were not protectable under the copyright laws anyway. They launched a four-front attack.

First, they argued that at least a portion of the programs were written in machine language, more an engineering than a written phenomenon. Since copyright laws apply to expressions, not engineering phenomena, the programs were not subject to copyright.

Second, some of the programs were contained on a read-only memory (ROM), which was only a three-dimensional device rather than in a written code that could be protectable under copyright laws.

Third, the operating system programs constituted ideas as opposed to mere expressions, copyright laws not being applicable to ideas.

Franklin’s attorneys also argued the “big guy, little guy” point that Franklin might be out of business if the motion were granted. If the motion were denied, Apple Computer would suffer, at the most, only the loss of some sales.

The trial court had denied Apple Computer’s motion. It reasoned that it was unclear at the juncture that the copyright laws applied. It bought the “big guy, little guy” argument that the harm to Apple Computer of denying the motion was greatly outweighed by the harm to Franklin of granting the motion. The stage was thus set for the appeal by Apple Computer.

Reversed the Ruling

The 3rd Circuit Court of Appeals reversed the ruling of the trial judge and sent the case back down for further determinations. The Court of Appeals held that:  Programs in machine language were copyrightable.

Whether programs were contained on a ROM chip or anywhere else made no difference.

The court also said that where properly “copyrighted material was concededly copied,” the balancing of harm tests normally applied in the determination of whether to grant a preliminary injunction was inapplicable: So much for the “little guy” whose actions were taken with wide open eyes. The Court of Appeals left two questions open for further determination by the trial judge.

First, the Court of Appeals restated the doctrine that it is only the expression of ideas, and not the idea themselves, that can be copyrighted. The court went on to adopt the rule that if an idea may be expressed in only one way, the idea and expression are said to be the same thing and, in that situation, even the expression may not be copyrighted.

Subject of Debate

The question of what is an idea has long been the subject of debate; but the Court of Appeals went on to say that the general function of translating source code into object code qualifies as an idea. The court cautioned that even though the function of translating such code in general was an idea, the function of translating any particular programs, such as Apple-compatible software, was not covered by this noncopyrightability rule if translation of other non-Apple-compatible software could be accomplished by different expressions.

Second, the court left it to the trial judge to decide whether Apple Computer had properly complied with the statutory formalities pertaining to copyright registration.

Although Apple Computer has overcome major obstacles in the lawsuit, it would, for the following reasons, be premature to say that Franklin has lost the case at the trial level:

It may be determined that one or more of the most important operating programs were governed by the idea-expression merger doctrine and are, therefore, not copyrightable.

It may be determined that various copyright registrations procedures were not followed.

It should be noted that if Franklin does lose the lawsuit, but survives the damages awarded, Franklin can be positioned to develop its own programs to obtain Apple Computer compatibility.

Not Copied

Indications are that the operating systems for the other major compatible systems were not copied. This decision would, therefore, be unlikely to affect companies manufacturing most of the other compatibles. There is a question of how well the “non-copy” compatibles work.

If Apple Computer ultimately prevails, what effect, if any, will this decision have on purchasers of the Franklin Ace? Will these people be considered to be infringers of the Apple Computer operating system? Are these systems subject to seizure?

Every case must be considered on its own facts. However, the copyright laws bar copying or publishing materials without permission of the owner, not the use of them. The few appellate courts that have decided the issue have held that wrongfully copied materials in the possession of subsequent purchasers are not subject to seizure for copyright infringement, with limited exceptions related to imported copies. Note that the use of application software generally requires that the application software be copied onto RAM which would seem to arguably make users of application software liable for infringement.

Regardless of the ultimate outcome of this case, the opinion will presently discourage any producer or intended producer of compatibles from copying operating system programs. In most cases, the risk will far outweigh the development cost savings.

The above information is provided for general educational purposes and not as legal advice. Laws in areas in which we practice change continually and also vary from jurisdiction to jurisdiction. Therefore no visitor to our site should rely on any of the articles provided for legal advice, but should always consult their own attorney regarding legal matters.

The information above is provided for general educational purposes and not as legal advice. Laws in areas in which we practice change continually and also vary from jurisdiction to jurisdiction. Therefore no visitor to our site should rely on any of the articles provided for legal advice, but should always consult their own attorney regarding legal matters.       

 © 1983 Rob Hassett, Atlanta, Georgia. All Rights Reserved.

WordPress, Themes and the GPLv2

Featured

by Rob Hassett and Mike Schinkel

Introduction

There has been a long brewing debate in the software world regarding whether commercial developers who write and distribute their own separate code to work with software licensed using version 2 of the GNU General Public License must license their software under that version of the GPL.

In the summer of 2010 a debate emerged on blog posts and via Twitter regarding this issue between Matt Mullenweg, founder of WordPress, Automattic and the WordPress Foundation, and Chris Pearson founder and CEO of DIYThemes. Mr. Mullenweg and Mr. Pearson resolved their differences. However the question they addressed remains unanswered.

We read many of the postings on this topic, most of which were very informative and for which we are grateful. Our goal is to provide an objective and dispassionate view of the relevant license in hopes to establish some clarity regarding the issue.

This article does not constitute legal advice and is general information only.

Background

WordPress is software that is used to create blogs and websites, including the website on which this article is posted: www.internetlegals.com. It is open source and is licensed to others under Version 2 of the General Public License, administered by the Free Software Foundation (the “GPLv2“). To operate WordPress must have what is referred to as a “Theme” which is a collection of scripts, images, and other files that collectively establish the look and some of the functionality for a website based on WordPress and WordPress itself currently includes one default Theme. Many developers, including commercial developers, offer other Themes, Plugins and other software and services for use with WordPress.

A user may separately download and install WordPress and a Theme. The user then separately opens the programs and activates the Theme, which interacts with WordPress to create websites and/or blogs.

Chris Pearson created a Theme named “Thesis “which became a popular Theme for use with WordPress. Matt Mullenweg contended that Thesis was a “work based on WordPress,” under the GPLv2, which, if true, would have serious legal consequences discussed below. Chris Pearson said it was not.

There is some indication that at some point in the past and maybe currently some of the Thesis code was copied from WordPress code. If that was true at the time of the dispute, there is no question that Thesis was subject to the requirements of the GPLv2, but that possibility is not the subject of the debate. The debate, and the focus of our analysis, is over whether add-on software, such as Theme software, that does not incorporate any code from a prior “Program,” licensed under the GPLv2, may be subject to the requirements of the GPLv2. We are not aware of any court decision that has clearly answered this question.

Requirements of the GPLv2

A developer may choose whether or not to comply with the GPLv2 with respect to a particular Program. However, if the developer copies, prepares derivative works of or distributes that Program without complying with the terms of the GPLv2, the developer would be liable for copyright infringement. If all the developer does is copy, use, study and modify the Program, without distributing it, the GPLv2 license does not require the developer to do anything.

However, if the developer distributes either the Program or a “work based on the Program,” the developer is required to meet certain requirements including, but not limited to, licensing the Program, and any “work based on the Program,” under the GPLv2 and making the source code available. So if a developer creates a “work based on the Program”, that developer may sell copies of it, but is required to provide the source code, if asked, and the purchaser is entitled to make and distribute copies of such new work in competition with the developer. It is the authors’ understanding, based on hearing Mr. Pearson’s comments on the audio interview where he discusses this issue with Mr. Mullenweg, that Mr. Pearson did not want to enable his customers to sell copies of Thesis in competition with him.

The relevant legal question then is whether a Theme that does not include code from WordPress, but works together with WordPress, will constitute a “work based on the Program” under GPLv2. If so, its distribution without compliance with the GPLv2 constitutes copyright infringement. If it is not, its distribution without compliance is permitted.

GNU and WordPress Views

Attorneys who are associated with the open source movement say that a portion of most Themes constitute “works based on WordPress.”

The following is posted on the GNU website under “Frequently Asked Questions” relating to GPLv2:

If a program released under the GPL uses plug-ins, what are the requirements for the licenses of a plug-in?

It depends on how the program invokes its plug-ins. If the program uses fork and exec to invoke plug-ins, then the plug-ins are separate programs, so the license for the main program makes no requirements for them.

If the program dynamically links plug-ins, and they make function calls to each other and share data structures, we believe they form a single program, which must be treated as an extension of both the main program and the plug-ins. This means the plug-ins must be released under the GPL or a GPL-compatible free software license, and that the terms of the GPL must be followed when those plug-ins are distributed.

If the program dynamically links plug-ins, but the communication between them is limited to invoking the ‘main’ function of the plug-in with some options and waiting for it to return, that is a borderline case.

The following are portions of an opinion of James Vasile of the Software Freedom Law Center, which was posted by Matt Mullenweg on the WordPress website:

You asked the Software Freedom Law Center to clarify the status of themes as derivative works of WordPress, a content management software package written in PHP and licensed under version 2 of the GNU General Public License.

On the basis of that version of WordPress, and considering those themes as if they had been added to WordPress by a third party, it is our opinion that the themes presented, and any that are substantially similar, contain elements that are derivative works of the WordPress software as well as elements that are potentially separate works. Specifically, the CSS files and material contained in the images directory of the “default” theme are works separate from the WordPress code. On the other hand, the PHP and HTML code that is intermingled with and operated on by PHP code derives from the WordPress code.

The PHP elements, taken together, are clearly derivative of WordPress code. The template is loaded via the include() function. Its contents are combined with the WordPress code in memory to be processed by PHP along with (and completely indistinguishable from) the rest of WordPress. The PHP code consists largely of calls to WordPress functions and sparse, minimal logic to control which WordPress functions are accessed and how many times they will be called. They are derivative of WordPress because every part of them is determined by the content of the WordPress functions they call. As works of authorship, they are designed only to be combined with WordPress into a larger work.

HTML elements are intermingled with PHP in the two themes presented. These snippets of HTML interspersed with PHP throughout the theme PHP files together form a work whose form is highly dependent on the PHP and thus derivative of it.

These writers focus on one or both of the following:

(1) the fact that the PHP that is incorporated into the Theme has to correspond with the PHP in WordPress, and

(2) the fact that there is heavy and extensive interaction between the Word Press and the Theme software.

Analyses

“A work based on the Program” is defined in the GPLv2 as follows:

 A “work based on the Program” means either the Program or any derivative work under copyright law: that is to say, a work containing the Program or a portion of it, either verbatim or with modifications and/or translated into another language.

If this definition had ended with “any derivative work under copyright law,” it would be necessary to determine the meaning of the term “derivative work” under the Copyright Act. Instead the GPLv2 defines the term for us. To the extent important here the phrase is defined as:

a work containing the Program or a portion of it, either verbatim or with modifications

Any developer creating Themes for WordPress would generally need to either examine the WordPress software, or material about that software, to be able to understand how to create the Theme. The Theme would need to be able to communicate with, provide instructions to and receive instructions from the WordPress software. However the Theme would not need to contain any part of the WordPress software or a portion of it, either verbatim or with modifications. Therefore what is distributed would not need to be the “WordPress software or any work based on the WordPress software.”

The fact that PHP in the Theme software has to correspond with the PHP in the WordPress software is not legally relevant to whether the Theme software that is distributed contains all or portions of the WordPress software. Likewise, the fact that a lot of interaction happens between WordPress and the current active Theme after that Theme is distributed to an end user is also legally irrelevant to whether the Theme itself contains all or any part of the WordPress software.

Therefore, inasmuch as the commercial vendors of Themes, including Thesis, are able to avoid including any of the WordPress source code in those Themes, such vendors should be able to avoid being required to take any action to be in compliance with the GPLv2 .

GPLv3

Under the totally different language of the GPLv3, which was first made available for use in 2007, a provider of software, such as WordPress, would have a much stronger claim that distributing Themes without making the source code available to potential competitors was an infringement.

The revisions in the GPLv3 will not help WordPress require Themes to be licensed via GPL. WordPress, and its revisions, were licensed under the GPLv2, without any language permitting licensees to use a later version, and as such there is no actions its controllers could take that would cause future versions of WordPress to be subject to the GPLv3.

Advocacy of GPL-licensing of Themes

Even though our analysis tells us there is no legal requirement for commercial Theme vendors to license Themes for WordPress using GPLv2 we expect there will still be a strong interest on the part of “the WordPress community” to see that most if not all Themes are and/or continue to be licensed via GPLv2. One of the authors, the one who is a participant in the WordPress community, actively supports this ideal.

As such we suggest to Automattic, to WordPress and its foundation, and to the WordPress community at large that they collectively work to continue to encourage Theme vendors to license their offerings via GPL, and that they proactive look for ways to help ensure those who would otherwise choose not to license via GPL are enticed to do so because of the collective benefits they gain from the supportive community.

Or said more simply, without the GPLv2 to require Themes to be licensed via GPL it becomes an “unregulated market” and the WordPress community should employ classic market incentives to encourage adoption of the GPL.

Advisability of Settling Dispute

As far as whether Mr. Pearson’s settling was a smart move, it very likely was. First, if any of the WordPress code was copied into Thesis, his application was governed by the GPLv2 regardless of whether a court agreed with our analysis. Second, litigation is very exhausting and expensive and regardless how sure anyone is about what is the correct answer to a legal question, it is not possible to know how a court will rule. All that a lawyer can provide is an opinion. Third, he was having to deal with marketing and public relations pressure from the WordPress community that likely outweighed the value of not complying.

Rob Hassett is an attorney in technology, entertainment and corporate law with Casey Gilson P.C. in Atlanta, Georgia. He also is a co-author of volume 5, on Internet and Interactive Media law, of the ten volume publication entitled “Entertainment Industry Contracts,” published by Lexis/Nexis and has, on many occasions, taught in the Professional Education Program at Georgia Tech. Mr. Hassett is the founder, editor and publisher of this website: TellMeSomethingIDontAlreadyKnow.com

Mike Schinkel is an entrepreneur in Atlanta, Ga. He was founder and CEO of catalog mail order retailer Xtras, Inc that was recognized in 1999 by the Inc 500 as #123 fastest growing private company in the USA. Today Mike is an active participant in the WordPress developer community, a consultant advising companies on their WordPress Business Strategies, a software developer building WordPress plugins for those companies, and a co-founder of and partner in The Business Of WordPress Conference.

The Fair Use Doctrine and New Media Technology

By:  Rob Hassett

Casey Gilson P.C.

Atlanta, Georgia

770-512-0300 Ext. 557

http://www.internetlegal.com/

           and

Adam H. Alexander

In-House/Corporate Counsel

Sammons Corporation

Dallas, Texas

 

Background and Summary

An earlier version of this article first appeared in the program materials for the conference sponsored by the Entertainment & Sports Law Sections of the Georgia, Florida & Tennessee Bar Associations which was held in Dana Point, California from November 6 through November 8, 1997. This advanced level article addresses the subject of copyright fair use on the Internet. (12 Pages)

The law of copyright has evolved with technological change, with each new technological advancement creating complicated questions of copyright interpretation and application. Nevertheless, the new technologies . . . have been made to fit within the overall scheme of copyright law and to serve ends which copyright was intended to promote. The Internet is no exception; . . . it must be judged in reference to the already flexible considerations which fair use affords.(1)

 

I. COPYRIGHT & DEVELOPMENT OF THE FAIR USE DOCTRINE

The policy goals of the Copyright Act are found in the Constitution. The progress of science and the useful arts is fostered by granting the individual who has expressed his or her idea the limited monopoly to profit from its dissemination.(2) This limited grant is “intended to motivate the creative activity of authors and inventors by the provision of a special reward, and to allow the public access to the products of their genius after the limited period of exclusive control has expired.”(3) In this way, the Copyright Act rewards the author and benefits the public.

An important outgrowth of this policy is the idea/expression dichotomy. This concept insures that no author can protect his or her idea; only his or her expression of that idea.(4) For reasons that will become apparent, this concept is instrumental in protecting First Amendment rights and in helping one recognize some of the goals of fair use under the Copyright Act.

With respect to the First Amendment, the idea/expression dichotomy “[strikes] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an author’s expression.”(5) Because of this balance, “[c]opyright laws are not restrictions on freedom of speech [because] copyright protects only the form of expression and not the ideas expressed.”(6) An example of this idea can be found in the balance between copyright and the First Amendment rights of disseminating the news. The news element is the “history of the day” and is thus entitled to very little copyright protection.(7) However, “copyright assures those who write and publish factual narratives . . .that they may at least enjoy the right to market the original expression contained therein as just compensation for their investment.”(8)

In addition to the idea/expression dichotomy, the fair use doctrine assists in allowing others to build upon the ideas contained within copyrighted works without eliminating copyrights.(9) The fair use doctrine is an old common law idea that was not a part of original the Copyright Act in 1790. Something akin to the fair use doctrine existed in England as far back as 1710, and appeared in the States compliments of Justice Story as a judicially created doctrine in Folsom v. Marsh in 1841.(10) As Justice Story would later explain,

in truth, in literature, in science, and in art, there are, and can be, few, if any, things, which in an abstract sense, are strictly new and original throughout. Every book in literature, science and art, borrows, and must necessarily borrow, and use much which was well known and used before.(11)

 

Fair use remained a judge-made doctrine until the passage of the 1976 Copyright Act,(12) yet to this day remains an equitable doctrine.

II. FAIR USE DOCTRINE BASICS

The fair use doctrine is now set out in §107 of the Copyright Act and reads as follows:

Notwithstanding the provisions of sections 106 and 106A, the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include —

(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

(2) the nature of the copyrighted work;

(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

(4) the effect of the use upon the potential market for or value of the copyrighted work.(13)

The fact that a work is unpublished shall not itself bar a finding of fair use if such finding is made upon consideration of all the above factors.

Section III of this article will discuss the manner in which a court determines each of these factors as well as how they are weighed together. Fair use is an affirmative defense which is raised after a prima facie case of copyright infringement has been established.(14)

When Congress incorporated fair use into the Copyright Act, it intended §107 “‘to restate the present judicial doctrine of fair use, not to change, narrow, or enlarge it in any way and intended that courts [would] continue the common law tradition of fair use adjudication.”(15) This intent, together with the language of the statute, “permits [and requires] 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.”(16)

The application sought by Congress has been recognized and affirmed time and again by the Supreme Court. The case by case analysis is required by statute and there are no bright-line rules or short cuts.(17) Accordingly, all four factors are to be explored and weighed together in light of the purposes of copyright and never to be treated in isolation.(18) As a means of guidance, Congress provided examples of the types of uses which are generally considered fair uses. These examples are meant to be illustrative and not limiting; indeed, “whether a use referred to [as an illustration] is a fair use in a particular case will depend upon the application of the [four] determinative factors.”(19)

Case by case analysis has resulted in inconsistent, sometimes conflicting decisions in cases with similar fact patterns. Identical cases have found courts reversing each other as a case works its way through the appellate process. For example, in Michigan Document Services v. Princeton University Press, the district court found “willful” infringement and no application of the fair use doctrine.(20) A three-judge panel of the 6th Circuit Court of Appeals reversed the district court, finding that the copying was permissible fair use.(21) A rehearing en banc resulted in another reversal, with a slight majority of the active 6th Circuit judges finding that the copying in question was not a fair use.(22) These reversals and re-reversals serve not as an example of how a court misapplied the fair use analysis, but are simply illustrative of how difficult the issues can be and how “reasonable minds can differ” on close questions of judgment as different individuals weigh the different factors.(23)

Problems of analysis and precedent are often compounded by technology. The development of modern technology and communications has radically changed the way in which the public perceives copyrighted material.

The fortunes of the law of copyright have always been closely connected with freedom of expression on the one hand, and with technological improvements in the means of dissemination, on the other. Successive ages have drawn different balances among the interest of the writer in the control and exploitation of his intellectual property, the related interest of the publisher, and the competing interest of society in the untrammeled dissemination of ideas.(24)

The radio, cassette recorders, photocopiers, VCRs, and computer have all been initially thought to render the fair use doctrine obsolete.(25) However, the doctrine has remained unchanged and continues to apply successfully to new technologies. The Internet will be no different. All that will be required, as in the past, is creative thinking and logical application of the four factors while keeping in mind the goals of copyright.

III. FAIR USE ANALYSIS – STATUTORY EXAMPLES AND FACTORS

A. Statutory Examples:

Congress provided examples of the types of uses that might constitute fair use. Examples cited that may constitute fair use are those “for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research. . .”(26) It is important to realize that this list does not create a presumption of fair use, and indeed many uses that might at first seem to be included within the list have been found unfair. For example, in American Geophysical Union v. Texaco, the Second Circuit found that photocopying articles from a scholarly journal (to which Texaco subscribed) for use by Texaco researchers was not a fair use.(27) Likewise, in Los Angeles News Service v. KCAL-TV Channel 9, the Ninth Circuit held that a television news program’s use of a videotape of the Reginald Denny beating during the L.A. riots was not fair use.(28) These are just two of the numerous examples of uses that are named in the statute (research, news-reporting), yet were nevertheless found to be infringing.(29)

B. §107(1) Factor One – The Purpose and Character of the Use:

The first determination that must be made under factor one is the nature and objectives of the user.(30) Invariably, this boils down to whether the use is commercial in nature. Prior to Luther K. Campbell v. Acuff-Rose Music (the case involving 2 Live Crew’s recording of a parody version of Roy Orbison’s “Oh Pretty Woman“), it was widely believed that a commercial use by the alleged infringer created a presumption against fair use. Indeed, the Supreme Court itself had held in Harper & Row v. Nation Enterprises (where The Nation magazine had included unauthorized excerpts of former President Gerald Ford’s unpublished memoirs before authorized excerpts were to be published in Time magazine) that “[every] commercial use of copyrighted material is presumptively an unfair exploitation of the monopoly privilege that belongs to the owner of the copyright.”(31) However, in Campbell, the Court explicitly reversed itself, noting that for commercial uses to be presumptively unfair would swallow the permitted uses if they were for profit.(32)

The other side of the question regarding purpose and character of the use is whether the use is transformative. The Supreme Court described a transformative work as one which “supersedes the objects of the original,” or adds something new, with a further purpose or different character, altering the copyrighted work with new expression, meaning or message.(33) Justice Souter has suggested that using an original “to get attention or to avoid the drudgery in working up something fresh” indicates non-transformative use. The transformative nature of the new work will be considered together with the issue of whether the work is commercial. In Campbell, the Supreme Court noted that while

transformative use is not absolutely necessary for a finding of fair use, the goal of copyright, to promote science and the arts, is generally furthered by the creation of transformative works. Such works lie at the heart of the fair use doctrine’s guarantee of breathing space within the confines of copyright, and the more transformative the new work, the less will be the significance of other factors, like commercialism, that may weigh against a finding of fair use.(34)

When analyzing the commercial nature of a work with its transformative nature, a sliding scale is created. The closer the new work is to direct copy, the smaller the range of permitted commercial uses. The more transformative the new work, the greater the range of allowed commercial uses. Weighing all of these factors together, a trial court will articulate the “winner” on this factor, and to what extent that party prevailed. A finding on this first factor is not dispositive however, for all four factors must be considered together.

C. §107(2) Factor Two – The Nature of the Copyrighted Work:

This analysis focuses exclusively on the copyrighted work that has been infringed. It is made up of two major determinations: how close the original is to the “core of copyright protection” and whether the original is published. First, a court must determine what level of protection should be accorded the copyrighted work. This is achieved by determining how close the original is to the core of copyright protection – how creative or highly expressive a work is versus its being factual in nature. Copyright provides higher protections to creative works, but also “recognizes a greater need to disseminate factual works than works of fantasy or fiction.”(35) While it is obvious that a news broadcast would receive less protection than a science fiction motion picture, courts must often make difficult decisions under this factor, and reasonable people can differ as to how a work should be characterized.

[Even] within the field of fact works, there are gradations as to the relative proportion of fact and fancy. One may move from sparsely embellished maps and directories to elegantly written biography. The extent to which one must permit expressive language to be copied, in order to assure dissemination of the underlying facts, will thus vary from case to case.(36)

For example, in numerous cases in different courts over the same copyrighted material, different determinations were reached regarding the nature of the works of L. Ron Hubbard, the founder of the Church of Scientology.(37) While some judges found Hubbard’s works to be very creative and imaginative,(38) others found Hubbard’s writings more factual and informative.(39)

Second, a court will determine whether or not a work is published. While this is ordinarily a relatively easy finding, the implications are great. The scope of fair use is narrower with respect to unpublished works.(40) Again, policy goals of the Copyright Act are at work. The Supreme Court said it best in Harper & Row:

While even substantial quotations might qualify as fair use in a review of a published work or a news account of a speech that had been delivered to the public or disseminated to the press, the author’s right to control the first public appearance of his expression weighs against such use of the work before its release. The right of first publication encompasses not only the choice whether to publish at all, but also the choices of when, where, and in what form to publish a work.(41)

Thus, published works, while still protected, are nevertheless available to be transformed into new works, commented upon, criticized, or utilized in teaching or research. An example of the published/unpublished determination can be found in yet another Church of Scientology case where the court ultimately found fair use of published works, but against fair use with respect to unpublished works posted on the Internet.(42)

D. §107(3) Factor Three – The Amount and Substantiality of the Portion Used:

This factor is also made up of two elements: a quantitative analysis and a qualitative analysis. With respect to the quantitative element, the extent of the permissible copying varies with the purpose and character of the use as determined in factor one as well as foreshadowing the fourth statutory factor by revealing the degree to which the new work may serve as a market substitute for the original or its potentially licensed derivatives.(43) For example, in Harper & Row, the Court said that substantial quotations of Ford’s memoirs would have been permissible had Nation not “scooped” Time, thus destroying the commercial value of the serialization rights (factor four).

When measuring this factor, courts often use percentages to express the amount of copying that has taken place. However, because no percentage can be called a bright line, courts also will simply characterize the amount of copied material. Some will do both.(44) Because “no plagiarist can excuse the wrong by showing how much of his work he did not pirate,”(45) a second analysis is warranted.

The second portion of this analysis measures the qualitative element of the copied work. The closer the copied material comes to the “heart” of the original work, the less fair use is allowed. In Harper & Row, Nation had taken only 300 words from Ford’s entire manuscript. However, those words constituted “the heart of the book” as they dealt with Nixon’s pardon. As one editor testified at the trial, the chapter on the pardon was “the most interesting and moving part of the entire manuscript.”(46) Likewise, the Court in Campbell found that the use of the opening guitar riff from Roy Orbison’s Oh Pretty Woman, was the heart of that work. It too was the portion taken by 2 Live Crew and incorporated into the new work.(47) A problem under this determination is deciding who measures the “heart” of the work. In many cases, it is the portion taken by defendant that is deemed the “heart” of the work. In one case involving raw video news footage, the Ninth Circuit held this factor against the defendant who had taken only several seconds of footage for use on the evening news. The court reasoned that in preparing a newscast, editors selected the most effective and illustrative scenes from the raw footage available.(48) The analysis was similar in Michigan Document Services v. Princeton University Press where an 8-5 split full panel of the Sixth Circuit held that a commercial copyshop’s reproduction of substantial segments of copyrighted works of scholarship was not fair use when bound into “coursepacks” and sold to students for use in fulfilling reading assignments given by university professors.(49) The panel noted that the excerpts were selected by the professors, and that alone could serve as an indicia of the heart or “value” of the copied work.

Balancing these two determinations together provides another opportunity for courts and reasonable people to differ. While copying of entire works generally causes this factor to tilt toward the original author, other cases are not so clear cut. Courts have had to consider the amount and substantiality of portions taken from photographs(50) and film clips,(51) motion picture series characters and plots,(52) television series,(53) children’s book series,(54) and radio programs,(55) just to name a few.

E. §107(4) Factor Four – Effect of the Use on the Market:

The Supreme Court stated in Harper & Row that the fourth statutory factor, the effect on the potential market, was “undoubtedly the single most important element of fair use.”(56) Although a couple of recent appellate court opinions have suggested that the Supreme Court may have now abandoned that idea and considers no one factor to be more important than the others,(57) one can easily surmise that this is the most important factor to the litigants, and probably the motivating factor in the lawsuit.

Like the other factors and elements of the fair use analysis, the fourth factor does not operate in a vacuum. Determinations and characterizations made in factors one through three will affect the outcome of factor four. “Market harm is a matter of degree, and the importance of this factor will vary, not only with the amount of harm, but also with the relative strength of the showing on the other factors.”(58)

The burden of proof to show market effect hinges on whether the court has determined the use to be commercial or non-commercial. If the challenged use is non-commercial, the burden of showing market effect (usually harm) lies with the copyright holder. Conversely, the party asserting the fair use defense has the burden of showing no market effect if their use has been deemed commercial in nature.(59)

Once the burden has been laid upon the appropriate party, market harm (or lack thereof) can be shown several ways. First, a party can show the direct effect on the market. An example of this can be found in Sega Enterprises v. Maphia, et. al.(60) Sega involved a BBS (which is a computer bulletin board accessible to users by modem) which offered 22 video games created or licensed by Sega as well as six “beta” versions of games soon to be released. Subscribers to the BBS could upload or download games onto the system. The defendant sold “converters” that allowed the downloaded data to be converted into a game that could be played on a Sega machine. Obviously, this was not a fair use. The infringement competed in the marketplace with its original author.

A second way to measure market harm is to “show that if the challenged use should become widespread, it would adversely affect the potential market for the copyrighted work.”(61) Evidence of “substantial harm”(62) would weigh against a finding of fair use because the licensing of derivatives is an important economic incentive to the creation of originals. This is the preferred test. A commercial use infringer is thus burdened with the awesome task of showing that if its use were to become prevalent, that it still would not affect the potential market for the copyrighted work.

“Potential market” includes the market for derivative works as well as licensing possibilities. While this initially would seem to be almost limitless, it is in fact limited by common sense. As the Second Circuit recognized in American Geophysical, a copyright holder with no license agreement can always claim some degree of adverse effect on its potential licensing revenues because of the defendant’s use.(63) However, “[t]he market for potential derivative uses includes only those that creators of original works would in general develop or license others to develop.”(64) In fairness, only “traditional, reasonable, or likely to be developed markets” are considered. Evidence of a copyright holder’s current and future plans for derivative works or licensing would be highly probative in defining the copyrighted work’s “potential market.”(65) A defendant may be permitted to fill a market niche that the copyright owner has no interest in occupying.(66) Likewise, if the copyright holder has an interest or has begun to exploit a licensing market, then potential revenues from such licenses are appropriately considered under the fourth factor.(67)

An illustrative case applying this factor is Infinity Broadcasting v. Kirkwood.(68) Kirkwood had placed radio receivers in each of America’s ten largest radio markets. Through use of a touch-tone telephone, his customers could dial into a receiver in a particular city and listen to a broadcast in these cities in real-time. Kirkwood’s service thus rebroadcast copyrighted radio programs for a profit and without the payment of royalties to any of the radio stations which he made available to his customers. The court found that Kirkwood’s use was fair. This decision was based in large part on the fact that Kirkwood served a different market than the radio stations. Infinity’s purpose, the court said, was to generate revenues from advertisers and syndication rights, thus their market was the masses. The parties had stipulated however, that Kirkwood’s service was not intended for the general public, but had been marketed to radio stations, consultants, advertisers, performance rights organizations and others in the advertising and entertainment industries.(69) The court determined that Kirkwood’s service had no impact on the value of Infinity’s copyrighted programs as a means of generating advertising or syndication revenues.(70)

Other examples of the nuances of the fourth factor demonstrate that while the market must be “traditional and reasonable”, the harm experienced by that market may go beyond the normal economic harms. In Dr. Seuss Enterprises v. Penguin USA,(71) the court found market harm from the adverse affect on Dr. Seuss’s reputation and good will resulting from the defendant’s book about the O.J. Simpson murder trial.(72) In Metro-Goldwyn-Meyer v. American Honda,(73) the court found market harm in loss of potential endorsement value and “tie-in” marketing of products with motion pictures.(74) Market harm is not always found just because litigants are market competitors. In Sega Enterprises v. Accolade,(75) the Ninth Circuit Court of Appeals found that notwithstanding the fact that the parties were competitors and that Sega would suffer minor economic loss, Accolade’s copying of a limited amount of source code in the process of reverse engineering that code was permissible because it was necessary for Accolade to produce games compatible with the Sega player.(76) As these examples have shown, the fourth factor analysis has evolved into an amorphic and sometimes unwieldy determination. Counsel should always consider the wide variety of arguments that can be made under this factor.(77)

IV. INTERNET SCENARIOS/HYPOTHETICALS

As mentioned earlier, new technologies in multimedia and especially the Internet have heightened concern among many that copyrights will no longer be respected in the digital age. This has resulted in a spate of bills being introduced into Congress in an effort to amend the Copyright Act for purposes of clarification and sometimes to grant immunities.(78) Regardless of the outcome of these bills, the fair use defense still remains a viable argument in the face of infringement. The following are a series of scenarios and hypotheticals which are provided to show the range of situations in which the fair use defense could be raised in the context of the Internet.

• Al browses on-line and “surfs the web.” As he does so, Al’s computer makes copies onto its hard drive of every page viewed during Al’s on-line session. While it’s generally considered that there is an implied license for users to do this, one court has suggested that this is also a fair use.(79)

Ÿ While surfing the web at the office, Betty visits CNBC.com. There she sees an interesting but rather long story on the life of Princess Diana. Not having time to read it, Betty prints it out to read on the train ride home. Betty’s use is similar to media/time shifting which was approved by the Supreme Court in Sony.(80) It also is permissible to make copies for convenience,(81) and clearly making a single hard copy of an interesting article on the web would constitute fair use under both Sony and American Geophysical.

Ÿ Charlie is concerned about the plight of Angola. He maintains a non-commercial(82) web site espousing the increase in U.S. aid to Angola and detailing the conditions of Angolans and the corruption in their government. To lend credibility to his position, Charlie copies sections of text as well as some photos and maps from magazines and news-related web sites such as CNN.com which are incorporated into his web site. Charlie’s use of the copyrighted material is probably fair. Newsgroup discussions and web sites of current events, political or celebrity figures, social movements, news or editorial commentary would generally be fair(83) because 1) news-related and factual materials are accorded lower protections than other types of copyrighted materials;(84) 2) comment and criticism are recognized fair uses under §107; 3) the copied portions are only what was necessary to convey the facts or ideas;(85) 4) the use is non-commercial in nature;(86) and 5) there is a First Amendment free expression aspect to web sites of this type. This is reflected in the idea that the scope of fair use is wider when the use relates to issues of public concern.(87)

• Dolly is a big fan of daytime soap operas, particularly All My Children. While watching each day, Dolly faithfully takes notes detailing the plot twists of the show. Later, she updates the non-commercial web site she maintains as a sign of her devotion to the show. It contains an on-going general plot summary dating back to 1993 along with Dolly’s commentary on the characters and her predictions about where the show should go. She also provides a means for visitors to exchange commentary about the show with each other. Dolly has many “regulars” and has even proudly posted a letter she received from the head writer of All My Children commending her on her home page.(88) Dolly’s use would most likely be fair, in large part because her use is transformative, non-commercial and because she does not cause any market harm. Her commentary and predictions would be sufficiently transformative to negate what little market harm she might do to the show. Further, there seems to be little market for syndication of daytime soap operas after they have aired, and Dolly’s letter from the head writer would seem to be an acquiescence.

• Eddie, Dolly’s cousin, is a devoted fan of the sitcom Seinfeld. Like Dolly, he too maintains a web site to pay homage to his favorite show. As a matter of fact, there are about 75 other web sites maintained by people like him. But Eddie’s site is very popular, and for good reason. By visiting his page, one can download audio and video clips of the show Eddie dubbed off his VCR. Eddie also has posted the entire script (along with stage directions) of every Seinfeld episode. After Eddie started getting over a thousand “hits” a day on his site, he decided to start selling advertising on his page to off-set his expenses and make a little money on his hobby. Eddie’s use is not fair. Not only is his use commercial, but the extent of his copying rises to a level where it could potentially interfere with the market for derivative works or decrease the syndication value of the show.(89) It is possible that a person who missed Seinfeld on Thursday night could visit Eddie’s site and read the script, as well as see and hear some of the “highlights” of the show without having to rent a video or tune-in to the re-run.(90)

• Frank just developed a new technology that will provide a means by which “micropayments” can be made for viewing material on-line. For example, as a part of a user’s monthly access fee with his Internet provider, he deposits a sum into a debit account. Now when he visits the New York Times site on-line, he is presented with an initial menu page. When he selects a story to read, several cents are deducted from his account. Frank’s invention could have profound effects on the Internet, because now, every hyperlink is potentially commercial in nature(91) and market harm under the fourth factor would be more easily shown. This technology, by the way, is only a few years from reality.

• Gertrude is a consumer activist. She heads an organization called LobbyWatch which publicizes the activities of lobbyists to those outside the beltway. Her principal targets are the lobbying activities of big tobacco, the gun lobby, and insurance carriers. Gertrude’s web site regularly posts flyers and mass mailings that such groups send to their members (Gertrude is on the mailing list) and form-letters that such groups mail to Congressional representatives which Gertrude surreptitiously obtains from a friend who is a Capitol Hill staffer. Gertrude posts the letters in their entirety, and offers no comment on the page with them. In an effort to frustrate Gertrude, several of the lobbyists began placing copyright notices on their letters before sending them out . They then bring suit against LobbyWatch for copyright infringement. Gertrude’s assertion of the fair use defense presents some interesting questions. Gertrude’s use would be considered comment or criticism, and arguably news, scholarship or research. Gertrude’s use is non-transformative. Although the use of the letters would be competitive in the sense the user is criticizing the lobbying efforts, such type of use is not considered to affect the market as is relevant under the fourth fair use factor.(92) There is a First Amendment aspect to Gertrude’s use in that it fosters public debate in the marketplace of ideas. The lobbyists letters are surely eloquent, but would likely be held to be of a factual or informative nature.(93) Additionally, their nature as brief, persuasive documents would make it difficult to separate the ideas contained within them from their expression.(94)

With respect to the letters that Gertrude received from the lobbyists which they mailed to their constituents, her use would likely be held fair. The posting of documents she obtained surreptitiously however, may not be fair use. Assuming the letters to the Congressmen were held to be unpublished, this would militate against an application of fair use. Gertrude’s acts could also be found to constitute bad faith, and as such would weigh against her under the fair use analysis.(95)

This hypothetical is an example of how complex a fair use fact pattern and analysis can become in the face of competing interests and policies. The outcome of a case such as this could vary from court to court and could be easily be overturned numerous times on its way through the appellate process.

V. CONCLUSION: FAIR USE IN THE DIGITAL FRONTIER

The old adage “the more things change, the more they stay the same” is particularly appropriate when discussing the effect of new technology on the fair use defense to copyright infringement. While the fair use doctrine dates back to the English common law, it can still be applicable in today’s digital age. A steady eye on the underlying policies of the fair use doctrine and a creative commitment to applying the doctrine to the challenges of multimedia, digital and Internet technologies will allow the practitioner to confidently raise the fair use defense in the face of the most sophisticated technological infringement claims.

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ENDNOTES

1 Religious Technology Center v. Lerma, 40 U.S.P.Q.2d 1569 (E.D.Va. 1996).

2 U.S. Constitution, Art. I, Sec. 8.

3 Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417, 429 (1984).

4 Nimmer On Copyright §1.10[B][2].

5 Harper & Row, Publishers, Inc. v. Nation Enterprises, 471 U.S. 539, 556 (1985) quoting Consumers Union of U.S. v. General Signal Corp. 724 F.2d 195, 203 (2nd Cir. 1983).

6 Harper & Row, 471 U.S. at 556 (explaining Justice Brennan’s concurrence in N.Y.Times v. U.S. 403 US 713, 726 (1971)).

7 International News Service v. Associated Press, 248 U.S. 215, 234 (1918).

8 Harper & Row, at 556-57.

9 Luther R. Campbell v. Acuff-Rose Music, Inc., 114 S. Ct. 1164 (1994) citing Carey v. Kearsley, 4 Esp. 168, 170, 170 Eng. Rep. 679, 681 (K.B. 1803) (Lord Ellenborough).

10 See Id. at 12-13. All citations to the Campbell decision are to 1994 U.S. LEXIS 2052 pagination.

11 Emerson v. Davies, 8 F. Cas. 615, 619 (No.4,436) (CCD Mass. 1845).

12 Campbell, at 15.

13 The statute is clearly influenced by Justice Story’s early judicial doctrine. In Folsom v. Marsh, Story set forth what became the basis for statutory fair use: “look to the nature and objects of the selections made, the quantity and value of the materials used, and the degree in which the use may prejudice sale, or diminish the profits, or supersede the objects, of the original work.” 9 F. Cas. 342, 348 (No. 4,901)(CCD Mass. 1841).

14 Nimmer On Copyright §13.05; a prima facie case of copyright infringement is established by the plaintiff showing: 1) ownership of the copyright, and 2) copying of the constituent elements of the work that are original. Nimmer, at §13.01.

15 Campbell, at 16 (quoting H.R. Rep. No. 94-1476, p. 66 (1976); S. Rep. No. 94-473, p. 62 (1975)) (hereinafter Senate Report).

16 Campbell, at 16 (quoting Stewart, et. al v. Abend, 495 US 207, 236 (1990)).

17 Campbell. at 17; Nation at 560; Sony at 448.

18 Campbell, at 17.

19 Campbell, at 17 (quoting Senate Report at 62).

20 855 F. Supp. 905 (E.D. Mich. 1994).

21 74 F.3d 1512 (6th Cir. 1996); 1996 WL 648261

22 99 F.3d 1381 (6th Cir. 1996), cert. denied, 117 S. Ct. 1336 (1997).

23 “The malleability of fair use emerges starkly from the fact that all three [of the Supreme Court’s recent fair use decisions – Harper & Row, Sony, and Campbell] were overturned at each level of review, [and]two of them split opinions at the Supreme Court level.” Nimmer, at §13.05.

24 B. Kaplan, An Unhurried View of Copyright, vii-viii (1967).

25 Religious Technology Center v. Lerma, 40 U.S.P.Q.2d 1569 (E.D.Va. 1996).

26 §107

27 37 F.3d 881 (2nd Cir. 1994).

28 108 F.3d. 1119 (9th Cir. 1997).

29 Conversely, the Supreme Court found the taping of programming for later viewing to be a non-infringing fair use although “time-shifting” is not one of the named uses. Sony, 464 U.S. 417 (1984).

30 American Geophysical Union v. Texaco, 60 F.3d 913, 922, n. 8 (2nd Cir. 1994).

31 Harper & Row, at 562; citing Sony, at 451. In Harper & Row, the Supreme Court said the use of the excerpts was not a fair use.

32 Campbell, at 28-33. In Campbell, the Supreme Court sent the case back for further proceedings.

33 Campbell, at 19.

34 Campbell, at 19-20.

35 Harper & Row, at 563.

36 Id. at 563, quoting Gorman, Fact or Fancy? The Implications for Copyright, 29 J. Copyright Soc. 560, 561 (1982).

37 “[R]easonable people can disagree over how to classify Hubbard’s works.” New Era Publications Int’l v. Carol Publishing Group, 904 F.2d 152, 158 (2d Cir. 1989).

38 “The undisputed evidence shows that L. Ron Hubbard’s works are the product of his creative thought process, and not merely informational.” Bridge Publications, et. al. v. Vien, 827 F. Supp. 629, 635-36 (S.D. Cal. 1993)

39 Religious Technology Center v. Lerma, 908 F.Supp. 1362, 1367 (E.D.Va. 1995).

40 Harper & Row, at 564.

41 Id.

42 Religious Technology Center v. Netcom, 1995 U.S. Dist. LEXIS 16184 (N.D.Cal. 1995).

43 Campbell, at 34 citing Sony, at 449-50, Harper & Row, at 564, and Leval, Toward a Fair Use Standard, 103 Harv. L. Rev. 1105, 1123 (1990).

44 See Harper & Row, at 565. The Court mentions a percentage, but then says infringing article “structured around quotes which serve as dramatic focal points.”

45 Sheldon v. Metro-Goldwyn Pictures Corp., 81 F.2d. 49, 56 (2d Cir. 1936).

46 Harper & Row, at 565.

47 Campbell, at 37. The Court recognized that in cases of parodies, taking the heart of the original is necessary because it is assured of conjuring up the original in the minds of the parodist’s audience. The Court further said that a parodist should take no more than is necessary to conjure up the original.

48 Los Angeles News Service v. Audio Video Reporting Service, 973 F.2d 791 (9th Cir. 1992).

49 99 F.3d 1381 (6th Cir. 1996), cert. denied, 117 S. Ct. 1336 (1997).

50 See Art Rogers v. Jeff Koons, 960 F.2d 301 (2d Cir. 1992) (photograph of couple holding eight puppies copied by defendant in sculpture not fair use); Leibovitz v. Paramount Pictures, 948 F. Supp. 1214 (S.D.N.Y. 1996) (Leslie Neilsen advertisement for upcoming film Naked Gun 33 1/3: The Final Insult held fair use parody of Demi Moore’s nude, pregnant photo for cover of Vanity Fair).

51 See Monster Communications, Inc. v. Turner Broadcasting System, Inc., 935 F.Supp. 490 (S.D.N.Y. 1996) (court denies plaintiffs request for injunction against the release of Turner’s When We Were Kings, a movie about the life of Muhammad Ali; court finds that Turner is likely to show that its use of less than two minutes of footage from Ali’s 1974 heavyweight title fight is a fair use).

52 See Metro Goldwyn Mayer, Inc. v. American Honda Motor Co., 900 F.Supp. 1287 (C.D.Cal. 1995) (Honda Del Sol commercial which portrays “a high-thrill chase of the ultra-cool British charmer and his beautiful and alarming sidekick by a grotesque villain in which the hero escapes through wit, aided by high-tech gadgetry” held not fair use of “classic James Bond adventures”).

53 See Twin Peaks Productions, Inc. v. Publication Int’l, Ltd., et. al., 996 F. 2d 1366 (2d Cir. 1993) (Defendant’s book describing aspects of the first season of the Twin Peaks television series and which contained information on characters detailed plot summaries and trivia held not fair use of series copyrights); Castle Rock Entertainment v. Carol Publishing, 955 F. Supp. 260 (S.D.N.Y. 1997) (Defendant’s Seinfeld Aptitude Test, a book consisting of trivia about the show, identified and appropriated the most important elements of the sitcom Seinfeld – no fair use).

54 See Dr. Seuss Enterprises v. Penguin Books USA, 109 F.3d 1394 (9th Cir. 1997) (Defendant’s book The Cat NOT in the Hat about the Brown/Goldman murders and OJ Simpson’s trial held not fair use of the Cat in the Hat).

55 See Infinity Broadcasting v. Kirkwood, 965 F.Supp 553, 557 (S.D.N.Y. 1997) (court held third factor against defendant’s service based on “fairness” because neither party could show the extent of actual retransmission, let alone the content, and defendant’s service allowed subscribers to monitor radio programs in distant cities 24 hours a day).

56 Harper & Row, at 566, citing Nimmer §13.05

57 See American Geophysical, 60 F. 3d, at 926.

58 Campbell, at 42, n. 21.

59 Sony, at 451.

60 948 F. Supp 923 (N.D.Cal. 1996).

61 Harper & Row, at 568, quoting Sony, at 451.

62 Campbell, at 46.

63 American Geophysical Union v. Texaco, Inc., 60 F.3d 913 (2d Cir. 1994).

64 Campbell, at 44.

65 Litigants should always address the market for derivatives and licenses. In Campbell, 2 Live Crew asserted that its use of the song Pretty Woman was a parody. While the Court did find the band’s use to be parody, the Crew was put at a disadvantage under factor four because they failed to address the potential market for a non-parody rap version of Pretty Woman. The Court sent the case back for further proceedings on this issue.

66 Twin Peaks Productions, Inc. v. Publication Int’l, Ltd., et. al., 996 F. 2d 1366, 1377 (2d Cir. 1993).

67 American Geophysical, at 930.

68 965 F. Supp 553 (S.D.N.Y. 1997).

69 These were the typical users of Kirkwood’s service who used it to monitor advertising, gather statistical data for performance rights organizations, or audition on-air talent.

70 This is a good place to remind the reader of the impact of the other three factors in the overall outcome of a fair use determination. The court found factor one favored Kirkwood because although his retransmissions were not transformative, they were for a limited and different purpose than used by Infinity. As Kirkwood’s use was for a commercial purpose, many courts would have held that this factor favored Infinity. Factor two went to Infinity with the recognition that its copyright was predominately a compilation composed of independently copyrighted works (songs, commercials). Factor three went to Infinity as well because Kirkwood offered the possibility of retransmission of entire copyrighted works.

71 109 F.3d 1394 (9th Cir. 1997).

72 The defendant’s book was an attempt at parody entitled The Cat NOT in the Hat! The court borrowed a market harm test from the Second Circuit which sought to “strike a balance between the benefit the public will derive if the use is permitted and the personal gain the copyright owner will receive if the use is denied. The less adverse effect that an alleged use has on the copyright owner’s expectation of gain, the less public benefit need be shown to justify the use.” Id at 1403, quoting MCA, Inc. v. Wilson, 677 F.2d 180, 183 (2d Cir. 1981).

73 900 F.Supp. 1287 (C.D.Cal. 1995).

74 The court found the fourth factor to tip in favor of MGM because Honda’s use of the James Bond-like character and scenes diluted the market value of movie tie-ins and endorsements by Bond movies. The court specifically noted the arrangements to feature the BMW Z3 Roadster in the movie Goldeneye. “The court can very well imagine [that] a majority of the public, when viewing the Honda commercial and a future BMW ad, would come to the conclusion that James Bond was endorsing two automobile companies.” Id. at 1301.

75 Sega Enterprises, Ltd. v. Accolade, Inc., 977 F.2d 1510 (9th Cir. 1992).

76 Significant to this case was the fact that deconstructing Sega’s code was essential to allow Accolade to produce a game to be played on the Sega game player. After noting that it was free to consider public benefit resulting from a particular use, the court held that “an attempt to monopolize the market by making it impossible for others to compete runs counter to the statutory purpose of promoting creative expression and cannot constitute a strong equitable basis for resisting the invocation of the fair use doctrine.” Accolade, 977 F.2d at 1523-24.

77 When the potentially infringing uses are parody or criticism, courts have recognized since Campbell that even if the use is commercial in nature, the parody or criticism does not generally cause market harm to the copyright holder because the two uses serve different purposes. Authors do not typically also produce parodies of their own works nor can a criticism, scathing though it may be, compete in the marketplace with the original. See Campbell, at 40-48.

78 See, e.g., WIPO Copyright and Performance and Phonograms Treaty Implementation Act of 1997 (introduced in the Senate); Digital Copyright Clarification and Technology Education Act of 1997 (introduced in the Senate). Both available at <http://thomas.loc.gov>

79 Religious Technology Center v. Netcom On-Line, et. al., 1995 U.S. Dist. LEXIS 18173 (N.D.Cal. 1995). This court suggests that browsing on-line is the functional equivalent of reading a book in a library (although thousands can read at once) and that there is not, at least at this point, a market for licensing the temporary copying of digital works onto computer screens to allow browsing. Id. at 47.

80 Sony, at 455 n. 40.

81 American Geophysical, 60 F.3d at 923.

82 The term “non-commercial” web site will be used to refer to those sites which do not derive revenues through subscriptions, passwords, advertisements or other commercial support. Such sites are typically maintained by individuals who pay for the site out of their own pocket.

83 Compare Religious Technology Center v. Lerma, 40 USPQ 2d 1569 (E.D.Va. 1996) (even though defendant’s use was non-commercial, posting entire unpublished works went beyond fair use).

84 “The law generally recognizes a greater need to disseminate factual works than works of fiction or fantasy.” Harper & Row, at 563.

85 The greater the portion taken from the original, the less it looks like fair use. “[N]o more of a work may be taken than is necessary to make the accompanying comment understandable.” Supermarket of Homes, Inc. v. San Fernando Valley Board of Realtors, 786 F.2d 1400, 1409 (9th Cir. 1986).

86 However, the more transformative the use, the more commercial the site could be. The new work must be more than “merely the product of ‘the facile use of scissors.’ [or cut and paste as the case may be].” Maxtone-Graham v. Burtchaell, 803 F.2d 1253, 1260 (2d Cir. 1986) (quoting Folsom v. Marsh, at 345). See supra Section III.A.

87 National Rifle Association v. Handgun Control Federation of Ohio, 15 F.3d 559 (6th Cir. 1994).

88 These facts are a variation on one of many Beverly Hills 90210 sites on the web. One site in particular claimed “visits” from cast members and posted a letter from the show’s executive producer who offered suggestions and inside information.

89 Seinfeld’s producers, it turns out, have asserted their rights when individuals have sought to “cash in” on the show’s popularity. See Castle Rock Entertainment v. Carol Publishing, Inc., 955 F. Supp. 260 (S.D.N.Y. 1997). The court held that a Seinfeld trivia book took too much and competed in a marketplace which the plaintiff was likely to enter.

90 In Twin Peaks Productions v. Publications International, 996 F.2d 1366 (2nd Cir. 1993), the defendant’s unauthorized book about the characters, story and social phenomena of the first season of the television series Twin Peaks was found to make an unfair use of the copyrighted scripts of the show. The defendant’s detailed plot summaries, the court said, would allow someone to read the book to find out what happened the first season instead of renting a video. “The author of Twin Peaks cannot preserve for itself the entire field of publishable works that wish to cash in on the Twin Peaks phenomenon. But it may rightfully claim a favorable weighing of the fourth fair use factor with respect to a book that reports the plot in such extraordinary detail as to risk impairment of the market for the copyrighted works themselves or derivative works that the author is entitled to license.” Id.

91 See Pamela Samuelson, The Copyright Grab, Wired, Jan. 1996, available at <http://wwww.wired.com/wired/4.01/features/whitepaper.html> Samuelson’s article, among other things, criticizes a proposal, adamantly rejected to date, to exclude any material for which payments could be collected on a reasonable basis for even de minimus copying from being available under fair use.

92 It is unlikely that a lobby group would ever license this type of use, so the market analysis may be more akin to that of parody or criticism. There is no protectable derivative market for criticism. Courts have realistically acknowledged that it is “unlikel[y] that the creators of . . . works [would] license critical reviews . . . of their own product.” Campbell, at 45. Even if a court found Gertrude and the lobbyists to be competitors, it is likely that greater principals of public concern and freedom of expression issues would be over-riding. More than one court has factored in public concern and benefit when analyzing the fourth factor. See National Rifle Association v. Handgun Control Association, 15 F.3d 559 (6th Cir. 1994) (use was fair because it was related to petitioning the government on legislation and commenting of public issues); Sega Enterprises v. Accolade, Inc., 977 F.2d 1510, 1523 (9th Cir. 1992) “Public benefit need not be direct or tangible, but may arise because the challenged use serves a public interest.”

93 See Religious Technology Center v. Lerma, 40 U.S.P.Q. 2d 1569 (EDVa 1996) (works that were intended to be informational in nature rather than creative further from the core of copyright protection).

94 See Harper & Row, at 564 (President Ford’s characterization of the “smoking gun” difficult to convey without using his exact words).

95 See Religious Technology Center v. Netcom On-Line, 1995 U.S. Dist. LEXIS 16184 (N.D. Cal. 1995) (obtaining copies in an unauthorized manner, while not fatal to a fair use defense, tends to weigh in plaintiff’s favor and will be considered among the other factors). Often in such close cases, courts will look for “bad guy” behavior on the part of one party.

The above information is provided for general educational purposes and not as legal advice. Laws in areas in which we practice change continually and also vary from jurisdiction to jurisdiction. Therefore no visitor to our site should rely on any of the articles provided for legal advice, but should always consult their own attorney regarding legal matters.

© 1997, Rob Hassett, Atlanta, Georgia. All Right Reserved.

Governing the Internet

By Rob Hassett

Casey Gilson P.C.

Six Concourse Parkway, Suite 2200

Atlanta, GA 30328

(770) 512-0300

http://www.internetlegal.com

 

This article was prepared for the seminar on Advanced Internet and Computer Law sponsored by the National Business Institute scheduled for October 29, 1998 in Atlanta. This advanced level article addresses such questions as who “owns” the Internet, the current role of the U.S. government, and the future of the domain naming system. (25 pages)

ACKNOWLEDGEMENTS

The writer wishes to thank the following individuals for providing information and/or assistance in preparing these materials:

1. Jay Fenello, who is the President of Iperdome, Inc. (http://www.iperdome.com) Jay is currently serving as a member of the Steering Committee for the International Forum on the White Paper (IFWP) to assist in setting up the structure for a new domain name system. (http://www.ifwp.org)

2. Bruce Hassett, a brother of the writer, who is currently employed with GTE Internetworking. GTE acquired BBN, including the BBN Planet network, approximately one year ago. (http://www.bbn.com)

3. Lynn Hassett, the writer’s wife, who is an attorney in the same law firm as the writer.

4. The staff of the Competitive Pricing Division of the Federal Communications Commission (FCC) Common Carrier Bureau. (http://www.fcc.gov)

5. Ellen Rony, who is a co-author of “The Domain Name Handbook.” (http://www.domainhandbook.com)

6. Richard Sexton, who participated in some aspects of the development of the Internet.

I. INTRODUCTION

To understand the current operation of the Internet and the controversies concerning the domain name system, it is necessary to understand the relevant history.

II. ORIGINS OF THE INTERNET

A. ARPA.

In 1957, the Soviet Union launched the first man-made satellite, Sputnik, which surprised most Americans who had assumed that the United States was far ahead of the Soviet Union technologically. As a consequence, President Dwight Eisenhower established the Advanced Research Projects Agency (“ARPA”). ARPA was set up as an agency of the Department of Defense but was established for the purpose of promoting scientific research.(2)

ARPA sponsored computer research and development at major universities throughout the country including research into time-sharing systems, computer graphics and improving computer programming languages. At the time, computers were extremely expensive and the sharing of resources was difficult not only because there was no network but because the computer languages, protocols, etc. were not compatible. In 1966, officials at ARPA decided to set up a network among computers at major universities. This network became known as the “ARPANET.”(3) The contract to build ARPANET was awarded to a small consulting firm in Boston, Bolt, Bernek & Newman (which of course later established the “BBN Planet” network). BBN set up a network information processor (“NIP”) at each participating university. The NIP’s were used to send and receive all messages.(4) Performance testing was contracted to the Network Measurement Center at UCLA. Two individuals that became very prominent in the construction of the Internet, Vince Cerf and Jon Postel, were students at UCLA that worked part-time at the Network Measurement Center.(5) These individuals, as well as many others, overcame significant technological obstacles in making the ARPANET operational. Jon Postel retains a central role in the operation and development of the Internet to this day.

B. Network Working Group.

One of the problems that the universities had to deal with was that although connections could be made through the ARPANET, it was necessary to agree upon protocols to allow communications between the incompatible computers at the various universities. Representatives from the various universities met and formed an open group called the Network Working Group or “NWG.” Possibly because they had no authority, the students followed the pattern set by one of their members who wrote up minutes of their first meeting and called minutes of all of their meetings “Requests For Comments” to set the tone that anyone could contribute.(6) By 1972, Jon Postel had become the editor and distributor of the Requests For Comments.(7)

C. Other Networks.

As time went on ARPANET became obsolete. The network for military computers was taken over by the MILNET network and the academic links were taken over by the network established by the National Science Foundation (the “NSFNet”).(8) Other commercial networks were also set up.

D. TCP/IP.

In order to link the different networks, it was necessary to come up with a new advanced set of protocols which ultimately became the Transmission-Control Protocol and the Internet Protocol now referred to as “TCP/IP”. An individual named Bob Kahn, while employed by ARPANET and working with Vince Cerf, developed the first version of TCP which led to the ability to connect multiple networks of multiple computers.(9)

E. Current Configuration of the Internet.

Currently, the Internet is a network of networks. With few exceptions such as MILNET, which is operated by the U.S. Military, the networks are privately owned. GTE currently owns and operates the BBN Planet network. WorldCom owns and operates the UUNET network. AT&T, MCI, Sprint and many other companies own and operate other networks that are part of the Internet. The networks, which include all of those referred to in the previous sentence, that provide high capacity nationwide connections are also known as “backbones.”

Access to the servers and information that reside on all of the networks that form the Internet can be made through any of those networks. Such access can be obtained through the larger national (and even International) networks (run by the Tier 1 providers such as GTE, UUNET, MCI, etc.), the smaller regional networks (such as Erols, BellSouth, etc.), or the local ISP’s which buy their network transit from one of the larger providers.

How does a computer connected to any one of the networks that forms the Internet successfully connect to a computer located on a different network? The Internet works because the separate networks that form the Internet connect, or peer, with each other. There are two types of peering: public and private.

Public peering, where many networks connect to each other through a large network switching system, occurs at several different public exchange points around the world. The concept of public peering points was originally established by the National Science Foundation. There are many public exchange points. Some of the more well-known ones are MAE East (Washington, D.C., operated by MFS), Sprint NAP (northern New Jersey operated by Sprint), MAE West (Palo Alto, operated by MFS) and LINX (London). Virtually all of the networks that make up the Internet peer at one or more of the public exchange points. Because of the tremendous traffic, serious bottlenecks can occur at these exchange points.

With this in mind, many of the larger providers have established private agreements among themselves to establish private peering — i.e., transfer of traffic via a dedicated, high-speed circuit between two companies’ networks, thereby avoiding the bottlenecks at the public exchange points. Companies will only agree to peer with those companies that they expect will receive as much data as they send. With companies like UUNET and GTE, that is not a problem because both networks will dump about the same amount of traffic onto each other. However, if one company only has web sites (i.e., does not offer dial-up access or direct-connect business access), then that company will tend to dump a lot more traffic on the other networks than the reverse. This imbalance has resulted in certain networks refusing to privately peer with certain other networks.(10)

It is possible to trace the route of one’s packets(11) from one’s own computer to most web sites (tracing to some of the larger ones is blocked). First, connect to your Internet service provider, bring up a DOS prompt and at the DOS prompt type in: “tracert www.[second level domain name (such as “internetlegal”)].[top level domain name (such as “com”)]. From Atlanta it is evident that MindSpring is connected directly at least to “alternet” which is “UUNET.”

F. Initial Domain Naming System.

In 1982, Jon Postel and others developed a new standard for email which they named “simple mail transfer protocol.” As the number of computers connected to the Internet multiplied, it was necessary to develop a new addressing scheme. A group of engineers led by Paul Mockapetris, who was at that time employed by the Information Sciences Institute at the University of Southern California in Marina del Rey (“ISI”), and including Jon Postel, who was at that time and still is employed by ISI, and Craig Partridge, who was at that time employed by BBN, developed what is now referred to as the domain naming system (“DNS”). It was eventually decided that the initial generic top level domain names would be: (12)

(1) “edu” for university sites;

(2) “gov” for government sites;

(3) “com” for company or commercial sites;

(4) “mil” for military sites;

(5) “org” for non-profit organization sites;

(6) “net” for network service providers; and

(7) “int” for international treaty entity sites.

III. Ownership.

From the above, it is clear that almost all of the networks of the Internet as well as the exchanges are owned by private companies just as are most telephone facilities. TCP/IP specifications were developed by government employees. Consequently, any copyrights in those specifications are in the public domain.(13) Assuming the protocols constituted statutory subject matter and met other requirements, the United States could have owned patent rights in these protocols provided the U.S. had filed an application within the required one (1) year period, but apparently did not do so. TCP/IP is therefore available without restriction, although there may be proprietary rights in derivative versions.

IV. FCC Regulations.

The Federal Communications Commission (“FCC”) has the authority to regulate “interstate and foreign commerce in communication by wire and radio.”(14) The state public utility commissions have the right to regulate such communications that are intrastate.(15) Prior to enactment of the Telecommunications Act of 1996, the FCC made a distinction between “basic” and “enhanced” communication services. Basic services were standard voice transmission services. Enhanced services were defined as:

services, offered over a common carrier transmission facilities used in interstate communications, which employ computer processing applications that act on the format, content, code, protocol, or similar aspects of the subscriber’s transmitted information; provide the subscriber additional, different, or restructured information; or involve subscriber interaction with stored information.

Examples of enhanced services are protocol processing, alarm monitoring, voice messaging and electronic publishing as well as the provision of access to data networks such as commercial online services and the Internet.(16) Providers of basic services were considered to be communications common carriers. Common carriers are prohibited from:

Unreasonably denying requested services or from unreasonably discriminating in the terms and conditions of service, and are subject to various other requirements and fees.(17)

Although the Telecommunications Act of 1996 categorizes services as “telecommunications” versus “information,” the FCC has, for the most part, continued to apply the same dichotomy construing what were considered “basic” services as “telecommunications” services and construing what were referred to as “enhanced” services as “information” services. For telecommunications services, other than those provided over the Internet as discussed below, the FCC requires that tariffs be filed. Tariffs are documents provided to the FCC which set forth the terms, rates and conditions under which services will be provided. Telecommunications service providers are required to file tariffs for ordinary telephone services and for the portion of frame relay services which involve transport, but not for the protocol relay or addressing component. Copies of tariffs are available for a fee from ITS, Inc. (http://www.itsi.com).

Using the Internet and encryption software, it is possible to set up a virtual private network that, although in many cases where multiple sites are involved would be significantly less expensive, provides functionality that can, many times, be substituted for a private frame relay network. To this date, the FCC has chosen not to require that tariffs be filed on or to impose universal access charges (which are imposed generally on telecommunications services) either for services of Internet access providers or for transmissions over the Internet backbones.(18)

V. Government Legacy Functions.

A. Initial Structure.

There are four (4) functions essential to the operation of the Internet that continue to be provided under contracts with agencies of the United States government.(19)

(1) The assignment of numerical addresses (Internet Protocol or “IP” numbers) to Internet users. Every computer while connected to the Internet is assigned a unique IP number. Numbers can be assigned dynamically to dial-up users so that any user has a unique IP number only during the time of the connection. Therefore, to provide dial-up access, ISP’s only need to have enough IP numbers to equal the number of users at any one time. Each second level domain name requires a permanent IP address. Without a change of technology, there cannot be more than four (4) billion unique numerical addresses. One-third (1/3) of those have already been assigned. The replacement of the IP protocol with proposed IPv6 as currently configured would allow for a virtually unlimited number of IP addresses.

(2) Management of the system of registering names for Internet users. This includes the system of assigning top-level domains, second-level domains, and so on. This function, combined with “(3)” below, is referred to as the “domain naming system” or “DNS.”

(3) The operation of the root server system. There are thirteen (13) root servers including the “A” root server operated by Network Solutions, Inc. (NSI). The “A” root server contains what is supposed to be the authoritative data base of the top level domain name servers including the servers for the international top level domain names and the servers for each of the country specific domain names. All the other root servers point to the “A” server for this information. The U.S. government plays a role in about half of these root servers. From letters I have seen, the other root servers are operated by volunteers who believe that they were given that authority by Jon Postel and/or his organization, IANA.

(4) Protocol assignment. This involves management of the protocols that are used to operate the Internet.

Initially, ARPA (the name was changed to the “Defense Advanced Research Projects Agency” or “DARPA” in 1984) contracted to have the domain name functions administered by the Stanford Research Institute (SRI). (20) Through a contract with DARPA, in 1987 SRI also took over the assignment of numerical addresses from ISI. ISI continued to oversee the operation of the root server system and the protocol assignments.

B. IANA.

Jon Postel was in charge of the Internet services provided by the Information Sciences Institute. Mr. Postel named his group at ISI the: “Internet Assigned Number Authority” or “IANA.”(21) After the responsibility for the international domain names and IP numbers was transferred to the Stanford Research Institute, IANA retained responsibility, under contracts with DARPA, for the other functions referred to above and later with the National Science Foundation, for managing the .us top level domain and registering other country specific top level domains. Eventually, IANA again assumed responsibility for assigning IP numbers and assigned blocks of Internet protocol numbers to three (3) non-profit organizations, APNIC for the Asia-Pacific region, RIPE NCC for Europe, and ARIN for the western hemisphere and South Africa(22) and also to a number of profit corporations for reassignment including @Home for the cable industry, AT&T and BBN Planet. Each of these five (5) organizations act as registries for the IP numbers they assign.

There has been a lot of misinformation about where IANA’s authority came from, but the reality is that it was always through government contracts.

The IANA home page reads:

The IANA is chartered by the Internet Society (“ISOC”) and the Federal Network Council (“FNN”) to act as the clearinghouse to design and coordinate the use of numerous Internet Protocol parameters. (See, http://www.iana.org.)

This information has been quoted and accepted by the media. None of it is true. As is pointed out in The Domain Name Handbook, supra, at 123, ISOC and FNC didn’t exist in 1988 when IANA was first formed. The authors of The Domain Name Handbook, supra, quote an email they received in response to a questioning of this authority from Anthony Rutkowski, the former president of the Internet Society. Mr. Rutkowski’s letter said in pertinent part:

Just to note – in case you’re writing history here – that although Jon and some others include this rendition, there is no such thing as a charter by either the Internet Society or the FNC. I was running the Society at the time that Jon distributed an e-mail message to the Society Board that was entitled “Charter.” He was told in subsequent messages that this meant nothing. Neither the Society as a non-profit corporation, or the FNC as an interagency committee [of the United States government] are in the business of “chartering.” What Jon prepared was an excerpt of the description of the activity for which he is funded by NSF. It’s an important function – but that is what it is – an NSF funded editor activity.

C. NSF.

In any event by the end of 1989, what had been the ARPANET had been replaced by NSFNet and certain regional networks.(23) In 1991, Congress passed the “High Performance Computing Act” which authorized NSF to provide computing and network infrastructure. At that time, NSF assumed responsibility for the registration of domain names. NSF redelegated the function of registering domain names from SRI International to Government Systems, Inc.(24) Finally, NSF entered into an agreement dated January 21, 1993 transferring domain name registration activities for the international top level domain names to Network Systems, Inc. (NSI).(25)

According to Article 7 of the agreement, NSI was to provide these services through September 30, 1998. So here we are in September of 1998, when I am writing this paper, and it is still not clear who will administer the international top level domain names after September 30. It also isn’t clear who will be responsible for allocating blocks of numerical addresses, managing the root server system and managing the Internet protocol suite in the future.

D. NSI.

NSI is, understandably, fighting hard to try to retain the current top level international commercial names that it administers: .com, .net and .org. Among other arguments, NSI claims that it has ownership rights in at least a portion of the DNS database.(26) The U.S. government would argue that since NSI has been administering these top level domain names under contract with NSF, NSI hasn’t acquired any rights in those top level domain names.(27)

By Amendment 4 to its contract with NSF, NSI was, in September of 1995, permitted to start charging $100 upfront for the first two (2) years and $50 per year thereafter for all second level domain names that it issued and to retain seventy (70%) percent of those funds.(28) Beginning April 1, 1998, NSI was no longer required to remit thirty (30%) percent of its funds as directed by NSF and dropped its fees to $70.00 for the first two (2) years and $35.00 per year thereafter.(29)

NSI has had to deal with a number of lawsuits relating to domain name disputes. NSI issued its first domain name dispute policy, apparently for the purpose of protecting NSI from lawsuits, on July 28, 1995. Revisions were issued on October 23, 1995 and September 9, 1995.(30) The most recent revision is dated February 25, 1998 and is available at http://rs.internic.net/domain-info/nic-rev03.html. This policy requires that any registrant agree to defend, indemnify and hold harmless Network Solutions and its officers, directors, employees and agents for any loss or damage relating to registration of a domain name. Since most web site registrants do not sign this document, much less personally fill out any of the information or even go to the site (this is ordinarily handled by the ISP for the registrant) this indemnity is likely enforceable, if at all, only against a very small percentage of registrants.(31) In the earlier version there was an arbitration clause that any disputes were subject to arbitration in San Diego, California, where NSI’s parent corporation was located. However, that arbitration procedure is no longer included in the latest domain name dispute policy.

The newest policy favors claimants to domain names that have registered their domain name on the principal register of the United States Patent & Trademark Office or the equivalent of any other country.(32) Where the owner of a registered mark provides written notice to a domain name registrant that the registrant’s domain name violates the trademark rights of the complainant, the domain name registrant may send a copy of such notice to NSI. If the registration predates the date the domain name registrant obtained the domain name, NSI may request proof that the registrant also has a registered trademark or service mark that pre-dates the date of the notice. If no proof of prior registration is provided, and assuming no court action is filed within thirty (30) days of NSI’s request for proof of registration, NSI may then put the registrant’s domain name on hold. Just to show how absurd a policy giving priority to registered marks can be, note that although registration in the United States Patent & Trademark Office takes an average of ten (10) months, registration in Tunisia can be completed in a matter of days and doesn’t require proof of use or intent to use the mark in Tunisia or anywhere else. See, http://www.domainprotect.com.

E. Policy Oversight Committee.

Over the years, the Network Working Group appears to have been replaced by the Internet Society (“ISOC”), the Internet Activities Board and other groups in which many internet insiders including Mr. Postel, are prominent. As more and more of the .com and .net second level domain names were taken, it became apparent that additional international top level domain names should be available. There are situations in which second level domain names can be generic such as “flowers,” “schools,” and “bricks” and there can be other situations where more than one company has a legitimate right to a particular mark such as “Delta.” Additionally, having more top level domain names would allow the grouping of web sites by category. Examples would be “.law” and “.med.” Jon Postel recognized this at least as early as May 3, 1996 when he proposed the addition of up to fifty new registries that would have the exclusive right to administer name assignments. He also recommended adding thirty new international top level domains per year for five years so that at the end the fifty new registries would each have exclusive right to administer three new top level domain names.(33)

IANA, the Internet Society (ISOC), the International Trademark Association (INTA) and other organizations elected representatives to the Internet International Ad Hoc Committee (IAHC) which was formed to review Mr. Postel’s proposal as modified by ISOC. There were eleven members elected to the committee. Mr. Postel is not listed as a member. Three of the eleven were attorneys.(34) The Committee issued its “Generic Top Level Domain Memorandum of Understanding” in which it proposed adding seven new generic top level domain names and twenty-eight new registrars who would compete among themselves to register second level domains in the generic top level domains. The committee appointed a “Policy Oversight Committee” to oversee administration of the top level domain names. The POC ultimately decided the additional top level domains should be:

.arts, . firm, .info, .nom, .rec, .shop and .web.(35)

The overall policies were set forth in the POC’s Memorandum of Understanding on the generic top level domain names space of the Internet domain name system (gtld-Mou).(36) The POC also decided that additional domain names could be added “if, in consultation with the PAB and CORE, the POC should later determine, that the interests of the users of the Internet would be best served by the creation of additional gTLDs.”

The question one would ask is what caused the POC to drop from the one hundred fifty domain names initially planned by Mr. Postel to only seven. The Committee was apparently strongly influenced by the difficulties having additional top level domain names would likely create for the owners of trademarks and service marks. The more top level domain names there are, the more opportunity there is for registration of second level domains that infringe existing trademarks and service marks. The counter-argument is that not allowing additional top level domain names to avoid wrongful use of trademarks is like prohibiting the building of additional shopping centers because that makes it more likely that service marks of existing stores will be infringed.

Although a number of criteria, including payment of $10,000, were established for anyone desiring to apply to be a registrar, and there were only certain times when applications have been allowed, more than ninety have been granted to date and it was contemplated that additional registrars will be established in the future.(37) Of course, with severe restrictions on the number of generic top level domain names, it was no longer possible to give exclusive registration rights for any one international top level domain name to any one registrant.

Probably the most controversial aspect of the POC proposal is the proposal to set up a domain name challenge panel (ACP) administered through the World Intellectual Property Organization of the United Nations (WIPO) arbitration and mediation center which is headquartered in Geneva, Switzerland. Anyone registering a second level domain name would be required to agree, as a condition of registration, that any decisions regarding the assignment, registration and use of a particular domain name would be subject to arbitration before the ACP. Then any third party could challenge a domain name holder’s right to use a domain name through this arbitration process. The POC also provided for any applicant registering a domain name to elect, at the time of registering such domain name, whether to be subject to on-line arbitration of all issues (which would include such issues as ultimate rights to use the claimed service marks and damages).(38)

F. NTIA Proposal.

In recent years, there have been individuals that have attempted to introduce additional top level domain names into the Internet root system. These groups and individuals argue that, except for restrictions needed only to avoid interfering with the proper operations of the Internet, the addition of top level domain names should be governed by the market; and whoever first offers a top level domain name and is able to attract sufficient second level domain names to make the use of such domain names financially feasible should be permitted to own and operate their own international top level domain name registries. These groups and individuals have strongly objected to the gTLD-Mou proposals arguing that the proposals would create an authoritative operation answerable to no one other than themselves and which would have no free market incentive to encourage improvements and efficiency. These individuals and groups (the free market parties) relayed their concerns and objections to Congress and the White House. Ira Magaziner, who has headed up various policy initiatives for the Clinton Administration, was assigned the responsibility for putting together a task force to deal with the issues. The National Telecommunications and Information Administration of the United States Department of Commerce headed by Mr. Magaziner came out with a preliminary proposal entitled the “Green Paper” which was published in the Federal Register on February 20, 1998 in which recommendations were made.(39) Among other things, in the “Green Paper” NTIA had proposed the formation of a non-profit corporation to be fairly representative of a variety of interested communities to take over the legacy functions; but, to avoid delay, proposed to go ahead and add five additional international top level domain names before the new non-profit corporation was formed. After receiving extensive comments, NTIA issued a second paper known as the “White Paper” on June 5, 1998, in which NTIA decided to leave the addition of any new international top level domain names to the new proposed non-profit organization and essentially urged all interested groups to get together and come up with solutions that address the needs and concerns of all interested parties subject to certain overall principles.(40) The principles were that the non-profit corporation was to be established in the United States, would assure stable, undisrupted, operation of the Internet, would be representative of all the various interests associated with the Internet, would operate in an open manner, would promote competition and would come up with balanced solutions related to the trademark issues.

As an indication of the determination of the Internet insiders with regard to the MoU-POC proposal, in January of 1998, just before the Green Paper was to come out, Jon Postel, who operates the root name server located at ISI, sent emails to the operators of the other root name servers telling them to point their servers to the ISI server bypassing NSI’s “A” root server. Six of the operators complied with this request. Mr. Postel announced that this was just a test of the server system but the timing would certainly indicate that it was a threat. The White House apparently pressured Mr. Postel into discontinuing the “test.”(41)

G. IFWP.

After the NTIA in the “White Paper” had urged all interested parties to work together on a plan, a number of trade associations representing diverse Internet interests put together a working group to attempt to reach a consensus on the structure for the proposed non-profit corporation. A committee, referred to as the Steering Committee for the International Forum on the White Paper (IFWP), was formed. Four meetings were held. The first meeting took place in Reston, Virginia on July 1-2, 1998, the second in Geneva, Switzerland on July 24-25, 1998, the third in Singapore on August 11-13, 1998 and the fourth in Buenos Aires, Argentina on August 20-21, 1998. (42) No resolution has been reached by these parties to date. Consequently, it is possible that the NSF contract with NSI, that is due to expire on September 30, 1998, may have to be continued and IANA will continue to administer the functions that it oversees for some additional time.

1 The writer is currently Co-Chair of the Subcommittee on Policies for Managing Generic Top Level Domains of the Special Committee on Trademarks and the Internet of the Intellectual Property Law Section of the American Bar Association. The views expressed in this paper are those of the writer alone.

2 Katie Hafner and Matthew Lyon, Where Wizards Stay Up Late, Chapter 1 (1996).

3 Where Wizards Stay Up Late , id. at 40-42. As stated, the original purpose of the ARPANET was to allow communication and the sharing of resources between research computers. The media has reported, and it has been repeated extensively, that ARPANET was originally set up to allow military communications to survive a nuclear strike. The development of packet data technology at Rand Corporation, which was eventually useful in setting up the ARPANET, was done for this purpose, but that was never the purpose of ARPANET. Where Wizards Stay Up Late, supra, 9-10.

4 Where Wizards Stay Up Late, supra, at 102.

5 Where Wizards Stay up Late, supra, at 141.

6 Where Wizards Stay Up Late, supra, at 144.

7 Where Wizards Stay Up Late , supra, at 145.

8 Where Wizards Stay Up Late, supra, at 245 and 249. See, also, Ellen Rony and Peter Rony, The Domain Name Handbook, 1998 at 91.

9 Where Wizards Stay Up Late, supra, at 226.

10 Kate Gerwig, Service Providers Still In Peering Dither, InternetWeek, 8/31/98.

11 A packet is a set of data organized in a specific way for transmission such as over the Internet. See, e.g., Harry Newton, Newton’s Telecom Dictionary, Flatiron Publishing (1998).

12 Where Wizards Stay Up Late, supra, at 252-253.

13 See 17 U.S.C. §105.

14 47 U.S.C. §151.

15 See, e.g., O.C.G.A. §46-2-20.

16 See, Kevin Werbach, Digital Tornado, The Internet and Telecommunications Policy, March 1997, Opp. Working Paper No. 29 available at:  http://www.fcc.gov/Bureaus/OPP/working_papers/oppwp29pdf.html.

17 See, Kevin Werbach, Digital Tornado, The Internet and Telecommunications Policy, supra.

18 See, e.g., The Federal Communications Commission Report To Congress released April 10, 1998 entitled “The Matter of Federal-State Joint Board On Universal Service.” (http://www.fcc.gov/Bureaus/Common_Carrier/Reports/fcc98067.html) Note that the United States Court of Appeals for the 8th Circuit recently held that FCC rules not allowing local telephone companies to assess access charges on internet service providers is a proper exercise of the FCC’s jurisdiction. See, Southwestern Bell Company, Bell Telephone Company, et al. v. Federal Communications Commission (U.S. Ct. App.). (http://www.wulaw.wustl.edu/8th.cir/Opinions/980819/972618.P8)

19 See, National Telecommunications and Information Administration of the United States Department of Commerce (NTIA) so-called “White Paper” entitled Management of the Internet Domain Name System dated June 5, 1998 (http://www.ntia.doc.gov/ntiahome/domainname/6_5_98dns.htm)

20 The Domain Name Handbook, supra, at 115.

21 National Telecommunications and Information Administration “White Paper,” supra.

22 The Domain Name Handbook, supra, at 138 and 123. See, also, the NTIA White Paper, supra.

23 See Where Wizards Stay Up Late, supra, at 256.

24 The Domain Name Handbook, supra, at 126 and 127.

25 http://rs.internic.net/nsf/agreement/agreement.html

26 The Domain Name Handbook, supra, at 171.

27 The original database was, of course, transferred from Government Systems, Inc. to NSI at the direction of NSF. Under the circumstances applicable here, it is unlikely that there are any enforceable copyrights in the additions to the database made by NSI. See, Feist Publications, Inc. v. Rural Telephone Service Co., 499 U.S. 340 (1991). Anyone should have the right to copy the database to the extent it is openly accessible. Whether NSI would be required to turn over any confidential portions of the database would depend on the interpretation of the NSF-NSI contract which is beyond the scope of this paper. Copyright issues for this presentation are being addressed in other materials being provided with this reference manual. For other articles about copyright law, see our law firm web site at http://www.internetlegal.com.

28 http://rs.internic.net/nsf/agreement/amendment4.html

29 See the Internic Registration and Renewal (re-registration) fees: Fact Sheet (http://rs.internic.net/fees/facts.html)

30 The Domain Name Handbook, supra, at 142.

31 Of course NSI would probably argue that the ISP is acting as an agent and, acting on behalf of its customer, has agreed to the indemnification provision by submitting the application to NSI. For the enforceability of clickwrap and similar agreements, see the portion of the paper provided by this author on Electronic Commerce relating to Online Contracting included with these seminar materials.

33 The Domain Name Handbook, supra, at 522.

34 The Domain Name Handbook, supra, at 524.

35 See the gltd-Mou Request for Comments Results – Last Update March 16, 1998 (http://www.gtld-mou.org/docs/rfc-results.htm#97-02).

36 http://www.gtld-mou.org/gTLD-MoU.html

37 It would seem that having an unlimited number of registrars competing with each other and registering the same domain names would create conflicts and disagreements about who registered a particular domain name first; however, individuals working on the issue say that with available software, this should not be a problem.

38 See the Memorandum of Understanding for the Internet Council of Registrars (CORE-Mou) a copy of which is available at http://www.gtld-mou.org/docs/core-mou.htm.

39 (http://www.ntia.doc.gov/ntiahome/domainname/dnsdrft.htm)

40 See http://www.ntia.doc.gov/nitahome/domainname/6_5_98dns.htm.

41 Rajiv Chandrasekaran, Internet Reconfiguration Concerns Federal Officials, The Washington Post, 1/31/98.

42 See http://www.geneva.ifwp.org/

The information above is provided for general educational purposes and not as legal advice. Laws in areas in which we practice change continually and also vary from jurisdiction to jurisdiction. Therefore no visitor to our site should rely on any of the articles provided for legal advice, but should always consult their own attorney regarding legal matters.

© 1998, Rob Hassett, Atlanta, Georgia. All Rights Reserved.

The Law of the Internet – Copyright

By:  Rob Hassett

Hassett Cohen Goldstein, LLP

990 Hammond Drive

Suite 990 Atlanta, GA 30328

(770) 393-0990

www.internetlegal.com

The writer wishes to thank his wife, Lynn Hassett, an attorney in his law firm, and Adam Alexander, formerly a law student at Emory University Law School, now practicing law at the firm of Cooper & Scully, PC in Dallas, Texas, for their help in preparing this section of these materials.

Background and Summary

This article first appeared in the program materials for the internet law seminar sponsored by NBI, Inc. which was held in Atlanta, Georgia on February 18, 1998. This intermediate level article addresses the subject of copyright law as it relates to the internet. (18 Pages)

I. INTRODUCTION

Article I, Section 8 of the Constitution of the United States reads in pertinent part:

The Congress shall have power …;

….

To promote the Progress of Science and useful Arts by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;

Protection of works of authorship that are fixed in any “tangible medium of expression” is governed by Chapters 1 through 8 and Chapter 10 of Title 17 of the United States Code.(1) State law with respect to such works is pre-empted by federal law.(2) State law still applies with respect to rights in sound recordings fixed before February 15, 1972 and with respect to works that are not fixed in any tangible medium of expression.

The United States has been a party to numerous treaties regarding copyright law. The most important treaty is the Berne Convention to which the United States became a party in 1989. The Berne Convention provides that each member nation will protect the works of each other member nation’s citizens at least as well as it protects the works of its own citizens; as well as sets forth standards that must be met regarding the protection of works of authorship by all member nations. The process of proposing amendments to the Berne Convention is administered by the World Intellectual Property Organization (“WIPO”) which is an agency of the United Nations headquartered in Geneva, Switzerland.(3)

II. COPYRIGHTABLE SUBJECT MATTER

A. General Principles

17 U.S.C.A. §102 reads in pertinent part:

(a) Copyright protection subsists, in accordance with this title, in original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated either directly or with the aid of a machine or device. Works of authorship include the following categories:

(1) Literary works;

(2) Musical works, including any accompanying words;

(3) Dramatic works, including any accompanying music;

(4) Pantomimes and choreographic works;

(5) Pictorial, graphic, and sculptural works;

(6) Motion pictures and other audiovisual works;

(7) Sound recordings; and

(8) Architectural works.

(b) In no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery regardless of the form in which it is described, explained, illustrated, or embodied in such work. (Emphasis added.)

In part (b), Congress codified the pre-existing case law that held that copyright law protects the expression of an idea but not the idea itself. It is thought that the idea/expression dichotomy is required by the First Amendment prohibition against enactment of any law that would abridge freedom of speech.(4) The basic concept is that copyright cannot monopolize an idea or concept. This has resulted in rules that are especially important to the Internet including:

(1) If there are only a limited number of ways to express an idea (for example, to write a computer program accomplishing a particular function) the idea and expression are said to merge and the coding is not protected by copyright law.(5)

(2) Scenes a` faire, which are stock literary devices such as incidents, characters or settings which, as a practical matter, are indispensable or at least standard in the treatment of a given topic are not protected by copyright law. The reasoning is that standard expression is so close to the non-protectable idea itself that the expression provides nothing new or additional over the idea, see, e.g., Atari, Inc. v. North American Phillips Consumer Electronics Corp., 672 F.2d 607 (7th Cir.), cert. denied, 459 U.S. 880 (1982).

(3) Expression is also not protectable where it is required by particular standards in the industry or considerations of efficiency, see, e.g., Data East U.S.A., Inc. v. Epyx, Inc., 862 F.2d 204 (9th Cir. 1989).

Additionally, whether an aspect of a work is an idea or expression of an idea is a matter of degree. Exact copying of the language of a novel, play or computer program is a copyright infringement. Writing a novel using no more than the same overall general plot as another novel or writing a computer program performing the same function as another is not a copyright infringement. Paraphrasing a novel or following a detailed plot outline is an infringement. See, Twin Peaks Productions, Inc. v. Publication Int’l, Ltd., et al., 996 F.2d 1366 (2d Cir. 1993) (finding detailed plot summaries of television series to be infringement). Paraphrasing linear computer code or following the structure, sequence and organization of that code has been held to be an infringement.(6)

B. Non-Literal Elements of Computer Software

The non-literal elements of computer software are elements of the software other than the source code and object code such as the overall layouts, menus, structure and look and feel. At one point there appeared to be a significant amount of protection for the non-literal elements of computer software. The courts even went so far as to apply the notion that taking the “total concept and feel” of a computer program (which had been found to be illegal with respect to television characters)(7) constitutes a copyright infringement.(8)

In the 1990’s the courts began restricting protection of non-literal elements in computer programs under copyright law. The two leading cases in this regard are Computer Associates, Inc. v. Altai, Inc.(9) and Lotus Dev. Corp. v. Borland Int’l, Inc.(10)

In the Altai case, Computer Associates had developed a scheduling program and, separately, an “ADAPTER” to allow the scheduling program to be operated on a number of different operating systems. Altai, a competitor of Computer Associates, desired to develop an “adapter type” program to allow its scheduling program to be used on an additional operating system. Altai hired an employee of Computer Associates who, without Altai’s knowledge, brought over code from the ADAPTER program. After Computer Associates filed suit, Altai realized what had happened, admitted liability for the direct copying and reconstructed the program without any literal copying. The court had to determine whether the non-literal copying constituted an infringement. The Court of Appeals approved the statements of the district court below that had said “references to structure, sequence, and organization” are no longer necessarily relevant to how computer programming is done. With object oriented programming, and especially with Windows based object oriented programming, such as Visual Basic, it is difficult to point to any particular sequence of a computer program. The court went on to describe its three step test for determining what, if any, of the non-literal elements of a computer program are protectable under copyright law.

The first step is “abstraction” where the court goes through a sort of “reverse engineering.” The court determines what are the various levels of abstraction of the program. At the lowest level are the actual instructions organized into a hierarchy of modules. At a higher level are the functions of each module. (Note that a selection and organization of modules could involve creativity that is protectable if at that level the program survives Step 2 “filtration” (discussed below), as compilations may be protectable under Section 103 of the Copyright Act.)

The second step is filtration of each level of abstraction. Here the court filters out the following at each level:

(a) Elements that constitute ideas or are dictated by efficiency;

(b) Elements dictated by external factors such as standard techniques rather than creative originality on the part of the programmer; and

(c) Elements taken from the public domain.

The third step is the comparison test. From the filtration step, the court has determined what of the plaintiff’s program is protectable expression and then the court determines whether or not the “defendant copied any aspect of this protected expression, as well as an assessment of the copied portion’s relative importance with respect to the plaintiff’s program.” The Court of Appeals also held that the district court’s appointment of its own expert witness was appropriate. Following these tests, the court held that there was no infringement. The court did hold that there was a possibility of misappropriation of trade secrets. The court said that state trade secret law is not pre-empted under Section 301 of the Copyright Act.

In Lotus v. Borland, supra, Borland had developed a competitive spreadsheet program that included an option which provided “a virtually identical copy of the 1-2-3 menu tree” contained in the Lotus spreadsheet program. There was no contention that the underlying code or protected elements of computer screen displays had been copied. Lotus’ only contention was that Borland had unlawfully copied its menu command hierarchy. The trial court concluded that Lotus’ menu hierarchy was protectable expression because, for example, many different words could be used for the same commands. The Court of Appeals reversed. Referring to 17 U.S.C. §102(b) (quoted above), the Court of Appeals said:

We hold that the Lotus menu hierarchy is an uncopyrightable method of operation. We do not consider whether it could also be a system, process, or procedure.

The Supreme Court granted certiorari to Lotus on an appeal from the First Circuit Court of Appeals decision, but the Supreme Court affirmed by default when it turned out that the Justices were equally divided on the issue.(11)

As courts became reluctant to protect non-literal elements of computer programs under copyright law, courts, at the same time, became more comfortable with granting patent protection to computer programs.(12)

Shifting much of the protection for non-literal elements of computer programs from copyright to patent law has created a situation that makes it much more difficult for start up companies to protect their software because of the much higher expense of filing for patent protection. In the writer’s view it also allowed for monopoly protection of some matters that would not have ever been protected by copyright law that are too easy to create in the software context to fairly be the subject of patent protection. There is so much programming code created every day that much of the software for which patent protection is granted is already being used by others in the industry who just have not gone to the trouble of applying for a patent. The writer submits that a modified hybrid of trade secret, patent and copyright law should be developed for the protection of computer software.

C. Screen Displays – Web Pages

The Copyright Office has taken the position that registration of an underlying computer program automatically covers the screen displays. The applicant need only describe the work as “computer programs.” However, if the application includes “screen displays” in its description of the work, the applicant will be required to include a printout or videotape of the screen display showing sufficient copyrightable authorship to support a claim to copyright in the screen display.(13) Note that computer programs are generally registered as literary works on Form TX (“TX” refers to “text”). For works on the Internet that are predominantly visual works of art, which is the typical case now, Form VA (“VA” refers to “visual arts”) should be used. Where audiovisual authorship predominates, which is likely to be more and more often the case in the future for Internet sites, the work should be registered as an audiovisual work on Form PA (“PA” refers to “performing arts”).

D. Data Bases

Also important to Internet issues is the protectability status of online data bases. An author has copyrights in his original contributions to a compilation, but not in the underlying works being used.(14) At one time there was a split in the circuits about whether compilations of pure facts could be protected by copyright if there was no originality involved based on the labor and effort used in the compilation. See, e.g., Leon v. Pacific Telephone & Telegraph Co., 91 F2d 484 (9th Cir. 1937). This “sweat of the brow” line of cases was overruled in Feist Publications, Inc. v. Rural Telephone Service Co.,(15) where the Supreme Court held that there was no copyright infringement in copying a telephone book because there was no creativity involved in compiling it. The Court pointed out that placing names in alphabetical order and adding addresses was standard and not creative.(16) In Matthew Bender & Company, Inc. v. West Publishing Co.,(17) it was held that copying West Publishing compilations of Federal and District Court cases was not an infringement. West had successfully argued in West Publishing Co. v. Mead Data Central, Inc.,(18) that it had a protectable interest in selection of the order in which it assembled the case decisions.

At the December 1996 WIPO conference in Geneva, the United States representative proposed that the Berne Convention be amended so that the time and effort that went into developing data bases would be sufficient to allow for copyright protection – the current rule in Europe. The United States scientific community and others effectively lobbied the White House to withdraw this proposal.(19)

III. EXCLUSIVE RIGHTS

Section 106 of the Copyright Act reads in pertinent part:

Subject to Sections 107 through 120, the owner of copyright under this title has the exclusive rights to do and to authorize any of the following:

(1) To reproduce the copyrighted work in copies or phonorecords;

(2) To prepare derivative works based upon the copyrighted work;

(3) To distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease or lending [this provision does not apply to redistribution of an authorized copy, see Section 109 of the Copyright Act];

(4) In the case of literary, musical, dramatic, and choreographic works, pantomimes and motion pictures, and other audiovisual works, to perform the copyrighted work publicly [this provision does not apply to sound recordings, see Section 114 of the Copyright Act];

(5) In the case of literary, musical, dramatic, and choreographic works, pantomimes and pictorial, graphics, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly; and

(6) In the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission [this provision is modified by Section 114 of the Copyright Act – see the discussion of “musical works” below].

To the extent that each of these exclusive rights have special relevance to online use, they are discussed in Part VIII below. For an in-depth discussion of how the exclusivity of these rights is affected by the doctrine of fair use under Section 107 of the Copyright Act, see the article on Fair Use In New Media Technology by Rob Hassett and Adam Alexander included with these materials.

IV. OWNERSHIP

Copyrights in a work of authorship vest initially in the individual author unless the work is a “work made for hire” in which case the employer is considered to be the author.(20) A transfer of copyright ownership may only be made in writing.(21) A work may be a work made for hire only if it:

(1) Is a work prepared by an employee within the scope of his or her employment, or

(2) It is a work prepared as a contribution to a collective work, an audiovisual work or one of the other categories of work listed under the definition of “work made for hire” under Section 101 of the Copyright Act and “the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire.”

Ownership can be a problem where a company employs another company as an independent contractor to create a web site. Under those circumstances, without a writing to the contrary, the commissioning company would not own the copyrights in that web site.(22) This is contrary to the law that applied before the 1976 Copyright Act became effective in 1978. Where a company pays for an independent contractor to develop a web site and does not have a written agreement as to ownership, the company would arguably have an implied license to do whatever it wished with the web site, but couldn’t prevent the independent contractor from also using those portions of the web site developed by the independent contract. Of course, the independent contractor would not be permitted to use materials contributed by others and would be subject to any privacy and publicity rights of any individuals whose name and/or likeness appeared in the web site.

V. REGISTRATION

Prior to January 1, 1978, registration was required to maintain ownership of a copyright in a work. Currently, all that is required for ownership is that the work be fixed in a tangible medium of expression. Registration in the Copyright Office is still advisable. With some minor exceptions, unless a work is registered before an infringement occurs, the copyright owner may not recover statutory damages (damages which a judge may award under Section 504 without proof) or attorney’s fees (which a judge may otherwise award under Section 505).(23) Additionally, with some minor exceptions, registration is required prior to the filing of a lawsuit for copyright infringement.

VI. NOTICE OF COPYRIGHT

Prior to March 1, 1989, when the United States became a member of the Berne Convention, it was required that copyright notices be placed on works in order to maintain ownership in the copyrights in those works. Notice of a copyright is no longer required for ownership. Nevertheless, it is recommended that copyright notices be placed on any work. Adding the notice prevents a defendant’s claim of innocent infringement in mitigation of damages on the grounds that the infringer did not realize that a copyright was claimed. A copyright notice on visually perceptible copies consists of the following:

© [year of first publication] [name of the copyright owner]

Note that the word “Copyright” or the abbreviation “COPR” are also both acceptable but in order to comply with requirements under what is known as the U.C.C. Convention, it is recommended that a “©” be used. It is also advisable to add the language “all rights reserved” at the end of the notice as that is still required in some Latin American countries. Where the work is a sound recording and the owner wishes to give notice of the copyrights in the sound recording, a “p in a circle” should be used.(24)

VII. MUSIC

Rights relating to music are being treated separately in these materials. This is because the law relating to some aspects of music is different and, also, because, as a result of industry practices, music rights are handled differently from rights in other works.

There are two separate sets of rights relating to every sound recording and/or audiovisual work involving music. First, there are rights in the underlying song or composition. These typically belong to the author – the songwriter or composer – and to their publisher. Second, there are rights in the sound recording itself. These typically belong to the record company.

1. Licenses of Rights in the Underlying Song

Before any discussion as to the rights of the author of a musical work, it must be determined who the author is. Generally, the author is the actual writer or co-writers. However, where the writer is employed by another or is an independent contractor, the work may be deemed a “work made for hire”, and the author, and owner of the copyright of the work, may be the employer or person who commissioned the work. See, the discussion regarding “OWNERSHIP” hereinabove.

With respect to songs that are released as singles, or as part of albums, most songwriters enter into agreements with publishers who pitch the song to record companies and performers and handle administrative matters for the writer. Most songwriters and composers are also affiliated with either the American Society of Composers, Authors and Publishers (“ASCAP”) or Broadcast Music, Inc. (“BMI”). These organizations license their catalogs of songs on a yearly basis to radio stations, television stations, restaurants, and other operations that publicly perform music. ASCAP and BMI then allocate and distribute the money (performance royalties) they receive based on the relative volume of use of the songs in their catalogs. The royalties are usually evenly divided between the publisher and the songwriter. However, where music is written as “works made for hire,” as is often the case for music for commercials or product jingles, the composer may not be entitled to ASCAP and/or BMI performance royalties.

In addition to performance royalties, songwriters may also receive what are called mechanical royalties. Mechanical royalties are based on the number of copies of the sound recording of the song distributed. After a recording of the song is released, other performers are permitted to record their versions of the song, provided they comply with the compulsory license provisions of Section 115(c) of the Copyright Act and pay the set royalty (currently 6.95 cents per song per copy of any recording sold). This set royalty is referred to as the “statutory rate”. See 37 CFR § 255.3(h). The rate is determined by ad hoc Arbitration Royalty Panels appointed and convened by the Library of Congress. Because the compulsory processes – such as the statutory provisions for accounting and notice provisions – are somewhat cumbersome, most record companies do their own negotiating of mechanical royalties for new recordings of previously released songs. The statutory rate is still used as a basis. The Harry Fox Agency in New York City administers the issuance of mechanical licenses and the receipts of royalties for many publishers of previously recorded songs.

Sometimes producers wish to include pre-existing music in their audiovisual work. For that purpose, the producer must acquire synchronization licenses for use of music embodied in their audiovisual work.(25) Synchronization licenses are generally negotiated with either the publisher or the Harry Fox Agency.

2. Rights in Sound Recordings

Rights in sound recordings are treated differently. Traditionally there have been no performance rights in sound recordings. Record companies owning copyrights in the sound recordings of songs on their records, earn income from the sale of the records and from the synchronization of those sound recordings for film, television, and other audiovisual uses. Thus, unlike the owner of the underlying song, record companies do not receive any performance royalties from ASCAP, BMI or anyone else, for radio airplay and other public performance uses of the recording.

It should be noted that in many other countries, especially in Europe, the owners of sound recordings do have performance rights in sound recordings. However, because the United States does not grant reciprocal rights, no royalties are collected for the performance rights for sound recordings owned by American companies when those songs are played, for example, on radio stations in countries that do recognize this right.(26)

There is one exception to the rule that U.S. law does not allow for the payment of performance royalties for performances of sound recordings. On November 1, 1995, President Clinton signed into law the Digital Performance Right in Sound Recordings Act of 1995 which provides for owners of sound recordings and recording artists to receive performance royalties for certain digital performances. This Act is discussed below under Internet related issues.

VIII. SPECIAL INTERNET ISSUES

A. Reproduction

Under Section 106(1), a copyright owner has exclusive right to “reproduce the copyrighted work … ” Whenever a computer program is used (or a web page is viewed) a copy is made on to the random access memory (“RAM”) of a computer. When copies are transmitted over the Internet, transitory copies are made throughout the transmission. Copying into RAM in conjunction with using a computer program has been held to be a violation of the exclusive rights of the copyright holder under Copyright Act Section 106(1).(27) The U.S. representative at the WIPO conference in December of 1996 urged amending the Berne Convention to explicitly provide that the making of transitory copies in connection with Internet transmissions would be an infringement. This proposal was successfully opposed by the telephone companies and Internet Service Providers (“ISP’s”) because they were concerned that it would create an additional source of liability. See, John Browning Africa 1 Hollywood 0 Wired Magazine, March 1997, at 61. Nevertheless, a statement was issued that: “the reproduction right … fully appl[ies] in the digital environment, and particularly to the use of digital works in digital form … [and] that the storage of a protected work in digital form in an electronic medium constitutes a reproduction.”(28)

Although no court has decided the issue at this time, it is not clear whether the making of transitory copies as part of Internet transmissions constitutes the sort of reproduction governed by §106(a) but the copying onto RAM in connection with viewing a copy is certainly an infringement.(29) Telephone companies and routers are probably not liable for their part in transmissions over the Internet which do involve the making of transitory copies.(30)

B. Performances

Because the licensing rights for copying and distribution of music are handled separately from the licensing of the rights of public performances, it is necessary to differentiate online copying and distribution from online performances. The writer knows of no cases on this issue to date. Several authors have asserted that where performances can be viewed in the process of downloading, there is probably a performance, and otherwise there is not.(31)

C. Criminal Liability

Until recently, Section 506(a) of the Copyright Act read:

Any person who infringes a copyright willfully and for purposes of commercial advantage or private financial gain shall be punished as provided in Section 2319 of Title 18. [Emphasis added]

Because of the requirement of “commercial advantage” or “private financial gain” it was recently held that individuals placing copyrighted materials on the Internet where users could make copies for free had not committed any crime. This leaves copyright owners vulnerable to actions by individuals who are not concerned about civil liability. Congress has remedied this situation by passage of the “No Electronic Theft” (“NET”) Act which was signed into law by President Clinton on December 16, 1997. The Act changes Section 506(a) to read:

Any person who infringes a copyright either willfully –

(1) For purposes of commercial advantage or private financial gain; or

(2) By the reproduction or distribution, including by electronic means, during any 180/day period, of one or more copies or phonorecords of one or more copyrighted works, which have a total retail value of more than $1,000 shall be punished …(32)

D. Liability of ISP’s and OSP’s

Section 230(c)(1) of the Telecommunications Act of 1996 states:

Treatment of publisher or speaker. — No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.

This statute has been held to bar liability of an ISP or OSP for defamatory or obscene material posted by one of its customers.(33) This statutory limitation of liability for ISP’s and OSP’s has not, to date, been extended to copyright.

Two bills are now pending in Congress that would limit the liability of ISP’s and OSP’s for copyright infringement by adding a Section 512 to the Copyright Act.(34) In the meantime, ISP’s and OSP’s must rely on court decisions.

In Religious Technology Center, et al. v. Netcom On-Line Communication Services, Inc.,(35), the plaintiff held the copyrights in the Church of Scientology’s writings. A former member of the Church, Erlich, had placed Church of Scientology materials on a news group on the Internet through a bulletin board service connected to the internet through the national Internet service provider, Netcom. The plaintiff sued Netcom for its involvement in the claimed copyright infringement. Netcom moved for summary judgment. The court first decided that Netcom was not liable for direct infringement. Netcom had argued that Erlich, not Netcom, had actually placed the copies on the Netcom server. The court held that following the logic that Netcom had not actually made the copies and for policy reasons, Netcom would not be liable for direct infringement. The Court held that, unlike in Playboy Enterprises v. Frena,(36) Netcom was not liable for distribution or for publicly displaying the copies. In rejecting the argument that Netcom could be liable for direct infringement for distribution and public display, the court said in pertinent part:

No purpose would be served by holding liable those who had no ability to control the information to which the subscribers have access, even though they might be in some sense helping to achieve the Internet’s automatic “public distribution” and the users’ “public” display of files.

The court next dealt with the plaintiff’s contributory infringement claim against Netcom. The court said in pertinent part:

[Contributory] infringement will be established where the Defendant “with knowledge of the infringing activity,” induces, causes or materially contributes to the infringing conduct of another.

The court held that there was a fact question about whether Netcom, after receiving notice, should have known that the copies that Erlich was posting were infringing. It stated that:

[w]here a DBS operator cannot reasonably verify a claim of infringement, either because of a possible fair use defense, the lack of copyright notices on the copies, or the copyright holder’s failure to provide the necessary documentation to show that there is a likely infringement, the operator’s lack of knowledge will be found reasonable and there will be no liability for contributory infringement for allowing the continued distribution of the work on its system.

Finally, the court rejected the contention that Netcom was vicariously liable which requires:

[that] the Defendant:

(1) Has the right and ability to control the infringer’s acts; and

(2) Receives a direct financial benefit from the infringement.

The Court found that there was no direct financial benefit because Netcom received the same monthly sum regardless of whether Netcom did or didn’t post the material.

E. Framing

“Framing” is discussed in the segment of these materials relating to unfair competition. Although the writer knows of no case on point, it is likely that a court would hold that framing constitutes a derivative work.

F. Music Issues

On November 1, 1995, President Clinton signed the Digital Performance Right In Sound Recordings Act of 1995 into law. This act is codified in Sections 106(6), 114, 115(c)(3) and 115(d) of the Copyright Act. This new addition to the Copyright Act provides a performance right in sound recordings when the sound recordings are transmitted over a service that is either interactive (the customer can choose the song they wish to hear) or where the sender is charging a subscription fee. There is a provision for compulsory (referred to in the statute as “statutory”) licensing where the sender is charging a fee with the exception that the statutory licensing set up does not apply in certain situations where members of Congress felt that a service would in fact be providing copies, rather than performances, of the sound recordings.(37) Where the service is interactive (the customer can choose which song they wish to download) or in the other situations described in Endnote 37 below, the sender is required to negotiate a license with the owner of the sound recording, but may follow a compulsory procedure to pay a set rate for a mechanical license for the underlying compositions.

Other than for subscription and interactive services, there is no performance license required, even on the Internet, for sound recordings. However, licenses are almost always necessary when a musical work and sound recordings, not owned by the web site owner, are used. Examples are:

(1) It may be necessary for the web site developer/manager to copy musical works and sound recordings onto the server (they may not be playable directly from a purchased copy) in which case a reproduction license for the underlying work and sound recording would be required;

(2) Viewers of the web site may copy, or be capable of copying, the musical work and the sound recording onto their own computer which would also require a reproduction license (since Real Audio and Real Player do not allow for a viewer to make copies of a recording of an audiovisual work, the writer does not believe a reproduction license would be necessary to cover those transmissions);

(3) If the music is performed as the web site is being downloaded, a performance right for the underlying musical work would be required;

(4) If a sound recording of a musical work is being synchronized with an audiovisual work, a synchronization license (a form of the right to make derivative works) would be required for both the musical work and the sound recording.(38)

ENDNOTES

1 Chapter 9 of Title 17 provides protection relating to the design of semi-conductors. Chapter 11 prohibits the unauthorized recording of live musical performances.

2 See 17 U.S.C.A. §301.

3 http://www.wipo.org/.

4 Nimmer on Copyright §1.10 [B] [2].

5 Nimmer, at §2.18[J]. See also, Kearn River Gas Transmission Co. v. Coastal Corp., 899 F.2d 1458, 1464 (5th Cir.), cert. denied 498 U.S. 952 (1990).

6 Whelan Associates, Inc. v. Jaslow Dental Laboratory, Inc., 797 F.2d 1222 (3rd Cir. 1986).

7 See, Sid and Marty Krofft Television Productions v. McDonald’s Corp., 562 F.2d 1152 (9th Cir. 1977).

8 See, generally, Scott On Computer Law, Second Edition, Section 3.47(C)(1).

9 982F.2d 693 (2d Cir. 1992).

10 489 F.3rd 807 (1st Cir. 1995). See also, Softel, Inc. v. Dragon Medical & Scientific Communications, Inc., 118 F.3rd 955 (2nd Cir. 1997).

11 116 S.Ct. 804 (1996).

12 See the paper by Bill Marvin on Patent Law included with these materials.

13 See, 53 Fed. Reg. 21817 (June 10, 1988).

14 See, e.g., 17 U.S.C. § 103.

15 499 U.S. 340 (1991).

16 See, also, Bell South Advertising & Publishing Corp. v. Donnelley Information Publishing, Inc., 999 F.2d 1436 (11th Cir.1993); and Warren Publishing, Inc. v. Microdos Data Corp., 115 F.3rd 1509 (11th Cir. 1997).

17 1997 W.L. 266972 (S.D. N.Y. May 19, 1997).

18 616 F. Supp. 1571 (D.Minn. 1985) affirmed 799 F.2d 1219 (8th Cir. 1986).

19 John Browning, Africa 1 Hollywood 0, Wired Magazine March 1997 at 61 (www.wired.com/5.03/).

20 §201(a) and (b) of the Copyright Act.

21 See, §204 of the Copyright Act.

22 See, e.g., Community For Creative Non-Violence v. Reid, 490 U.S. 730 (1989) (holding that the employer of an artist as an independent contractor to create a sculptural work did not own the copyrights in the sculptural work after paying for it).

23 See generally, § 412 of the Copyright Act.

24 Copyright Act §§ 401 and 402.

25 Sometimes performance licenses are also required. ASCAP and BMI do not cover every type of performance – for example, they do not grant performance licenses to, or collect payments from, movie theaters.

26 Howard Siegle & Paul Karl Lukacs, A Mega-Million Dollar Musical Mea Culpa, Are U.S. Record Companies Overlooking A Fortune In International Public Performance Royalties?, 15 Ent. & Sports Law., Vol. 15., No. 303, Fall 1997.

27 Mai Systems Corp. v. Peak Computer, Inc., 991 F.2d 511 (9th Cir. 1993).

28 Meca Jung and Stephen D. Rosenboro, The WIPO Treaties, The International Battle Over Copyright Cyberturf, 15 Ent. & Sports Law., Vol. 15, No. 3, Fall 1997.

29 Mai Systems Corp. v. Peak Computer, Inc., supra. Note 27.

30 See, e.g., Religious Technology Center v. Netcom On-Line Communication Services, Inc., 907 F.Supp. 1361 (N.D. Cal. 1995) (holding that an ISP wouldn’t be directly liable for material placed on its server because it would not be reasonable to hold ISP’s liable and because ISP’s are not actually the ones making the copies).

31 Jeffrey P. Cunard, et al. Internet & Online Law, Section 6.08(4) (Kent B. Stuckey, ed., 1997).

32 See the information posted regarding H.R. 2265 at http://thomas.loc.gov.

33 See, e.g., Zeran v. American Online, Inc., 958 F.Supp. 1124 (E.D. Va. 1997), aff’d 129 F.3d 327 (4th Cir. 1997).

34 See, generally, H.R. 2180 and S. 1146, http://thomas.loc.gov/

35 907 F.Supp. 1361 (N.D. Cal. 1995).

36 839 F.Supp. 1552 (N.D. Fla. 1993).

37 The owner of the sound recordings is not required to provide a statutory license both where the license is interactive and in other situations where the drafters of the legislation felt that such transmittal could substitute for purchases of copies of the sound recordings such as situations where more than four (4) selections by the same artist are played in any three-hour period, more than three selections in total from any one sound recording are played in any three-hour period, and where a list of the sound recordings to be transmitted is being provided in advance.

38 For an in-depth analysis relating to incorporating music into a web site, see, Al Kohn and Bob Kohn, Kohn on Music Licensing, 1236 – 1250 (1996).

The information above is provided for general educational purposes and not as legal advice. Laws in areas in which we practice change continually and also vary from jurisdiction to jurisdiction. Therefore no visitor to our site should rely on any of the articles provided for legal advice, but should always consult their own attorney regarding legal matters.

© 1998, Rob Hassett, Atlanta, Georgia. All Right Reserved.

 

Why Having a Corporate Name is Not Enough

 

By:   Rob Hassett

Casey Gilson P.C.

Six Concourse Parkway, Suite 2200

Atlanta, Georgia 30328

770-512-0300

Email:  rob@internetlegal.com

 

Background and Summary

This article first appeared on the Netcelerate Home Page sponsored by the Advanced Technology Development Center at Georgia Tech. This article will assist entrepreneurs in choosing a business or company name. They will learn the difference between corporate and company names versus service marks and trade names and why it may be possible to obtain a corporate name that cannot be used as the name of the business owned by the corporation. (3 Pages)

Most business people make the error of assuming that if they are able to reserve a corporate name with the Secretary of State’s office of their State of incorporation that they may safely use that name in the operation of their business. That is not true.

Two different areas of law apply to this situation — the law relating to incorporations and the law relating to service marks.

Corporations are legal entities. Service marks are marks, such as logos, that are associated with a service. Frequently, the corporate name for a company is also used as a service mark. An example of this dual use is “Ford Motor Company.” Conversely, a corporation’s name may differ from its service marks. For example, Atlantic & Pacific Tea Company is a corporation that operates its business under the service mark “A&P.”

Rights in a service mark are obtained by using the mark in conformity with applicable law in connection with the operation of a business or by filing an “intent to use” registration in the U.S. Patent & Trademark Office in Washington (subject, of course, to no one else having prior rights in the mark and all other criteria being met). Those rights can be strengthened by registration in trademark offices of Georgia and other states and by registration in the U.S. Patent & Trademark Office. The purpose of laws relating to service marks is to protect customers from being confused concerning the sources of goods being purchased or services being provided and, in some circumstances, to protect the owner of a service mark from certain activities by others which would likely diminish the value of the mark or the reputation of the company.

Because service marks and corporate names serve different purposes in the eyes of the law and are regulated by two (2) different mechanisms, the name game can easily lead to headaches for the business person.

In making the determination of whether or not to permit incorporation under a particular name, the staff workers at the offices of the Secretaries of State of the various states are required to assure that the name requested is not reserved for and has not been issued to any other company for use as a corporate name in that state. The staff members of a Secretary of State’s office are not responsible for determining whether or not the corporate name requested is being used as a service mark by a different company, is registered in the trademark and service mark division of the same Secretary of State’s offices, is registered in the U.S. Patent & Trademark Office, is incorporated in another state, or is even in the telephone book in the same city. Although a request for incorporation of a famous mark might be denied because the staffer recognizes the names, quite frequently a person can properly and legally incorporate a business under a particular name, but not be able to use their corporate name in the operation of their business because it is another’s service mark.

The consequences to a second user of a previously established service mark would typically be the receipt of a “cease and desist letter” and a demand to change its business name. Under these circumstances, it would ordinarily be necessary for the recipient of the letter to change its business name to avoid a law suit. Such changes can cause substantial losses resulting from lost marketing momentum. Additionally, the second user may also be liable for substantial damages.

Unfortunately, there is no foolproof method for assuring that a name may be used. However, there are on-line computer data base services available for determining whether or not a service mark has been registered with the U.S. Patent & Trademark Office (e.g. www.micropat.com). Service marks registered with the U.S. Patent & Trademark Office are also available on CD ROM on the second floor of the Georgia Tech Library (Georgia Tech is a regional depository for the U.S. Patent & Trademark Office). Additionally, there are computer data base services available for determining not only whether or not a service mark is registered in the U.S. Patent & Trademark Office, but also whether the mark is registered in any state of the United States or has been referred to in numerous publications, including trade publications or other sources. Such an extensive search can be provided by companies such as Thompson & Thompson (800) 692-8833 and Government Liaison Services (800) 642-6564.

In this uncertain area of business planning, it is best to order a comprehensive name and service mark search as discussed above, and have it reviewed by an attorney to avoid misinterpretation.

The information above is provided for general educational purposes and not as legal advice. Laws in areas in which we practice change continually and also vary from jurisdiction to jurisdiction. Therefore no visitor to our site should rely on any of the articles provided for legal advice, but should always consult their own attorney regarding legal matters.

© 1997 Rob Hassett, Atlanta, Georgia. All Rights Reserved.

Five Most Common Legal Mistakes Involving Commercial Websites

July 2008 Article for Business to Business Magazine

by Rob Hassett

Do you have a privacy policy posted on your business website?  If so, did you have an attorney review it?  If the answer to this question is “no,” there is a good chance that there is a difference between what you state in your privacy policy and what your actual practices are.  If there is, you could be subject to actions by the Federal Trade Commission and by private companies and individuals for fraud.  In a recent case, a jury awarded $4.5M in damages against a company that helped students apply to colleges online, because the policy stated that personal information was not being shared, but it was.  This is an example of the type of legal mistakes that are often made in connection with commercial websites.

 The five most common legal mistakes involving commercial websites are:

             1.         The company’s privacy policy does not accurately state what the true privacy policy of the company is.  If nothing else, you should make sure that your privacy policy says that in the event of the sale of your business, you reserve the right to transfer the data you have collected from customers to the purchasers of the business, while making it clear that the new owners will continue to be subject to the commitments that you make regarding privacy.

             2.         The business is required to have a privacy policy but does not.  There are a number of laws that  require the posting of a privacy policy under certain circumstances including the Graham Leach Bliley Act (GLB), which applies only to “financial institutions,” but which defines the term “financial institutions” very broadly; the Health Insurance Portability and Accountability Act (HIPAA), which applies to health care providers, health care plans and “health care clearing houses” (i.e. companies that collect and sort health related billing data); the Children’s Online Privacy Protection Act (COPPA), which applies to websites that are directed to children under 13 or knowingly obtain data from children under 13; and the California Online Privacy Protection Act , which requires that any commercial website that collects data from individuals residing in California post their privacy policies.  The consequences of not complying with privacy laws can be very severe.  Violations of GLB can result in a bank’s loss of FDIC insurance – which would likely put the bank out of business.  Violations of HIPAA can result in criminal penalties of up to 10 years in prison and a $250,000 fine.  For violations of COPPA, Mrs. Fields Cookies paid a civil penalty of $100,000 and Hershey’s paid $85,000.  Violations of the California Online Privacy Protection Act can result in private lawsuits — possibly a business person’s worst nightmare.

             3.         Third parties are able to post materials on the website and the company fails to post a “Copyright Policy” and file a designation of a representative to receive any complaints regarding copyright infringement with the U.S. Copyright Office.  Properly posting such a policy helps to insulate the company from liability for the posting of infringing materials by third parties.

             4.         Failure to screen  all photos of individuals posted on the website.  Posting of a recognizable individual on a website without permission of that individual that is not posted for a newsworthy purpose, or other situation protected by the First Amendment freedom of speech clause, can result in liability.

             5.         Failure of the owner to register copyrights in the owner’s website.  If ownership of the copyrights in the website are owned by the owner of the website, but the owner of the website does not register the copyrights in the U.S. Copyright Office, the owner may still register the copyrights after an infringement and sue to stop such copying and collect damages provable (it is very difficult to prove any) but may not recover what are called statutory damages (much easier to prove) or attorney fees.

 CONCLUSION

Any business owner with a website should take steps to assure that the use of the website is not resulting in a violation of another person’s rights and is taking all steps to protect its own rights.

Rob Hassett is an attorney who practices in technology, entertainment and corporate law with Casey Gilson P.C. in Atlanta,Georgia.

This article provides general information only and does not constitute legal advice.  Any reader should consult with his or her own attorney before making any decisions regarding legal matters.

Will Internet Radio Stations That Stream Music Have to Shut Down?

First Published in the Atlanta Lawyer March 2009

by Rob Hassett

Introduction
Creative and adventurous entrepreneurs, who could never afford to buy a broadcast radio station, have set up many internet radio stations that stream music and offer features that could only be made available over the internet. www.live365.com allows you to find stations that play almost  any type of music imaginable. Yahoo’s Launchcast, (http://music.-yahoo.com/launchcast/), now  managed by CBS Radio, (http://yahoo.client.shareholder.com/) and Pandora, (http://www.pandora.com/) allow you to type in names of favorite artists or songs and will then play songs, based upon those choices. With Pandora you can set up as many “channels” as you want, with each based on a different artist or set of artists (i.e. with each song by the artist selected or an artist with a similar sound). Although Congress has passed laws to promote experimentation, growth and development on the internet by limiting liability exposure of the owners of commercial websites, Congress has also  passed laws that have put internet radio, and all that it offers, on the verge of extinction.

Background
In the United States, songwriters (and publishers for songwriters) have traditionally received “public performance” royalties when their songs were played on broadcast radio and in other public forums. Royalties for songs are collected by ASCAP, BMI and SESAC and, for internet radio, total royalties have been in the range of 3.5 – 5% of gross income derived from the broadcast of the music. Owners of the copyrights in sound recordings have traditionally received  no royalties for public performances in the United States. This continued to be the case until enactment of the Digital Performance Right in Sound Recordings Act of 1995. This Act provided that copyright owners of sound recordings would have a public performance right in  audio recordings that were transmitted by a station requiring a subscription, such as satellite radio, and in any digital transmission that was “interactive.”  In 1998, the Digital Millennium Copyright Act was enacted, which, among other things, included provisions, codified in 17 USC § 106(6) and §114, that expanded performing rights of  the owners of sound recordings to include sound recordings transmitted digitally over the internet (i.e. via internet radio). In connection with this right, Congress also provided for a set  (“statutory”) royalty rate to be established for non-interactive internet radio stations that met  certain other criteria. If not decided by negotiation among stakeholders, it provided that the royalty rate would be determined by an ad hoc Copyright Arbitration Royalty Panel.  The statutory rates would only apply if the webcast was not “interactive” and other criteria were met, such as, limiting notice of when songs would be played, to make it unlikely that webcast streaming would become a substitute for music downloads.

2 Problems
There were two problems with Congress’ approach. First, to benefit from a set royalty rate (which would be better for each station than having to negotiate separately with each record label), the station could not be “interactive.” Unfortunately, Congress defined “interactive” broadly and ambiguously so many stations do not know whether they are interactive or not.  Second, Congress’ wording of the standard the arbitrators were to use for determining the statutory rates encouraged the arbitrators to impose unreasonably high royalties.

Determining Whether a Station Is Interactive
The definition of “interactive” set forth in the Digital Millennium Copyright Act reads, in pertinent part, as follows:

An “interactive service” is one that enables a member of the public to receive a transmission of a program specially created for the recipient, or on request, a transmission of a particular sound recording, whether or not as part of a program, which is selected by or on behalf of the recipient.  17 USC § 114(j)(7).

The phrase “a program specially created for the recipient” is ambiguous. As referred to in the above Introduction, using advanced techniques, some of the most popular internet radio stations utilize input from the listener to create a “personalized station.” So does that result in programs that are “specially created for the listener”?

In 2001, Sony BMG, and other record labels, filed a lawsuit against Launchcast internet radio for copyright infringement, claiming Launchcast was an “interactive” radio station and had no right to stream music under the statutory license granted to non-interactive radio stations. On November 3, 2005, the United States District Court for the Southern District of New York held that whether or not Launchcast was “interactive” was a jury question. Arista Records, Inc. v.  Launch Media, Inc., 2005 WL 2898735 (S.D.N.Y.), and on April 27, 2007, a jury found that Launchcast was not interactive. Sony BMG said it would appeal. As of this writing, the author has not seen any order relating to the appeal of that decision.

Statutory (Set) Rates
For reasons that are likely related to which groups had the more effective lobbyists, the standard for determining statutory rates as provided for in the acts referred to above, was made much more favorable to existing satellite radio, than to webcasters. The Digital Performance Right in Sound Recordings Act of 1995, in a provision codified at 17 USC § 801(b), directed ad hoc Copyright Arbitration Panels to set royalty rates for pre-existing satellite radio that are reasonable and are calculated to maximize the availability of creative works to the public, to afford the copyright owner a fair return on his or her investment and the copyright user a fair income, to consider the contributions and risks taken by each party and to minimize any disruptive impact on the industries involved. The Digital Millennium Copyright Act, in a provision codified at 17 USC §§ 114(f) (2) (A), directed the Copyright Arbitration Royalty Panels to set royalty rates for webcasters (as well as others including new, i.e. not  preexisting, satellite radio stations) “that would have been negotiated between a willing buyer and a willing seller.” No language indicated that the Panels should be concerned about maximizing the availability of creative works or the disruptive impact on internet radio.  As a result, in 2002, royalties for internet radio were set at an amount that would put many internet radio stations, already earning little if any money, out of business. Webcasters appealed the decision to the D.C. Circuit Court of Appeals. The D.C. Circuit Court of Appeals affirmed the decision. See, Beethoven.com LLC v. Library of Congress, 394 F.3d 939 (D.C. Cir. 2005); and See generally, Melville B. Nimmer and David Nimmer, Nimmer on Copyright 8-352.  (Rel.61-8/2003).  In 2002, partly because of concerns over the adverse effects of the high rates, Congress passed  the Small Webcaster Settlement Act of 2002. The new Act led to an agreement among the participating stake holders of an alternative rate equal to 5% of expenses or 8% of gross revenues, depending on which is greater, through 2002 for “small webcasters,” with increases scheduled for 2003 and 2004. See, Nimmer on Copyright, 8-352.12 (Rel.61-8/2003).

Current Royalties for Webcasting
On March 7, 2007, the Copyright Royalty Judges, who had replaced the ad hoc Copyright  Arbitration Panels and are sometimes referred to as the Copyright Royalty Board, set the rates for webcasting beginning at .08 cents per performance for 2006 with yearly increases reaching  .19 cents per performance for 2010, with a minimum fee of $500 per channel per year. The $500 per channel fee could be interpreted to require the payment of much more than the rates per song for stations like Pandora, that permit each user to set up multiple “stations.” Daniel McSwain, Radio and Internet Newsletter, “CRB Coverage,” March 2, 2008.  http://textpattern.kurthanson.com/crb/58/webcast-royalty-rate-decision-announced; See also, “free103point9 Newsroom,” tp://blog.free103point-9.org/labels/internet%20radio.html. On  April 17, 2007, the Copyright Royalty Board rejected an appeal. David DeJean, Information Week, April 17, 2007. “Copyright Royalty Board Puts Internet Radio On Death Watch,”  http://www.informationweek.com/blog/main/archives/2007/04/copyright_royal.html; See also,  “free103point9 Newsroom”, http://blog.free103point9.org/labels/internet%20radio.html.

In contrast, based on the differences in the statutory formulas for setting royalties for webcasters versus pre-existing satellite radio, in 2006, the Copyright Royalty Judges set royalty rates for  pre-existing satellite radio that were much more favorable to the owners of the radio stations, resulting in fees of anywhere between 6.0% to 8.0% of gross income. Most internet radio stations would much prefer having their royalties based on their revenue rather than on the number of times songs are played.
An appeal from the order setting the rates for webcasters was filed in the US Court of Appeals for the District of Columbia. No court decision has been published to date. David Oxenford, Broadcast Law Blog, http://www.broadcastlaw-g.com/archives/internet-radio-nab-joins-thefray-on-internet-radio-appeals-and-a-request-for-stay-are-filed-and-a-settlement-offer-is-madeto-noncommercial-webcasters.html; See also, “free103point9 Newsroom”  http://blog.free103point9.org/labels/internet%20radio.html.

Finally, on October 1, 2008, Congress enacted the Webcaster Settlement Act that permits the 4 webcasters and SoundExchange (the collecting agency for the record labels and performers) to negotiate rates lower than the statutory rates, which helps only to the extent the record labels recognize that internet radio can promote the sale of records and be another source of revenue.

Conclusion
The law relating to internet radio is still evolving, but up to now fails to support internet radio as it has other web based businesses. The royalty payments required for internet radio have been set at levels so high that they could cause many popular webcasters to shut down. As Congress did with pre-existing satellite radio, to “unleash the power of the internet,” with respect to internet radio, Congress should set standards for maximum royalties that do not exceed 8% of a radio station’s gross income.

Rob Hassett is an attorney with Casey Gilson P.C. in Atlanta and focuses on technology, entertainment and corporate law.

Recent Developments in Internet Law

Rob Hassett and Suellen W. Bergman

Hassett Cohen Goldstein & Port, LLP

990 Hammond Drive, Suite 990 Atlanta, GA 30328

(770) 393-0990

http://www.internetlegal.com

 

ACKNOWLEDGEMENTS

The writers wish to thank Robert Port, a partner in the above law firm, and Lori Brill, an associate in the above law firm, for their help in preparing these materials.

I.       Introduction

Over the past year, courts, Congress, and state legislatures have dealt with a number of different issues concerning the Internet, including:

1.         The enforceability of agreements entered into over the Internet;

2.         Spam;

3.         Under what circumstances is there liability for copying?

4.         How far will the courts go to restrict the use of marks as domain names, metatags and other uses on the Internet?

5.         What privacy rules apply?

6.         What is a Web site operator’s liability for a Web site which involves activity that is legitimate in some jurisdictions, but illegal in others?

These and other recent developments are discussed in this paper.

II.      What constitutes an enforceable agreement entered into over the Internet?

Agreements entered into over the Internet generally take one of two forms, either an exchange of  e-mail or clickwrap. Clickwrap agreements are agreements formed by a purchaser manifesting assent to the terms of an agreement online by pointing and clicking a mouse. An agreement based on an exchange of e-mails relating to subject matter which does not require a signed writing to be enforceable has been held to be effective. See, e.g., CompuServe, Inc. v. Richard S. Patterson, 89 F.3d 1257 (6th Cir. 1996). The controversies regarding the enforceability of agreements entered into over the Internet involve the enforceability of clickwrap agreements and whether agreements entered into over the Internet constitute signed writings.

A.        Clickwrap Agreements

The authors are not aware of any cases to date that directly address the issue of whether clickwrap agreements are enforceable. There is one case that implicitly holds that they are enforceable. A number of cases deal with whether shrinkwrap agreements (which we believe provide a useful legal analogy) are enforceable. The most important issue addressed by courts today regarding the enforceability of shrinkwrap agreements is whether or not shrinkwrap agreements are pre-empted by copyright law.

1.         The case that implicitly held that clickwrap licenses are enforceable is Hotmail Corp. v. Van Money Pie, Inc., (N.D. Cal. 1998) 47 U.S.P.Q. 2d (BNA) 1020 (1998); 1998 U.S. Dist. Lexis 10729 (April 16, 1998). In that case, the United States District Court for the Northern District of California granted the plaintiff a preliminary injunction in a case alleging that the defendants breached the terms of a service contract for using the plaintiff’s e-mail service. Without discussing the issue, the Court in that case implicitly held that the defendants were obligated to the terms of service on the Hotmail Web site. Users of that service agreed to those terms by clicking the “I agree” button.

2.         In ProCD, Inc., v. Zeidenberg, 86 F.3rd 1447 (7th Cir. 1996), ProCD developed and sold copies of a CD ROM containing a database of telephone numbers. The CD ROM box informed the consumers there was a shrinkwrap license inside the box. The shrinkwrap license provided that the purchaser was only receiving a license and the purchaser could not make copies of the product. Zeidenberg copied the database onto his own Web site and then provided access to the database via his Web site to customers for a fee. The Court rejected the holding of Vault Corp. v. Quaid Software Ltd., 847 F.2d 255 (5th Cir. 1988), that shrinkwrap licenses are pre-empted by copyright law, and held that the ProCD shrinkwrap license was enforceable.(1) The Court thus provided a way for database developers to protect their databases (by contract) even though copyright law would probably not protect the database here. (2)

a.         Several courts have followed the ProCD decision: Microstar v. Formgen, Inc., 942 F. Supp. 1312 (S.D. Cal. 1996) (copying from a computer game); Hill v. Gateway 2000, Inc., 105 F.3rd 1147 (7th Cir.), cert. denied, 522 U.S. 808, 118 S.Ct. 47, 139 L.Ed.2d 13 (1997) (shrinkwrap license sent with a Gateway computer); Brower v. Gateway 2000, Inc., 246 A.D.2d 246, 676 N.Y.S.2d 569, 37 U.C.C. Rep. Serv. 2d (CBC) 54 (N.Y. App. Div. 1st Dep’t 1998) (allowed Gateway 2000 to require that any disputes be resolved by arbitration in Chicago, Illinois); and Mortenson Co., Inc. v. Timberline Software Corp., 93 Wash. App. 819, 831, 970 P.2d 803, 809 (1999) (upheld a shrinkwrap license agreement, included in the software, which was fairly standard and contained an “accept-or-return” provision).(3)

b.         Note that Section 112 of the Uniform Computer Information Transactions Act (UCITA), discussed infra, would modify ProCD somewhat because UCITA provides that where a mass-market purchaser licensee does not have an opportunity to review a mass-market license or a copy of it before becoming obligated to pay and does not agree, to the license after having the opportunity to review it, the licensee is entitled to return the product and (1) is entitled to reimbursement of any reasonable expenses incurred in complying with the licensor’s instructions for return or destruction of the computer information or, in the absence of instructions, incurred for return postage or similar reasonable expense in returning it; and, in some circumstances, (2) is entitled to compensation for any reasonable and foreseeable costs of restoring the licensee’s system. See UCITA Section 112.

A case which tangentially addressed the shrinkwrap issue is Step-Saver Sys. v. Wyse Tech. and The Software Link, 939 F.2d 91 (3rd Cir. 1991), where the Court applied the “battle of the forms” rules and determined that the parties’ agreement was complete when the goods were ordered via telephone coupled with the purchase order. The Court held that the shrinkwrap license was sent after the fact and thus had no effect. The Software Link’s shrinkwrap license was also held unenforceable for the same reason in Arizona Retail Sys., Inc. v. The Software Link, 831 F. Supp. 759 (D. Ariz. 1993).

3.       Generally, it appeared that the copyright pre-emption barrier raised in Vault Corp., supra, had been buried by ProCD and its progeny. However, in a case involving claims relating to the pitching of a marketing concept (which did not involve any kind of online agreement but could have repercussions in the online context), the United States District Court for the Western District of Michigan held that the claim was pre-empted by copyright law. See Wrench, LLC v. Taco Bell Corp., 51 F. Supp. 2d 840 (W.D. Mich. 1999), 51 U.S.P.Q.2d (BNA) 1238. The Court denied the claim of a company that had pitched the Chihuahua concept to Taco Bell and claimed Taco Bell used the concept without paying for it. The Court held that any implied contract was pre-empted by copyright law. The Court distinguished ProCD on the somewhat nebulous grounds that the ProCD agreement was in effect at the time of purchase (i.e. before use of the product) whereas the Taco Bell agreement was not supposed to take effect unless Taco Bell started using the Chihuahua concept (i.e. after use of the concept). Note that use or copying of a product (i.e. a copyrighted item) is the same action which triggers liability under copyright law. This case is in line with an earlier Louisiana case regarding shrinkwrap licenses: Vault Corp., supra.

B.      Signed Writings

Both clickwrap agreements and e-mail exchanges may cover transactions where signed writings are required under the applicable statute of frauds. A number of states now have some kind of a digital signature act. Most of these acts require that, to satisfy any statute of frauds, the electronic signature must be:

1.       Unique to the person using it,

2.       Capable of verification, and

3.       Under the sole control of the person using it.

See, e.g., Georgia Electronic and Signatures Act at O.C.G.A. §10-12-3 et seq. as originally enacted; the Utah Digital Signatures Act, Utah Code Ann. §46-3-101, et seq. (Supp. 1996). Before the enactment of O.C.G.A. §10-12-3 et seq., an argument could be made in Georgia that anything intended to be a signature would constitute a signature. See, e.g., Troutt v. Nash AMC-Jeep, Inc., 157 Ga. App. 399, 278 S.E.2d 54 (1981), which held that the printing of a company name at the bottom of a form constituted a signature, permitting a car dealer to meet certain state law requirements of providing a signed form. The latest developments in this area are discussed below.

1.       The newest version of Georgia’s statute, (4) Electronic Records and Signatures, which provides for broad acceptance of electronic signatures, reads, in pertinent part, as follows:

(a)        Records and signatures shall not be denied legal effect or validity solely on the grounds that they are electronic.

(b)        In any legal proceeding, an electronic record or electronic signature shall not be inadmissible as evidence solely on the basis that it is electronic.

(c)        When a rule of law requires a writing, an electronic record satisfies that rule of law.

(d)       When a rule of law requires a signature, an electronic signature satisfies that rule of law.

(e)        When a rule of law requires an original record or signature, an electronic record or electronic signature shall satisfy such rule of law.

(f)        Nothing in this Code section shall prevent a party from contesting an electronic record or signature on the basis of fraud.

O.C.G.A. §10-12-4 provides further as follows:

The term “electronic signature” is defined as “a signature created, transmitted, received, or stored by electronic means and includes but is not limited to a secure electronic signature.”(5) O.C.G.A. §10-12-3. The term “record” is defined as “information created, transmitted, received, or stored either in human perceivable form or in a form that is retrievable in human perceivable form.” O.C.G.A. §10-12-3.

2.       The proposed Uniform Electronic Transactions Act (UETA), which provides that “an electronic record or signature may not be denied legal effect or enforceability solely because it is in electronic form” and that “if a law requires a record to be in writing, an electronic record satisfies the law”(6) has been approved by the National Conference of Commissioners on Uniform State Laws, and the Conference has voted to present the Act to states for adoption. (7)

The Electronic Transactions Act has been passed in California. California’s Governor signed the Uniform Electronic Transactions Act on September 16, 1999, and it was chaptered (Chapter No. 428) by the Secretary of State on the same date. See CA S.B. 820.

3.       The Uniform Computer Information Transactions Act (former proposed UCC Article 2B). The legal rules for computer information transactions which was to be promulgated by the National Conference of Commissioners on Uniform State Laws (8) as Article 2B of the Uniform Commercial Code, instead is being proposed as the Uniform Computer Information Transactions Act (UCITA).(9) The Act is the first general commercial statute to provide comprehensive procedures and rules for computer software licensing. Most of those rules would also be appropriate for a broad range of transactions outside UCITA’s scope, and it is expected that they will form the model for several future articles of the UCC as they did for the Uniform Electronic Transactions Act (UETA), which was approved at the same time.(10) The provisions include:

an express recognition of electronic records as the equivalent of writings, rules for attribution of electronically generated messages, methods for establishing authentication, rules for allocating losses caused by electronic errors, and rules for determining when electronic messages are deemed to be effective. A particularly noteworthy provision recognizes the enforceability of agreements made by the interaction of “electronic agents,” even if no human was directly involved in either or both sides of the “negotiation.” (11)

Software publishers and computer manufacturers strongly support UCITA, but it is as strongly opposed by a wide range of groups. UCITA is controversial because:

UCITA represents a movement toward licensing of information in its many forms and away from the sale of copies as traditionally understood under copyright law. UCITA would enforce the broad [consumer] use of “shrink-wrap” and computer “click-on” licenses (called “mass-market licenses” in UCITA). By licensing rather than selling something, a vendor can wield more control of the downstream use of the product. Placing new constraints on the use of information in mass-market transactions can, in turn, constrain the use of information for important public purposes such as democratic speech, education, scientific research, and cultural exchange. Many believe that UCITA fails to appreciate the strong public interest in prohibiting new restrictions on information exchange.

The scope of UCITA is extremely broad. “Computer information,” under UCITA, includes everything from copyrighted expression, such as stories, computer programs, images, music and Web pages; to other traditional forms of intellectual property such as patents, trade secrets, and trademarks; to newer digital creations such as online databases and interactive games. Although the statute claims to be limited to information in electronic form, it allows other transactions to “opt-in” to being governed by UCITA.

Many legal community commentators are of the opinion that UCITA (or something like it) is not necessary or, at least, it is premature. This view is based on the opinion that existing common law and copyright law are developing appropriately to handle the new types of information-based transactions emerging in the information economy.

The American Law Institute (ALI), consumer advocacy groups, libraries, and the Federal Trade Commission have continued to criticize and/or oppose the UCITA proposal and prior UCC 2B drafts, yet their concerns have not been addressed. Instead, NCCUSL intends to push the UCITA proposal as quickly as possible to state legislatures.

A Quick Look at the Uniform Computer Information Transactions Act (UCITA), American Association of Law Libraries: Washington Affairs, July 15, 1999.(12)

4.         Ballas v. Tedesco, 41 F.Supp. 2d 531 (D.N.J. 1999). This case addresses the issue of whether an exchange of e-mails can satisfy the requirement that assignments of copyrights are not effective unless they are in writing and signed by the transferor. See, Copyright Act §201(d). In this case, Tedesco wanted to produce a CD of dance music for Ballas. Ballas would pay Tedesco a fee for the musical arrangements and production of the CD, and Ballas would have the exclusive right to manufacture copies of the CD for sale. Negotiations, via e-mail, were unsuccessful, and the parties did not agree on terms of the arrangement. The parties agreed that the music content copyright belonged to the Defendant. The Court enjoined the Plaintiff from making or selling the music on the CD because the Court found that there was no valid assignment of the copyright since there was no written assignment.

III.    Spam (13)

A.        Spam cases

1.         Hartford House, Ltd. d/b/a/ Blue Mountain Arts v. Microsoft Corp., CV 778550, Sup. Ct. Cal. Santa Clara County, 1998. Blue Mountain creates and sends electronic greeting cards. In this lawsuit, Blue Mountain charged that (1) Microsoft has a competing electronic greeting card Internet site and (2) Microsoft distributed a trial version of Internet Explorer which includes an e-mail filter that identifies Blue Mountain’s cards as spam and sends them into a junk mail folder instead of sending them to the intended recipient. On December 17, 1998, Judge Robert Baines ordered Microsoft to provide Blue Mountain with the necessary information to enable Blue Mountain to alter its e-mail notification messages and greeting cards to ensure that they pass through Microsoft’s anti-spam filtering tool in the beta version of Internet Explorer 5.0. (14)

2.         Intel v. Hamidi, Superior Court of California, County of Sacramento, Judge John R. Lewis, April, 1999. Ken Hamidi was dismissed from Intel in 1995. On six occasions between 1996 and 1998, he sent e-mail messages to over 30,000 Intel employees, which detailed his opinion of the company’s abusive and discriminatory employment practices. In April, 1999, Judge Lewis granted summary judgment to Intel, finding that Hamidi’s messages trespassed on Intel’s proprietary computer system and caused harm. This decision has been criticized (15) because (1) although there was arguably no state action,(16) Judge Lewis did not engage in any First Amendment analysis and (2) given the serious purpose of Hamidi’s messages and the minimal harm they caused to Intel’s computers, Hamidi’s free speech rights should prevail over Intel’s property rights in a fair balancing test.

3.         The Tenth Circuit, in U.S. West v. FCC, 182 F.3d 1224 (10th Cir. 1999), held that U.S. West could not be blocked by an FCC rule from using information obtained from customers regarding who the customers called, and other similar data, for marketing to those individuals because such prohibition was “a violation of the First Amendment.” The Court reasoned that such use constituted commercial speech, applied the First Amendment commercial speech analysis, and held that the proposed FCC rule was unconstitutional. The test (17) was as follows:

First, determine whether the commercial speech concerns lawful activity and is not misleading. If so, the speech can only be restricted if:

(1)        the government has a substantial state interest in regulating the speech;

(2)        the regulation directly and materially advances that interest; and

(3)        the regulation is no more extensive than necessary to serve the governmental interests.

Surprisingly, the Court found that the rule was not narrowly tailored because it did not do such things as allow phone customers to opt in or opt out (assuming that there is a serious desire by telephone company customers to have their personal calls tracked and used for marketing purposes). This indicates that some anti-spam statutes may violate free speech if they completely prohibit spam without considering other alternatives.

This case is troubling because:

(1)        it allows telephone companies that track customer calls to use that information to market to those customers, and

(2)        this analysis could support a First Amendment right to send spam.

As in other spam cases, U.S. West involves a “captive,” as opposed to a “voluntary,” audience. (18)

To date, the cases that have held spam to be illegal involved claims of Internet Service Providers and Intel,(19) that spam is a form of trespass. This analysis of spam as a trespass is not as vulnerable to a First Amendment attack as a state or federal statute prohibiting spam. See, e.g., CompuServe, Inc. v. Cyber Promotions, Inc., 962 F. Supp. 1015 (S.D. Ohio 1997) (holding that a private company’s motion seeking a court to enjoin “spam trespass” did not constitute state action subject to a First Amendment attack).(20)

B.        Federal Legislation

A proposed federal statute regarding unsolicited bulk e-mail was introduced in the House on May 5, 1999: Internet Freedom Act, 106 H.R. 1686. (21) This Act, in proposed Section 104, entitled “Protection from Fraudulent Unsolicited E-Mail,” would amend 18 U.S.C. § 1030 such that, inter alia, it would be a violation of the Act to “intentionally and without authorization initiate the transmission of a bulk unsolicited electronic mail message to a protected computer with knowledge that such message falsifies an Internet domain,(22) header information, date or time stamp, originating e-mail address or other identifier” or to sell or distribute a computer program which (a) “is designed or produced primarily for the purpose of concealing the source or routing information of bulk unsolicited electronic mail messages (23) in a manner prohibited by” the Act, (b) “has only limited commercially significant purpose or use other than to conceal such source or routing information,” or (c) “is marketed by the violator or another person acting in concert with the violator and with the violator’s knowledge for use in concealing the source or routing information of such messages.” The Act provides for the following potential damages for various offenses: injunctive relief and other equitable relief, actual monetary losses, statutory damages of $15,000 per violation or an amount of up to $10 per message per violation, whichever is greater; reasonable attorneys’ fees, and other litigation costs.

C.        State Legislation

Some states have passed laws regarding unsolicited e-mail.

1.         Washington State: Wash. Rev. Code § 19.190.020 (1999), entitled “Unsolicited or Misleading Electronic Mail — Prohibition,” provides as follows:

(1)        No person, corporation, partnership, or association may initiate the transmission of a commercial electronic mail message from a computer located in Washington or to an electronic mail address that the sender knows, or has reason to know, is held by a Washington resident that:

(a)        Uses a third party’s Internet domain name without permission of the third party, or otherwise misrepresents any information in identifying the point of origin or the transmission path of a commercial electronic mail message; or

(b)        Contains false or misleading information in the subject line.

(2)        For purposes of this section, a person, corporation, partnership, or association knows that the intended recipient of a commercial electronic mail message is a Washington resident if that information is available, upon request, from the registrant of the Internet domain name contained in the recipient’s electronic mail address.

2.         Nevada’s statute focuses on spam which contains advertisements. Nev. Rev. Stat. 41.730, entitled “Liability of Persons Who Transmit Items of Electronic Mail That Include Advertisements,” provides:

1.         Except as otherwise provided in Nev. Rev. Stat. 41.735, (24) if a person transmits or causes to be transmitted to a recipient an item of electronic mail (25) that includes an advertisement, the person is liable to the recipient for civil damages unless:

(a)        The person has a preexisting business or personal relationship with the recipient;

(b)        The recipient has expressly consented to receive the item of electronic mail from the person; or

(c)        The advertisement is readily identifiable as promotional, or contains a statement providing that it is an advertisement, and clearly and conspicuously provides:

(1)        The legal name, complete street address and electronic mail address of the person transmitting the electronic mail; and

(2)        A notice that the recipient may decline to receive additional electronic mail that includes an advertisement from the person transmitting the electronic mail and the procedures for declining such electronic mail.

2.         If a person is liable to a recipient pursuant to subsection 1, the recipient may recover from the person:

(a)        Actual damages or damages of $10 per item of electronic mail received, whichever is greater; and

(b)        Attorney’s fees and costs.

3.         In addition to any other recovery that is allowed pursuant to subsection 2, the recipient may apply to the district court of the county in which the recipient resides for an order enjoining the person from transmitting to the recipient any other item of electronic mail that includes an advertisement.

3.         California has also passed a law dealing with unsolicited bulk e-mail (which also applies to unsolicited faxes). This California Statute requires that the sender of unsolicited advertisements advise the e-mail recipient that the e-mail is an advertisement by placing the characters “ADV:” first in the subject line and also requires that the sender provide the recipient a return address or a toll-free number where the recipient can request that the sender refrain from sending additional unsolicited e-mail. See Cal. Business & Professions Code §17538.4. (Division 7, Part 3, Chapter 1) (Deering 1999), entitled “Unsolicited fax or e-mail.”(26)

IV.     Copyright

Several recent Internet related cases and statutes involve copyright issues, including the rights to sound recordings, distribution and derivative rights, and copyright term.

A.        Legislation

The Digital Millennium Copyright Act of 1998 (105 P.L. 304; 112 Stat. 2860)

1.         Exempts Internet service providers from liability for copyright infringement under certain circumstances;

2.         Makes it illegal to circumvent technology used to prevent copyright infringement(27) and, inter alia (this provision is to take effect two (2) years from October 28, 1998);

3.         Expands the rights of owners of sound recordings to restrict performance (or in some cases receive set royalties for) of their sound recordings from what was covered by the Digital Sound Recording Act of 1995 (28) to any sound recordings provided over the Internet whether or not it is via subscription or interactive (this provision is effective as of the date of enactment).

B.        RIAA v. Diamond Multimedia Sys., Inc., 29 F. Supp. 2d 624 (C.D. Cal. 1998) aff’d, 180 F.3d 1072 (9th Cir. 1999), 51 U.S.P.Q.2d (BNA) 1115.

The Court of Appeals for the Ninth Circuit affirmed the denial of a preliminary injunction finding that Diamond Multimedia, the maker of Rio,(29) had not violated the Audio Home Recording Act of 1992 (30) with the Rio because the Rio could not make copies except from a hard drive. The Court found that such copying was not covered by the Act. However, on August 4, 1999, Diamond Multimedia and the RIAA announced that they entered into a settlement agreement. RIAA’s general counsel and senior executive vice president, Cary Sherman, stated that this “announcement makes clear that the future of the digital music marketplace will be created in the marketplace itself, enabled by initiatives like SDMI [Secure Digital Music Initiative].”(31) While the authors have not been able to obtain details of the settlement reached between RIAA and Diamond Multimedia, one can infer from what has been published that the terms probably include a requirement that Diamond incorporate technology which prevents serial copying.

C. Tasini v. New York Times Co., 1999 U.S. App. LEXIS 23360 (2d Cir. 1999).

A federal district court in New York held that making publication information accessible on Lexis-Nexis and other similar data bases “constitutes reproduction and distribution of freelance contributions as part of that particular collective work.” Tasini v. The New York Times Co., 972 F.Supp. 804 (S.D.N.Y. 1997), 43 U.S.P.Q.2D (BNA) 1801. The District Court held that the publishers were protected by a privilege afforded to publishers of “collective works” under Section 201(c) of the Copyright Act, but the Second Circuit reversed this decision in Tasini v. New York Times Co., 1999 U.S. App. LEXIS 23360 (2d Cir. 1999). The Second Circuit concluded that “the Publishers’ licensing of Authors’ works to UMI for inclusion in these databases is not within the Section 201(c) revision privilege.” Id. at *22. The Court continued:

The relevant inquiry under Section 201(c), is . . . whether the republication or redistribution of the copyrighted piece is as part of a collective work that constitutes a “revision” of the previous collective work, or even a “later collective work in the same series.” If the republication is a “new anthology” or a different collective work, it is not within the privilege. H.R. Rep. No. 94-1476, at 122-23 (1976), reprinted in 1976 U.S.C.A.A.N. 5659, 5738. Because NYTO is for present purposes at best a new anthology of innumerable editions of the Times, and at worst a new anthology of innumerable articles from these editions, it cannot be said to be a “revision” of any (or all) particular editions or to be a “later collective work in the same series.”

Id. at *22-23. Accord Ryan v. Carl Corp., 23 F. Supp. 2d 1146, 1150 (N.D. Cal. 1998), 48 U.S.P.Q.2D (BNA) 1626 (commenting that “calling the reproduction of a single article a “revision” of a collected work, however, is more strained than even a flexible interpretation can withstand” and construing Section 201(c) of the Copyright Act in the authors’ favor).

D.        Challenging the constitutionality of Sonny Bono Copyright Term Extension Act of 1998 (CTEA).(32)

The Sonny Bono Copyright Term Extension Act of 1998 has been criticized as copyright overprotection, rather than copyright extension. This Act is important to the Internet because it reduces the benefits of those Internet sites that provide digital copies of public domain works.

Some have criticized the CTEA because it offers an extension of the term of copyrights for an author or creator without any reciprocal requirement of the author or creator. Also, the CTEA delays works from entering the public domain, without any corresponding benefit to society. One such critic of the CTEA, Lawrence Lessig, the Berkman Professor of Law at Harvard Law School, has filed a lawsuit on behalf of Eldritch Press,(33) a non-profit organization that posts literary works on the Internet when they have entered the public domain.(34)

Article I, Section 8 of the United States Constitution states that Congress may “promote the Progress of Science and useful arts, by securing for limited times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries” (emphasis added). In 1790, this limited time period of copyright was twenty-eight years. Subsequently, Congress enacted a series of extensions, which provide for copyright terms of up to seventy-five years. These extensions retroactively extended the copyright for works which were written many years ago that would otherwise soon enter the public domain.(35) The Sonny Bono Copyright Term Extension Act of 1998 has again retroactively extended the copyright terms; this extension is challenged in the Eldritch lawsuit. The plaintiffs argue that (1) the retroactive extension in the Sonny Bono Copyright Extension Act violates the constitutional “limited times” requirement for constitutional exclusive rights to “writings and discoveries” and (2) the retroactive and prospective extensions violate the First Amendment because they suppress speech without promoting any respective governmental interests. The Sonny Bono Copyright Extension Act has also been criticized by some as merely a vehicle which Disney (which lobbied for the Act) will benefit from, because Mickey Mouse would have entered the public domain in 2004. Under the Sonny Bono Act, however, Mickey will remain Disney’s copyright until 2023.(36)

V.      Domain Names and Marks

Domain names give an entity an Internet identity and enable the public to locate an entity on the Internet.

A.        Case law Registration of a competitor’s mark as a domain name (hijacking) was held to be legal in Juno Online Servs., L.P. v. Juno Lighting, Inc., 979 F.Supp. 684 (N.D. Ill. 1997), 44 U.S.P.Q.2D (BNA) 1913.

B.        Playboy Enters., Inc. v. Welles, 7 F.Supp.2d 1098 (S.D. Ca. 1998), 47 U.S.P.Q.2D (BNA) 1186, aff’d, 1998 U.S. App. LEXIS 27739 (9th Cir. 1998). A former playmate was permitted to state her association with Playboy (PEI)(37) on her own Web site. The heading of the defendant’s Web site is “Terri Welles–Playmate of the Year 1981,” and title of the link page is “Terri Welles–Playboy Playmate of the Year 1981.” Each of the pages uses “PMOY ’81” as a repeating watermark in the background. According to defendant, eleven of the fifteen free Web pages include a disclaimer at the bottom of the pages which indicates that the Web site is not endorsed by Playboy. Id. at 1100. Playboy moved for a preliminary injunction which would enjoin defendant from (1) using the trademarked term “Playmate of the Year” in the title of the home page and the link page; (2) from using the watermark “PMOY ’81” in the background; and (3) from using the trademarked terms “Playboy’ and ‘Playmate” in the meta-tagging of defendant’s site. The Court denied a preliminary injunction because the trademarks that defendant uses, and the manner in which she uses them, describe her and identify her. Therefore the Court held that the defendant has made a “fair use” of these marks(38) and her site was not confusingly similar to Playboy’s site.

C.        Playboy Enters., Inc. v. Netscape Communications Corp., 55 F. Supp. 2d 1070 (C.D. Ca. 1999). This case involves the sale of online banner ads keyed to specific search terms: “playboy” and “playmate.” The Court ruled that the terms “playboy” and “playmate” are generic and that Playboy has no monopoly on those words in all forms. Consequently, the Court denied Playboy’s request for a preliminary injunction against Excite, Inc. and Netscape Communications Corporation finding that the sale of those search keywords to third-party advertisers which operate adult entertainment sites does not constitute trademark infringement or dilution.

D. Avery Dennison Corp. v. Sumpton, 1999
U.S. App. LEXIS 19954 (9th Cir. 1999) 51 U.S.P.Q.2D (BNA) 1801. This was an appeal of a case in which an entity which maintained domain registrations for individual names that included among other surnames, “Avery.net” and “Dennison.net” was held not to have diluted the “Avery Dennison” mark. The Ninth Circuit reversed the District Court’s holding that there was dilution. The Ninth Circuit held that:

1.         The Avery Dennison mark was not famous because it was not “truly prominent and renowned” so that even marks “with such powerful consumer associations and even non-competing users can impinge on their value.” Avery, 1999 U.S. App. LEXIS 19954, *13. The Court pointed out that there were many registrations of marks and uses of the marks “Avery” and “Dennison” by others, and this factor weighs against those being famous marks.

2.         The Court also said that although “an intent to arbitrage” constituted a commercial use, an intent to “capitalize on the surname status of ‘Avery’ and ‘Dennison’ did not constitute a commercial use of a mark.” Id. at *30.

E.        Anti-Cybersquatting Consumer Protection Act

The United States Senate has passed a proposed act, entitled the Anti-Cybersquatting Consumer Protection Act (S. 1255), which would:

1.         Allow the bringing of an in rem action(39) against the domain name that had been registered in violation of the Act; and

2.         Permit recovery for cybersquatting, i.e. allow trademark holders to obtain civil damages from those who register domain name identifiers which are identical or similar to their mark: the trademark holder can recover damages of at least $1,000.00, but not more than $100,000.000 per domain name identifier.

F.         Ringling Bros.-Barnum & Bailey Combined Shows v. Utah Div. of Travel Dev., 170 F.3d 449 (4th Cir. 1999), 50 U.S.P.Q.2d (BNA) 1065, held that Ringling Brothers could not prevent Utah from using “The Greatest Snow on Earth” as a slogan for Utah’s winter sports attractions because the Federal Anti-Dilution law was held to require a showing of “actual economic harm” to the famous marks’ economic value by lessening its former selling power as an advertising agent for its goods or services. Proof of this harm should be demonstrated by surveys and showing actual loss.

G.        The First Circuit, in I.P. Lund Trading A.P.S. v. Kohler Co., 163 F.3d 27, 49 U.S.P.Q.2d (BNA) 1225 (1st Cir. 1998), specifically rejected the “lessening of demand for the product” test that had been applied by the Fourth Circuit in the Ringling Brothers case.

H.        ICANN

ICANN is the new non-profit body responsible for domain name system management, IP address allocation, and related functions. ICANN was established last year to (a) phase out the government’s involvement in the domain name system and (b) to end the monopoly held by Network Solutions Inc. (Nasdaq: NSOL), by opening up the registration of such popular domains as “.com” and “.net” to additional companies. In the past year:

1.         An Internet tax ICANN sought to impose was rejected. ICANN had funding problems and sought to impose a charge on all new Internet domain names payable to ICANN. A Congressional committee started an investigation and ICANN backed down on this.

2.         Open meetings were initiated. ICANN was originally holding closed-door meetings. Criticisms erupted and ICANN appears to have changed its procedures and now holds open meetings.

3.         Criticism by Ralph Nadar’s organization:

Ralph Nader, a consumer rights advocate, challenges how ICANN’s power is controlled and proposes “that the group’s authority should be based on a multilateral government charter that clearly defines and limits the organization’s authority.” He has previously criticized the “beleaguered organization for catering to corporate interests and overextending its authority.”(40)

a.         Nader argues that the right to have an Internet domain name should be considered on par with the right to have a street address, a phone number, or a name.

b.         Nader wants ICANN’s internal documents and budget available to the public.

c.         Nader invites public comment to his thirteen point proposal(41) at mailto:ralph@essential.

4.         An additional controversy exists regarding the registration of domain names. A number of entrepreneurs have also tried to change the organization of the domain naming systems by allowing for the private ownership of new top level domain names. Their proposal is that private companies that create a top level domain name and are able to obtain market acceptance of it should own the rights to register and run the registry of those domain names. Although the White House at one time appeared to favor this approach, ICANN has, to date, rejected any such proposal.

5.         The U.S.P.T.O. weighs in. The “Green Paper” and the “White Paper” were drafted under Ira Magaziner’s direction when he was in the White House. Mr. Magaziner appeared to be somewhat sympathetic to the proposed market-oriented approach for adding top level domain names. Becky Burr,(42) at the Department of Commerce, now appears to be in charge of policies regarding these issues and seems opposed to the marketing approach of adding top level domain names.

The U.S.P.T.O., as of May 18, 1999, allows the registration of second level domain names stating on its Web site at http://www.uspto.gov/web/offices/tac/domain/tmdomain.htm:

An Internet domain name that is used to identify and distinguish the goods and/or services of one person, from the goods of and/or services of others, and to indicate the source of the goods and/or services may be registered as a trademark in the U.S.P.T.O.

On the other hand, the U.S.P.T.O. is hostile to the registration of top level domain names stating in its policy dated September 29, 1999 in Guide No. 2-99 available at http://www.uspto.gov/web/offices/tac/notices/guide299.htm:

If a mark is composed solely of a TLD for “domain name registry services” (e.g., the services currently provided by Network Solutions, Inc. of registering .com domain names), registration should be refused under Trademark Act §§1, 2, 3 and 45, 15 U.S.C. §§1051, 1052, 1053 and 1127, on the ground that it the TLD would not be perceived as a mark. The examining attorney should include evidence from the NEXIS® database, the Internet, or other sources to show that the proposed mark is currently used as a TLD or is under consideration as a new TLD.

If the TLD merely describes the subject or user of the domain space, registration should be refused under Trademark Act §2(e)(1), 15 U.S.C. §2(e)(1), on the ground that the TLD is merely descriptive of the registry services.

The U.S.P.T.O. has also rejected applications to register proposed top level domain names for services other than just “domain name registry services.” The writers are unaware of the U.S.P.T.O. granting any registrations of proposed top level domain names to date regardless of the services with which those proposed domain names are associated.

VI.     Privacy

The latest developments concerning privacy on the Internet relate to the passage of the Children’s Online Privacy Protection Act of 1998 and the effect of the European Privacy Directive.

A.        Legislation

The Children’s Online Privacy Protection Act of 1998 (COPPA), 64 Fed. Reg. 22750 (April 27, 1999), forbids the collection and distribution of minors’ personal information(43) without parental consent and restricts distribution and use of that information. This Act is intended to provide protection to the individually identifiable data of children as collected by Internet Service Providers or Web site operators. The Act is supposed to be implemented by FTC rules which should be in place between eighteen and thirty months from COPPA’s enactment. The FTC has not yet issued any final rules, but interim rules were proposed on April 20, 1999:

Of particular importance is the COPPA requirement that, with certain exceptions, Web sites obtain “verifiable parental consent” before collecting, using, or disclosing personal information from children. Section 312.5 of the proposed rule sets forth this requirement along with the following performance standard:

An operator must make reasonable efforts to obtain verifiable parental consent, taking into consideration available technology. Any method to obtain verifiable consent must be reasonably calculated, in light of available technology, to ensure that the person providing consent is the child’s parent. (64 Fed. Reg. 22756)

In its discussion of this section, the Commission identified a number of methods an operator might use to obtain verifiable parental consent, including a print-and-send form signed by the parent and mailed or faxed to the Web site; a credit-card transaction initiated by the parent; a call made by the parent to a toll-free number; or an e-mail accompanied by the parent’s valid digital signature. The Commission also solicited comment on whether there are other e-mail based mechanisms that could provide sufficient assurance that the person providing consent is the child’s parent. (64 Fed. Reg. 22756, 22762) (44)

B.        European Union Privacy Directive

The European Union (EU), in its European Union Privacy Directive,(45) has granted broad rights to individuals about whom personal information is collected and stored in databases. This EU position, based on the idea that privacy is a fundamental human right, is more rigorous than the United States’ position, which does not provide as extensive access to individuals to review this kind of information and has relatively few restrictions on the use of such personal information.(46) This conflict between the EU position and the US position has threatened international electronic commerce.(47) Therefore, the US Department of Commerce negotiated with EU representatives and proposed safe harbor principles for American companies to use in determining whether they comply with EU data protection laws.(48) The “safe harbor” arrangement is expected to be finalized in the fall of 1999. (49)

Major companies are now requiring sites in which they advertise to meet these standards and the proposed safe harbor provision. For example, IBM’s policy(50) on personal information states that it will inform the consumer how it will use the personal information collected:

At IBM, we intend to give you as much control as possible over your personal information. In general, you can visit IBM on the Web without telling us who you are or revealing any information about yourself. There are times, however, when we may need information from you, such as your name and address. It is our intent to let you know before we collect personal information from you on the Internet.

If you choose to give us personal information via the Internet that we or our business partners may need — to correspond with you, process an order or provide you with a subscription, for example – it is our intent to let you know how we will use such information. If you tell us that you do not wish to have this information used as a basis for further contact with you, we will respect your wishes. We do keep track of the domains from which people visit us. We analyze this data for trends and statistics, and then we discard it.

VII.        First Amendment: Child Online Protection Act

The Child Online Protection Act was held unconstitutional in ACLU v. Reno, 1998 U.S. District Lexis 18546 (E.D. Pa. 1998) and ACLU v. Reno, 31 F.Supp. 2d 473 (E.D. Pa. 1999), but there have not been any decisions from the appellate level yet.

VIII.      Jurisdictional Issues

A.        There have also been some interesting recent cases relating to jurisdiction. First, according to the Internet Newsletter, August 1999, a New York trial court has held that a gambling site in Antigua that would not allow gambling on the site if anyone gave an address in a state that prohibited gambling but did not take any other further steps to verify the address’ accuracy constituted a violation of New York State’s prohibitions on gambling and the Federal Wire Act, the Travel Act, and the Interstate Transportation of Wagering Paraphernalia Act. People v. World Interactive Gaming Corp., N.Y. Sup. Ct., N.Y. Co. (July 24, 1999).

B.        Coastal Video Communications Corp. v. Staywell Corp., 1999 U.S. Dist. LEXIS 11827 (E.D. Va. 1999). In a copyright case where one company alleged that its employee handbook had been infringed by another company, the District Court held that whether there was long-arm statute jurisdiction depended on whether the defendant had actually sold its publication, not just attempted to sell its publication, in Virginia. The Court also said that even if such copies were sold in Virginia, that would not be enough to grant specific jurisdiction in that case because the declaratory judgment action that had been filed does not “arise from the sale of the defendant’s publication” but rather from its very existence. Perhaps the lesson from this case, if you desire to get jurisdiction, is to file an infringement action in a copyright case instead of a declaratory judgment.

C.        Where a Virginia resident sued out of state defendants for posting allegedly defamatory material (one defendant posted the material on servers in Virginia via “AOL” and the other defendant posted the material on servers outside Virginia but was held by the Court to be doing business in Virginia from its Web site), a District Court for the Eastern District of Virginia held that there was a tort in the State of Virginia, and there were sufficient minimum contacts to allow for jurisdiction. Bochan v. LaFontaine, 1999 U.S. Dist. LEXIS 8253 (E.D. Va. 1999).

D.        In a similar case, Melvin v. Doe, Cir. Ct. of Loudoun County, Civil No. 21942 (June 24, 1999), a Virginia Court held that where both the plaintiff and the defendant were Pennsylvania residents, even though a tort may have occurred in Virginia by defamatory material being placed on the AOL server in Virginia, there were not sufficient minimum contacts to meet the jurisdiction requirements for personal jurisdiction.

E.         In Mink v. AAAA Dev., 1999 U.S. App. LEXIS 22783 (5th Cir. 1999), the Fifth Circuit articulated a structure for determining when a court can assume jurisdiction of a company with a presence in cyberspace.

1.         The Fifth Circuit followed the sliding scale in Zippos Mfg. Co. v. Zippo Dot Com, 952 F. Supp. 1119, 1124 (W.D. Pa. 1997), setting out three levels of Internet business. (51)

a.         First, companies which merely advertise or post information about their business on the Internet with “passive” Web sites cannot be sued out of state simply because they maintain the Web site. In Mink, the company’s Web site “provides users with a printable mail-in order form, AAAA’s toll-free telephone number, a mailing address, and an electronic mail (“e-mail”) address, [and] orders are not taken through AAAA’s website [sic]. This does not classify the website [sic] as anything more than a passive advertisement.” Mink at *7.

b.         The second category consists of companies whose Web site allows a user to exchange information with a host computer. Citing Zippos, the Court reasoned that “the exercise of jurisdiction is determined by the level of interactivity.” Mink at *7 – *8.

c.         The companies which enter into contracts with out-of-state residents that involve the “knowing and repeated transmission of computer files over the Internet,” can be sued in the home state of the out of state residents. Mink at *8 -*9.

IX.     Conclusion

We are now at the point where there are judicial precedents and/or proposed statutes resolving many previously troubling Internet issues. Future cases are likely to focus more on reconciling the conflicts between intellectual property rights and/or privacy rights, on one hand, and free speech rights, on the other hand.

END NOTES

(1) In Vault Corp. v. Quaid Software Ltd., 847 F.2d 255 (5th Cir. 1988), the Fifth Circuit, applying Louisiana law, held that the shrinkwrap license was unenforceable. In this case, the Plaintiff, Vault Corporation, developed software for Vault Corp.’s software developer customers to embed in their software to prevent their end user customers from using the software on more than one computer. When the Vault Corporation sold its software, it included a shrinkwrap license which was expressly authorized by a Louisiana statute and prohibited reverse engineering of the software. The defendant, Quaid, purchased the software and reversed engineered it. The Fifth Circuit held that the shrinkwrap license and the related statute were unenforceable because they were “pre-empted” by copyright law. The Court’s holding implies that if pre-emption does not apply, then the shrinkwrap license is enforceable. Most courts that have decided the issue have held that agreements prohibiting reverse engineering and disclosure of confidential information are not pre-empted by the Copyright Act because they involve an agreement between private consenting parties, and therefore are different from copyright which is imposed by statute. See, e.g., Computer Associates v. Altai, 982 F.2d 693 (2nd Cir. 1992).

(2) See, e.g., Feist Publications, Inc. v. Rural Telephone Company Service, 499 U.S. 340, 111 S. Ct. 1282, 113 L.Ed. 2d 358 (1991). For additional materials on copyright law, see the writers’ law firm Web site at http://www.internetlegal.com. There is some concern among commentators that to allow unlimited use of shrinkwrap and clickwrap licenses to protect material not otherwise protected by copyright law could vitiate the copyright fair use doctrine.

(3) This case also dealt with the enforceability of a limitations of remedies clause contained in a shrinkwrap license.

(4) See O.C.G.A. §10-12-2.

(5) A “secure electronic signature” is defined as “an electronic or digital method executed or adopted by a party with the intent to be bound by or to authenticate a record, which is unique to the person using it, is capable of verification, is under the sole control of the person using it, and is linked to data in such a manner that if the data are changed the electronic signature is invalidated.” O.C.G.A. §10-12-3.

(6) The Act provides, in Section 106, Legal Recognition of Electronic Records, Electronic Signatures, and Electronic Contracts

(a)        A record or signature may not be denied legal effect or enforceability solely because it is in electronic form.

(b)        A contract may not be denied legal effect or enforceability solely because an electronic record was used in its formation.

(c)        If a law requires a record to be in writing, or provides consequences if it is not, an electronic record satisfies the law.

(d)       If a law requires a signature, or provides consequences in the absence of a signature, the law is satisfied with respect to an electronic record if the electronic record includes an electronic signature.

See UETA Sections 201, 301, and 401(a) (1998 Annual Meeting Draft); Uncitral Model Articles 5, 6, and 7.

(7) A copy of the proposed Act is available online at www.law.upenn.edu/library/ulc/ulc.htm

(8) The National Conference of Commissioners on Uniform State Laws (NCCUSL) and the American Law Institute (ALI) are responsible for overseeing updates to the Uniform Commercial Code. In 1995, a committee was formed to draft a separate UCC article to specifically address software licensing and electronic commerce. Various versions have been proposed and debated. The goal is to propose a version that most, if not all, of the state legislatures will adopt.

(9) UCITA was approved by the National Conference of Commissioners on Uniform State Laws (NCCUSL) at its annual meeting in Denver at the end of July, 1999. Foster, Ed, UCITA Author Does Some Moonlighting for Money, Courtesy of Microsoft, InfoWorld: The Gripe Line, Oct. 11, 1999.

(10) Graff, George L., Controversial Computer Act Offers Major Innovations: Proposed Uniform Statute for The Information Age Is Approved, Computer Law Strategist, Aug. 1999, Vol. XVI, No. 4.

(11) Id.

(12) See also http://www.ll.georgetown.edu/allwash/UCITA2html

(13) Spam is the name given for unsolicited e-mail messages which flood the Internet. Spam generally consists of commercial advertising (sometimes for adult oriented Web sites or get-rich-quick schemes).

(14) A copy of this Order is attached as Appendix A.

(15) See William M. McSwain, The Long Arm of Cyber-Reach, 112 Harv. L. Rev. ___ (Issue 7, May, 1999).

(16) See, CompuServe, Inc. v. Cyber Promotions, Inc., 962 F.Supp. 1015 (S.D. Ohio 1997) in which the court held that enjoining the sending of spam to CompuServe’s customers was based on a trespass action that didn’t involve First Amendment considerations.

(17) See Central Hudson Gas & Elec. Corp. v. Public Serv. Comm’n of N.Y., 447 U.S. 557, 562-563, 65 L.Ed.2d 341, 100 S.Ct. 2343 (1980).

(18) Cf. Sable Communications v. FCC, 492 U.S. 115, 127-128, 109 S.Ct. 2829, 2837, 106 L.Ed.2d 93 (1989) (there is no captive audience problem where the listener of dial-a-porn must take affirmative steps to receive the communication).

(19) See Intel v. Hamidi, supra.

(20) In similar cases, the First Amendment issue was not raised. See, e.g., America Online v. IMS, 24 F. Supp. 2d 548 (E.D. Va. 1998); America Online v. Prime Data Sys., Inc., 1998 U.S. Dist. LEXIS 20226 (E.D. Va. 1998); America Online v. LCGM, Inc., 46 F. Supp. 2d 444 (E.D. Va 1998).

(21) The text is attached as Appendix B.

(22) Because this language is written broadly enough to prevent noncommercial anonymous bulk e-mailings, it arguably violates the First Amendment. See, ACLU of Georgia v. Miller, 977 F.Supp. 1228 (N.D. Ga. 1997).

(23) The Act defines the term “unsolicited electronic mail message” as “any substantially identical electronic mail message other than electronic mail initiated by any person to others with whom such person has a prior relationship, including prior business relationship, or electronic mail sent by a source to recipients where such recipients, or their designees, have at any time affirmatively requested to receive communications from that source.”

(24) Nev. Rev. Stat. 41.735 provides immunity for persons who provide users with access to a network and applies to items of electronic mail obtained voluntarily.

(25) Nev. Rev. Stat. 41.715 defines “electronic mail” as a message, a file or other information that is transmitted through a local, regional or global network, regardless of whether the message, file or other information is:

1. Viewed;

2. Stored for retrieval at a later time;

3. Printed onto paper or other similar material; or

4. Filtered or screened by a computer program that is designed or intended to filter or screen items of electronic mail.

(26) Cal. Business & Professions Code §17538.4 provides as follows:

(a) No person or entity conducting business in this state shall facsimile (fax) or cause to be faxed, or electronically mail (e-mail) or cause to be e-mailed, documents consisting of unsolicited advertising material for the lease, sale, rental, gift offer, or other disposition of any realty, goods, services, or extension of credit unless:

(1) In the case of a fax, that person or entity establishes a toll-free telephone number that a recipient of the unsolicited faxed documents may call to notify the sender not to fax the recipient any further unsolicited documents.

(2) In the case of e-mail, that person or entity establishes a toll-free telephone number or valid sender operated return e-mail address that the recipient of the unsolicited documents may call or e-mail to notify the sender not to e-mail any further unsolicited documents.

(b) All unsolicited faxed or e-mailed documents subject to this section shall include a statement informing the recipient of the toll-free telephone number that the recipient may call, or a valid return address to which the recipient may write or e-mail, as the case may be, notifying the sender not to fax or e-mail the recipient any further unsolicited documents to the fax number, or numbers, or e-mail address, or addresses, specified by the recipient.

In the case of faxed material, the statement shall be in at least nine-point type. In the case of e-mail, the statement shall be the first text in the body of the message and shall be of the same size as the majority of the text of the message.

(c) Upon notification by a recipient of his or her request not to receive any further unsolicited faxed or e-mailed documents, no person or entity conducting business in this state shall fax or cause to be faxed or e-mail or cause to be e-mailed any unsolicited documents to that recipient.

(d) In the case of e-mail, this section shall apply when the unsolicited e-mailed documents are delivered to a California resident via an electronic mail service provider’s service or equipment located in this state. For these purposes “electronic mail service provider” means any business or organization qualified to do business in this state that provides individuals, corporations, or other entities the ability to send or receive electronic mail through equipment located in this state and that is an intermediary in sending or receiving electronic mail.

(e) As used in this section, “unsolicited e-mailed documents” means any e-mailed document or documents consisting of advertising material for the lease, sale, rental, gift offer, or other disposition of any realty, goods, services, or extension of credit that meet both of the following requirements:

(1) The documents are addressed to a recipient with whom the initiator does not have an existing business or personal relationship.

(2) The documents are not sent at the request of, or with the express consent of, the recipient.

(f) As used in this section, “fax” or “cause to be faxed” or ” e-mail” or “cause to be e-mailed” does not include or refer to the transmission of any documents by a telecommunications utility or Internet service provider to the extent that the telecommunications utility or Internet service provider merely carries that transmission over its network.

(g) In the case of e-mail that consists of unsolicited advertising material for the lease, sale, rental, gift offer, or other disposition of any realty, goods, services, or extension of credit, the subject line of each and every message shall include “ADV:” as the first four characters. If these messages contain information that consists of unsolicited advertising material for the lease, sale, rental, gift offer, or other disposition of any realty, goods, services, or extension of credit, that may only be viewed, purchased, rented, leased, or held in possession by an individual 18 years of age and older, the subject line of each and every message shall include “ADV:ADLT” as the first eight characters.

(h) An employer who is the registered owner of more than one e-mail address may notify the person or entity conducting business in this state e-mailing or causing to be e-mailed, documents consisting of unsolicited advertising material for the lease, sale, rental, gift offer, or other disposition of any realty, goods, services, or extension of credit of the desire to cease e-mailing on behalf of all of the employees who may use employer-provided and employer-controlled e-mail addresses.

(i) This section, or any part of this section, shall become inoperative on and after the date that federal law is enacted that prohibits or otherwise regulates the transmission of unsolicited advertising by electronic mail (e-mail).

(27) See Digital Millenium Copyright Act, Sec. 1201. Circumvention of copyright protection systems.

(28) Digital Performance Right in Sound Recordings Act of 1995 (Public Law 104-39).

(29) The Rio portable music player is a digital audio recording device. The Rio is a small device (roughly the size of an audio cassette) with headphones that allows a user to download MP3 audio files from a computer and to listen to them elsewhere.

(30) See 17 U.S.C. §1001 et seq. (P.L. 102-563, at 4, 106 Stat. 4248).

(31) Discord Surrounding Diamond Multimedia’s Rio Player is Ended Through Settlement Agreement, The Intellectual Property Strategist, Sept. 1999, Volume 1, Number 12, at 4.

(32) See P.L. 105-298, 112 Stat. 2827.

(33) Eric Eldred founded Eldritch Press in late 1995, and initially, Eldritch Press posted works of American literature by authors such as Nathaniel Hawthorne and Henry James. Now, Eldritch Press posts new works the moment they enter the public domain. Some of the works Eldritch Press posts are out of print or are not included in library collections, and therefore they are not obtainable by the public in any other way. See How Long is Too Long? Recent Congressional Copyright Giveaway Claimed Unconstitutional at http://eldred.ne.mediaone.net/pr-1999-01-12.txt.

(34) See Eldred v. Reno, United States District Court for the District of Columbia, Case No. 1:99CV00065 JLG (filed January 11, 1999). Visit this Web site to view the pleadings in this case: http://cyber.law.harvard.edu/eldredvreno/legaldocs.html.

(35) See http://www.kingkong.demon.co.uk/ccer/ccer.htm, a site that documents all renewals of 1923 book copyrights, representing works that the Copyright Term Extension Act keeps from the public domain.

(36) Slotek, Jim, M-I-C . . . © you real soon . . . k-e-y . . ., Toronto Sun Times, Nov. 1, 1998; see also Naughton, John, Mickey Mouse Saved for Disney? Phew. What a Narrow Squeak, Guardian Unlimited, May 2, 1999.

(37) As found by the Court, Playboy Enterprises (PEI):

owns federally registered trademarks for the terms Playboy, Playmate, Playmate of the Month, and Playmate of the Year. The term Playmate of the Year is sometimes abbreviated “PMOY.” PEI does not have a federally registered trademark in the abbreviation “PMOY,” although PEI argues that “PMOY” is worthy of trademark protection because it is a well-known abbreviation for the trademark Playmate of the Year.

Playboy Enterprises, 7 F.Supp.2d 1098, 1100.

(38) The Court also found that, with respect to the meta tags, there is no trademark infringement where defendant has used Playboy’s trademarks in good faith to index the content of her Web site.

(39) This statute would allow a court to order the cancellation or forfeiture of the domain name or the transfer of the name to the owner of the trademark. It will make it possible for plaintiffs to go after domain names as a group rather than being forced to sue each of the registrants individually. See Porsche Cars North America, Inc. v. porsch.com, 51 F. Supp. 2d 707 (E.D. Va. 1999), 51 U.S.P.Q.2d (BNA)1461, in which the Court rejected Porsche’s “in rem” claim to grab control of domain names incorporating versions of the “Porsche” name to avoid having to individually sue hundreds of registrants that had registered those domain names.

(40) Mack, Jennifer, Nader Proposes Limits to ICANN, ZDNet News, Sept. 27, 1999.

(41) A framework for ICANN and DNS Management

Initial Proposals (comments welcome)

version 1.02 September 25, 1999

1. ICANN’s authority should be based upon a multilateral government charter. That Charter should define and limit ICANN’s authority.

2. The charter should be based upon a limited purpose sui generis agreement among countries that express interest in working together, and that agree that ICANN’s role should be limited to tasks essential to maintaining an efficient and reliable DNS management, and that ICANN will not be used as an instrument to promote policies relating to conduct or content on the Internet. (Additional multilateral institutions may be desired to address electronic commerce issues, but ICANN itself should not become the foundation for a vast Internet governance institution. See http://www.cptech.org/ecom/cpt-wcpo.html)

3. ICANN should not use its power over domain registration policy to exclude persons from the use of a domain on issues that are not germane to managing the DNS system of mapping IP addresses into domain names. The right to have a domain on the Internet should be considered the same as the right to have a street address, a telephone number or a person’s name.

4. ICANN should identify a membership and elect its board of directors from its membership before it makes additional policy decisions (in those areas appropriate for action by ICANN).

5. Membership should be open to anyone who uses the Internet. There should be no fee associated with membership or voting rights.

6. The records of ICANN should be open to the public. The public should have rights to documents as, similar to rights provided in the US Freedom of Information Act.

7. The meetings of ICANN should be open to the public.

8. The public should be given an annual opportunity to review and comment on the ICANN budget.

9. The budget of ICANN should be subject to review by the countries that provide the ICANN charter. Fees associated with domain registration should only be spent on activities essential to the management of the DNS system.

10. National governments should be permitted to exercise discretion over policies relating to the use of country top level domains (.fr, .uk, .us, etc.).

11. For generic top level domains (.com, .org, .net, and new gTLDs), the domain space should be declared a public resource. The registrar or registries perform services on behalf of the users of the domains, and will not own the domain space. It should be possible to replace firms engaged in registration services and DNS management, without risking the stability of the Internet.

12. On matters of public interest (in the narrow areas where ICANN will operate), such as policies regarding the use of trademarks or the privacy of domain registration information, ICANN should make recommendations to the sui generis multinational body created to manage ICANN, and the multinational body should accept, reject or modify the recommendations, after giving the public a fully adequate opportunity to review and comment on the proposals.

13. On the issue of trademarks, the Charter should explicitly protect the public’s rights to parody, criticism and free speech. For example, domain names like GM-sucks.com, which would not be confused with GM.com, should be permitted.

(42) Becky Burr is the Associate Administrator of the National Telecommunication and Information Administration, Office of International Affairs.

(43) The Act defines “personal information” to include an individual’s first and last name, home and other physical address, e-mail address, social security number, and telephone number. 1999 S. 809; 106 S. 809.

(44) See Benjamin I. Berman, Acting Secretary of the Federal Trade Commission, Federal Register Notice announcing Public Workshop on Proposed Regulations Implementing the Children’s Online Privacy Protection Act, Supplementary Information, June 23, 1999, 16 C.F.R. Part 312, Children’s Online Privacy Protection Rule at http://www.ftc.gov/os/1999/9906/kidsprivacy.htm.

(45) For the official text of the European Union Privacy Directive, see Official Journal of the European Communities of 23 November 1995 No L. 281 p. 31. For an unofficial version, visit http://www.cdt.org/privacy/eudirective/EU_Directive_.html.

(46) See, e.g., Mosceyunas, Anne K., On-Line Privacy: The Push and Pull of Self-Regulation and Law, Computer Law Section Newsletter, State Bar of Georgia, July, August, September, 1999, pp. 13-15; Cranman, Kevin A., Internet and Electronic Communication Privacy Issues: An Overview and Legislative Update, 14th Annual Computer Law Institute, Program Materials 1999, Part 10.

(47) Winn, Jane K., Digital Signatures, Smart Cards, and Electronic Payment Systems, ICLE Fourteenth Annual Computer Law Institute, Sept. 24, 1999, p. 22.

(48) See Joint Report on Data Protection Dialogue to the EU/US Summit, June 21, 1999, which is attached as Appendix C.

(49) Id.

(50) See http://www.ibm.com/privacy/.

(51) For further analysis, see Koppel, Nathan, Cyber-Ad Jurisdiction Isn’t Automatic, Texas Lawyer, Sept. 27, 1999.

The information above is provided for general educational purposes and not as legal advice. Laws in areas in which we practice change continually and also vary from jurisdiction to jurisdiction. Therefore no visitor to our site should rely on any of the articles provided for legal advice, but should always consult their own attorney regarding legal matters.

© 1999, Rob Hassett, Atlanta, Georgia. All Right Reserved.