Ever since the courts first began applying copyright law in cyberspace in the early 1990s, concerned observers have been polarized about whether, and to what degree, the Internet should be treated differently than conventional media. In the visionary polemics of the Internet gurus, the Copyright Act is an embarrassing relic of the hard-copy dark ages, which should be abolished altogether in the virtual utopia of the Internet. And if government does not take action to abolish it, it will simply wither and die of its own irrelevance. As John Perry Barlow phrased it in Wired magazine in early 1994, "Intellectual property law cannot be patched, retrofitted, or expanded to contain digitized expression any more than real estate law might be revised to cover the allocation of broadcasting spectrum (which, in fact rather resembles what is being attempted here). We will need to develop an entirely new set of methods as befits this entirely new set of circumstances."1

In the eyes of most copyright owners and their lawyers, more at home with the Journal of the Copyright Society than Wired magazine, the Internet is largely just another new medium through which copyrighted works can be distributed and infringed. It may call for new technical enforcement measures and minor statutory tinkering, but requires no substantial changes in the basic workings of copyright law. This latter go-slow approach has generally been reflected in the court decisions and legislation that have addressed the issue so far. The Clinton Administration's 1995 "White Paper" on digital copyright issues, for example, concluded "The [Commerce Department's] Working Group examined the adequacy of the intellectual property laws to cope with the pace of technological change. It found that . . . the Copyright Act is fundamentally adequate and effective. In a few areas, however, it has recommended limited amendments to the Copyright Act to take proper account of current technology."

Two recent cases, Kelly v. Arriba Soft Corp.2 and Intellectual Reserve, Inc. v. Utah Lighthouse Ministry,3 seem to indicate that the prudent, incremental approach exemplified by the White Paper may be losing momentum, as the unique virtues and vices of the Internet become more apparent to the courts. In Kelly, a district court in California effectively held, on cross-motions for summary judgement, that a "visual search engine" did not infringe the copyrights in over two million images which it had copied from the World Wide Web without authorization. The court's reasoning centered largely on the "established importance of search engines" in the functioning of the Web, which made the duplication of the images a "transformative" fair use. In Intellectual Reserve, a district court in Utah held that merely posting the URLs, or Website addresses, of sites known to contain infringing material, and encouraging others to visit those sites, would likely constitute contributory infringement and thus could be enjoined.

As different as the results in these cases are, with one court reaching to find "transformative" fair use and the other stretching to find contributory infringement, they share a fundamental vision of the Internet, and specifically the Web, as a place where existing law needs to be reshaped in order to do justice. This column will describe the Kelly and Intellectual Reserve cases, and suggest that both results would be problematic in the world of hard-copy conventional media. In conclusion, we will offer some comments about the issues these decisions raise for the future.

Kelly v. Arriba Soft

Photographer Leslie Kelly brought the action after thirty-five of his photos were placed into the database of a so-called "visual search engine" by defendant Arriba without Kelly's permission. Like the other images in the Arriba database, the photos were obtained by operation of an automated "crawler" which sought out images on the Web. The captured images, including Kelly's, were copied onto Arriba's server, reduced to "thumbnail" form, then sorted and indexed by Arriba personnel. A visitor to the Arriba site could access the images by typing in a query, then clicking on the desired thumbnail to view a full-size display of the image. Kelly sued in the Central District of California, claiming copyright infringement and a violation of the new Digital Millennium Copyright Act ("DMCA"), specifically § 1202, which prohibits the reproduction of works without their appropriate "copyright management information." Arriba raised a defense of fair use under § 107, and both parties moved for summary judgment.

On December 15, Judge Gary Taylor, recognizing the case as one of "apparent first impression," initially acknowledged that Arriba's actions constituted a prima facie infringement of Kelly's exclusive right to reproduce and display his photographs. Nonetheless, the unauthorized reproduction and display were not infringing, found the court, because Arriba's activities constituted a fair use of Kelly's material under § 107.

Turning to the first factor of the fair use analysis, i.e., the purpose and character of the defendant's use, the court noted that even though Arriba's use of the images was commercial, Kelly's photos "did not represent a significant element of that commerce, nor were they exploited in any special way. They were reproduced as a result of defendant's generally indiscriminate method of gathering images." In other words, Arriba did not advertise or attempt to capitalize on the Kelly photos per se, it merely happened to have them in its database along with millions of other images.Moreover, the defendant's intention of compiling a comprehensive index of creative work made the result "transformative," in the court's view, because

Defendant's use is very different from the use for which the images were originally created. Plaintiff's photographs are artistic works used for illustrative purposes. Defendant's visual search engine is designed to catalog and improve access to images on the Internet. The character of the thumbnail index is not esthetic but functional; its purpose is not to be artistic, but comprehensive.

Even if the court's characterization of the uses is accurate, the distinction between aesthetic and functional uses has not previously been the basis for a finding of transformative use in the context of conventional media. A similar argument was rejected by the Second Circuit recently in Infinity Broadcast Corp. v. Kirkwood,4 which held that the transmission of radio programming to distant cities by telephone, for purposes such as allowing sponsors to verify the airing of ads, was not transformative. Infinity Broadcast emphasized the fact that the defendant did not transform the plaintiff's works, but merely repackaged them, in their entirety, in a different format. In reaching this result, Infinity Broadcast joined a line of cases such as the en banc Sixth Circuit decision in Princeton University Press v. Michigan Document Serv.,5 which held in 1996 that compiling photocopied articles and book chapters into college "course packs" was not transformative.

Without making reference to this extensive case law on transformative use, the Kelly decision identified the transformative element of the search engine as "using reduced versions of images to organize and provide access to them." Presumably, however, the court viewed this activity as transformative only on the Web; commercial microfilm producers have been doing the same thing for years, and few would argue that they should be protected under the fair use doctrine. Indeed, the Kelly court explicitly linked the "transformativeness" of Arriba's use to the fact that it was embodied in a new technology, concluding that "where, as here, a new use and new technology are evolving, the broad transformative purpose of the use weighs more heavily than the inevitable flaws in its early stages of development."

It would seem, then, that a Web-based digital image repository is transformative but a hard-copy image repository, e.g. a microfilm or slide archive, is not. Further, the court considered the transformative nature of Arriba's use "the most significant factor favoring Defendant." Thus, with very little substantive analysis, the court seems to have declared that a different, more lenient approach to fair use must apply to a "new enterprise" on the Internet, simply because it is embodied in an "evolving" technology.

The court repeated this reasoning under the fourth fair use factor, the likelihood of harm to the market for plaintiff's work. Even after acknowledging that defendant's site allows users to "deep link" directly to individual images on plaintiff's site without going through his home page, a practice which could pose a significant threat to an advertiser-supported site, the court found no evidence of "harm or adverse impact." In conclusion, the court noted that "the first and fourth factors . . . weigh in favor of a finding of fair use because of the established importance of search engines and the 'transformative' nature of using reduced versions of images to organize and provide access to them."

Whatever the "established importance of search engines" may be, and whatever relevance that may have to copyright law, the reasoning of Kelly marks a significant departure from prior decisions, particularly with respect to transformative use. Whether the decision is ultimately seen as a watershed or an anomaly will depend largely on whether the Ninth Circuit, and other courts around the country, agree with Kelly that the Web calls for a fundamentally different approach to fair use than has heretofore been applied to conventional media.6

Intellectual Reserve

In Intellectual Reserve, Inc. v. Utah Lighthouse Ministry, Inc., the District of Utah also approached the Web as terra incognita under the Copyright Act, and produced a result as potentially alarming to innocent Web users as Kelly is to copyright owners. Utah Lighthouse Ministry ("ULM") is an organization critical of certain teachings of the Mormon Church. Beginning in July 1999, ULM posted 17 pages from the Church's 160-page Church Handbook of Instructions, allegedly in an attempt to respond to inquiries it had received. Intellectual Reserve, Inc. ("IR"), which owns the Church's intellectual property assets, sued in the District of Utah for a temporary restraining order to force ULM to take down the unauthorized posting. After the TRO was granted and the posting taken down, ULM displayed an e-mail message from one of its users indicating that the Church Handbook of Instructions could be found at three Websites other than ULM's ("Church Handbook of Instructions is back online!"), and further specifying the Web addresses of those three sites.

IR sought to expand the injunction to prevent what it characterized as an "end-run" around the court's order, and on December 6 Judge Tena Campbell granted IR's request. The court enjoined ULM from reproducing or distributing any of the allegedly infringing material, either electronically or in hard copies, but also ordered that ULM "remove from and not post on [its] website, addresses to websites that defendants know, or have reason to know, contained the material" (emphasis added).

The basis of the court's injunction was not that the posting of Website addresses directly infringed the Church's copyright, but rather that it constituted contributory infringement. Citing Gershwin Pub. Corp. v. Columbia Artists Mgt. Inc.,7 the court defined contributory infringement as inducing, causing, or materially contributing to the infringing conduct of a third party, "with knowledge of the infringing activity." As to the operators of the three sites that posted the church material after ULM removed it, the court concluded that ULM did not induce, cause or contribute to the unauthorized postings. It did not supply the sites with infringing material or receive any compensation from them, leaving the court to conclude that "there is no direct relationship between the defendants and the people who operate the three sites."

As to the individual users who visited the infringing sites, however, the court held that ULM's actions did "actively encourage" direct infringement by these users. The court reasoned under MAI Sys. Corp. v. Peak Computer Inc.8 that each time a user browses one of the infringing sites, a copy of the infringing material is made in the RAM memory of that user's computer, "and in making a copy, even a temporary one, the person who browsed infringes the copyright."

The court remarked in a footnote that it "seems harsh" to hold users responsible for unintentional infringement each time they browse the Web, but observed that such innocent infringers may qualify for reduced statutory damages under § 504(c)(2). The court did not discuss potential defenses to such technical infringements, such as de minimus use or fair use. 9Even assuming that MAI renders Web-browsing a violation of the reproduction right, that violation is not an infringement if the user's temporary copying of the material into RAM is a fair use. And if the user is not a direct infringer, ULM cannot be a contributory infringer. See Sony Corp. of Am. v. Universal City Studios.10

In the absence of any discussion of fair use or de minimus use, the court's analysis of ULM's contributory infringement liability is straightforward: ULM knew the three sites were infringing, it "actively encouraged" users to visit those sites for the express purpose of viewing the infringing material, thus it is a contributory infringer under Gershwin. This result is basically consistent with the leading Internet contributory-infringement case, Religious Technology Center v. Netcom On-Line Comm. Servs., Inc.,11 which held that on-line service provider Netcom could be liable if it had knowledge that one of its subscribers was using Netcom's facilities to infringe. Indeed, the active inducement given by ULM seems far more of a "material contribution" to the user's infringement than was Netcom's passive provision of technical services, and ULM's knowledge was clearly established.

Intellectual Reserve is also consistent with the 1998 decision in Bernstein v. J.C. Penney,12 or at least not inconsistent with it. Bernstein is somewhat cryptic but appears to say that providing hypertext links which lead ultimately to an infringing site does not amount to contributory infringement, at least where the defendant lacks knowledge and the infringing material is only linked to defendant's site through one or more intermediate sites. In Intellectual Reserve, by contrast, defendant had knowledge and directly provided the URL's of the infringing sites.

Nevertheless, the reasoning and result in Intellectual Reserve may require greater restraint on the part of Website operators than has ever been expected of conventional media. Professor Jessica Litman has criticized the decision, stating: "If I give a footnote in a law review article for a plagiarized book, that seems to be just telling people where the book is, not materially facilitating their infringement. This decision is like saying that providing footnotes to illegal material is illegal."13 Professor Litman's analogy ignores ULM's direct encouragement of its web-site visitors not only to browse the infringing website, but also to print copies of the infringing materials and distribute them to others. In addition, the analogy overlooks a potentially important distinction between books and Websites, namely that a person urged to read an infringing book does not commit a direct infringement while a user visiting an infringing site may. Nevertheless, if Intellectual Reserve is expanded beyond its particular facts and equities, serious problems could arise. For example, is there any reason why a law review article, or this newspaper should not be allowed to publish the URL's of infringing sites if the Utah Lighthouse Ministry cannot? Does a web posting necessarily "induce" infringement more readily than a comparable print publication because a user who encounters the URL information on the Web has quicker access to the infringing material? Or do print and other conventional media just have a stronger fair use argument? If so, why? Does the difference lie in the medium (hard-copy vs. digital), or the message (sober legal scholarship vs. "go check out this pirated material")? The court in Intellectual Reserve did not address these questions, but their answers may be crucial in defining the metes and bounds of copyright law on the Web.

Conclusion

These two cases raise difficult and important issues which are not likely to be conclusively resolved any time soon. Because the courts rested their decisions on fair use and contributory infringement, respectively, and because these are largely judge-made doctrines, the recent efforts to amend the Copyright Act may have very little effect on the development of the law in this area. Instead, the proper application of these flexible copyright doctrines to the Web may be influenced more by the perceptions of individual judges as to the relative importance of access versus content on the internet; the degree to which content protection will enhance rather than impede e-commerce; and the degree to which the internet requires sui generis treatment.

Both cases are likely to be appealed. Perhaps the argument between the Internet visionaries and the copyright traditionalists is just beginning.

This article was previously published in the New York Law Journal.

Footnotes

1John Perry Barlow, "The Economy of Ideas," Wired, Issue 2.03 (March 1994).

2No. SA CV 99-560 GLT[JW], 1999 U.S. Dist. LEXIS 19304 (C.D. Cal. Dec. 15, 1999).

3No. 2:99-CV-808C, 1999 U.S. Dist. LEXIS 19103 (D. Utah Dec. 6, 1999).

4150 F.3d 104 (2d Cir. 1998).

599 F.3d 1381 (6th Cir. 1996).

6The court also held that Arriba's reproduction of Kelly's images did not violate § 1202(b)(3) of the Digital Millennium Copyright Act, because Arriba did not have actual or constructive knowledge that the removal of "copyright management information" (such as copyright notices) from the images would "induce, enable, facilitate or conceal an infringement" of Kelly's rights by Arriba users. Although this holding is apparently the first judicial application of this section of the DMCA, and could thus be important for Website operators, it falls outside the scope of this article.

7443 F.2d 1159 (2d Cir. 1971).

8991 F.2d 511 (9th Cir. 1993). MAI was partly abrogated by statute under the DMCA, but not with respect to copies made on the computers of individual users.

9We express no view as to whether these defenses would be meritorious.

10464 U.S. 417 (1984) (no contributory infringement for makers of videocassette recorders, where users' "time-shifted" recordings of broadcast films was fair use).

11907 F. Supp. 1361 (N.D. Cal. 1995).

1250 U.S.P.Q.2d 1063 (C.D. Cal. 1998).

13Quoted in Carl S. Kaplan, "Cyber Law Journal: Copyright Decision Threatens Freedom to Link," The New York Times, Technology/Cybertimes, December 10, 1999.

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