United States: Advanced Copyright Issues On The Internet

I. INTRODUCTION

During recent years, the Internet has become the basic foundational infrastructure for the global movement of data of all kinds. With continued growth at a phenomenal rate, the Internet has moved from a quiet means of communication among academic and scientific research circles into ubiquity in both the commercial arena and private homes. The Internet is now a major global data pipeline through which large amounts of intellectual property are moved. As this pipeline is increasingly used in the mainstream of commerce to sell and deliver creative content and information across transnational borders, issues of intellectual property protection for the material available on and through the Internet are rising in importance.

Copyright law provides one of the most important forms of intellectual property protection on the Internet for at least two reasons. First, much of the material that moves in commerce on the Internet is works of authorship, such as musical works, multimedia works, audiovisual works, movies, software, database information and the like, which are within the usual subject matter of copyright. Second, because the very nature of an electronic online medium requires that data be "copied" as it is transmitted through the various nodes of the network, copyright rights are obviously at issue.

Traditional copyright law was designed to deal primarily with the creation, distribution and sale of protected works in tangible copies.¹ In a world of tangible distribution, it is generally easy to know when a "copy" has been made. The nature of the Internet, however, is such that it is often difficult to know precisely whether a "copy" of a work has been made and, if so, where it resides at any given time within the network. As described further below, information is sent through the Internet using a technology known as "packet switching," in which data is broken up into smaller units, or "packets," and the packets are sent as discrete units. As these packets pass through the random access memory (RAM) of each interim computer node on the network, are "copies" of the work being made?

The case of MAI Systems Corp. v. Peak Computer² held that loading a computer program into the RAM of a computer constituted the making of a "copy" within the purview of copyright law. This case has been followed by a number of other courts. Under the rationale of this case, a "copy" may be created under United States law at each stage of transmission of a work through the Internet. The language of two treaties discussed extensively in this paper – the WIPO Copyright Treaty³ and the WIPO Performances and Phonograms Treaty⁴ – leave unclear the crucial question whether the MAI approach will be internationalized. In any event, these two treaties would strengthen copyright holders‟ rights of "distribution" and would create new rights of "making available to the public" a copyrighted work, both of which are implicated by transmissions through the Internet nearly as broadly as the right of reproduction.

The ubiquitous nature of "copying" in the course of physical transmission gives the copyright owner potentially very strong rights with respect to the movement of copyrighted material through the Internet, and has moved copyright to the center of attention as a form of intellectual property on the Internet. If the law categorizes all interim and received transmissions as "copies" for copyright law purposes, or treats all such transmissions as falling within the right of distribution of the copyright owner, then activities that have been permissible with respect to traditional tangible copies of works, such as browsing and transfer, may now fall within the control of the copyright holder.

This paper discusses the multitude of areas in which copyright issues arise in an online context. Although the issues will, for simplicity of reference, be discussed in the context of the Internet, the analysis applies to any form of online usage of copyrighted works. Part II of this paper discusses the various copyright rights that may be implicated by transmissions and use of works on the Internet, including new rights and remedies, as well as certain limitations on liability for online service providers afforded under federal statutes. Part III then analyzes the application of those rights to various activities on the Internet, such as browsing, caching, operation of an online service or bulletin board, linking to other sites, creation of derivative works, and resale or subsequent transfer of works downloaded from the Internet. Part III also analyzes the application of the fair use doctrine and the implied license doctrine to various Internet activities. Because the law is still developing with respect to many of these issues, a great deal of uncertainty is likely to exist as the issues are worked out over time through the courts and the various relevant legislative bodies and industry organizations.

II. RIGHTS IMPLICATED BY TRANSMISSION AND USE OF WORKS ON THE INTERNET

This Part discusses the various rights of the copyright holder – the right of reproduction, the right of public performance, the right of public display, the right of public distribution, the right of importation, and the new rights of transmission and access – that are implicated by the transmission and use of works on the Internet.

A. The Right of Reproduction

The single most important copyright right implicated by the transmission and use of works on the Internet is the right of reproduction. As elaborated below, if the law categorizes all interim and received transmissions as "copies" for copyright law purposes, then a broad range of ordinary activities on the Internet, such as browsing, caching, and access of information, may fall within the copyright holder‟s monopoly rights.

1. The Ubiquitous Nature of "Copies" on the Internet

Under current technology, information is transmitted through the Internet using a technique known broadly as "packet switching." Specifically, data to be transmitted through the network is broken up into smaller units or "packets" of information, which are in effect labeled as to their proper order. The packets are then sent through the network as discrete units, often through multiple different paths and often at different times. As the packets are released and forwarded through the network, each "router" computer makes a temporary (ephemeral) copy of each packet and transmits it to the next router according to the best path available at that instant, until it arrives at its destination. The packets, which frequently do not arrive in sequential order, are then "reassembled" at the receiving end into proper order to reconstruct the data that was sent.⁵ Thus, only certain subsets (packets) of the data being transmitted are passing through the RAM of a node computer at any given time, although a complete copy of the transmitted data may be created and/or stored at the ultimate destination computer, either in the destination computer‟s RAM, on its hard disk, or in portions of both.

To illustrate the number of interim "copies," in whole or in part, that may be made when transmitting a work through the Internet, consider the example of downloading a picture from a website. During the course of such transmission, no less than seven interim copies of the picture may be made: the modem at the receiving and transmitting computers will buffer each byte of data, as will the router, the receiving computer itself (in RAM), the Web browser, the video decompression chip, and the video display board.⁶ These copies are in addition to the one that may be stored on the recipient computer‟s hard disk.⁷

2. Whether Images of Data Stored in RAM Qualify as "Copies"

Do these interim and final copies of a work (many of which are only partial) being transmitted through the Internet qualify as "copies" within the meaning of United States copyright law? The copyright statute defines "copies" as:

material objects, other than phonorecords, in which a work is fixed by any method now known or later developed, and from which the work can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device. The term "copies" includes the material object, other than a phonorecord, in which the work is first fixed.⁸

The language of the definition raises two issues concerning whether images⁹ of transmitted data in RAM qualify as "copies." First, depending upon where the data is in transit through the Internet, only a few packets – or indeed perhaps only a single byte – of the data may reside in a given RAM at a given time. For example, the modem at the receiving and transmitting computers may buffer only one or a few bytes of data at a time. A node computer may receive only a few packets of the total data, the other packets being passed through a different route and therefore a different node computer‟s RAM. Should the law consider these partial images a "copy" of the work? Should the outcome turn on whether all or most of the packets of data comprising the work pass through a given RAM, or only a portion? How can interim partial images of data stored in RAM be deemed a "copy" of a work, in the case where there is no point in time at which the entire work is available in a single RAM?

The White Paper published by the Working Group on Intellectual Property Rights of President Clinton‟s Information Infrastructure Task Force (referred to herein as the "NII White Paper") implicitly suggests that at least interim, partial copies of a work created in RAM in interim node computers during transmission may not themselves constitute a "fixed" copy:

A transmission, in and of itself, is not a fixation. While a transmission may result in a fixation, a work is not fixed by virtue of the transmission alone. Therefore, "live" transmissions via the NII [National Information Infrastructure] will not meet the fixation requirement, and will be unprotected by the Copyright Act, unless the work is being fixed at the same time as it is being transmitted.¹⁰

The second general issue raised by the definition of "copies" is whether images of data stored in RAM are sufficiently "permanent" to be deemed "copies" for copyright purposes. The definition of "copies" speaks of "material objects," suggesting an enduring, tangible embodying medium for a work. With respect to an image of data stored in RAM, is the RAM itself to be considered the "material object"? The image of the data in RAM disappears when the computer is turned off. In addition, most RAM is "dynamic" (DRAM), meaning that even while the computer is on, the data must be continually refreshed in order to remain readable. So the data is in every sense "fleeting." Is its embodiment in RAM sufficiently permanent to be deemed a "copy"?

The legislative history of the Copyright Act of 1976 would suggest that data stored in RAM is not a "copy." As noted above, a "copy" is defined as a material object in which a work is "fixed." The statute defines a work to be "fixed in a tangible medium of expression when its embodiment in a copy or phonorecord, by or under the authority of the author, is sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration."¹¹ The legislative history states:

[T]he definition of "fixation" would exclude from the concept purely evanescent or transient reproductions such as those projected briefly on a screen, shown electronically on a television or other cathode ray tube, or captured momentarily in the "memory" of a computer.¹²

This language suggests that images of data temporarily stored in RAM do not constitute "copies."¹³

Several cases, however, have held to the contrary. The leading case is MAI Systems Corp. v. Peak Computer, Inc.,¹⁴ which held that loading an operating system into RAM for maintenance purposes by an unlicensed third party maintenance organization created an illegal "copy" of the program fixed in RAM.¹⁵ When the MAI decision first came down, it was unclear whether that decision would support a legal principle that any storage of a copyrighted work in RAM, no matter how transiently, constituted a "copy" within the purview of copyright law, for the Ninth Circuit‟s opinion in MAI seemed somewhat qualified. The court in MAI noted that the "copy" of the operating system was stored in RAM for several minutes (rather than only a few seconds). In addition, the court emphasized that while in RAM, output of the program was viewed by the user, which confirmed the conclusion that the RAM "copy" was capable of being perceived with the aid of a machine:

[B]y showing that Peak loads the software into the RAM and is then able to view the system error log and diagnose the problem with the computer, MAI has adequately shown that the representation created in the RAM is "sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration."¹⁶

In addition, a decision from the Seventh Circuit handed down shortly after MAI, NLFC, Inc. v. Devcom Mid-Am., Inc.,¹⁷ although somewhat unclear on both the facts involved in the case and whether the court really understood the issue, contains language that may suggest that merely proving that the defendant has remotely accessed the plaintiff‟s software through a terminal emulation program is not sufficient to prove that a "copy" has been made.¹⁸ Moreover, an earlier Ninth Circuit decision in the case of Lewis Galoob Toys, Inc. v. Nintendo of America, Inc.¹⁹ implied that an image of data stored in RAM may not qualify as a "copy." At issue in that case was whether a device that altered certain bytes of data of a video game "on the fly" as such information passed through RAM created an infringing derivative work. The court held that it did not, because although a derivative work need not be fixed, it must have some "form" or "permanence," which were lacking in the enhanced displays created by the device. The court stated, however, that even if a derivative work did have to be fixed, the changes in the displayed images wrought on the fly by the accused device did not constitute a fixation because the transitory images it created were not "embodied" in any form.

Notwithstanding these earlier decisions, however, a great many courts have now followed MAI,²⁰ and some earlier decisions also support its conclusion.²¹ Although the opinion in one of these decisions suggests that only copies that exist for several minutes should constitute a "copy" within the purview of copyright law,²² the others appear not to focus on how transitorily an image may be stored in RAM in ruling that such an image constitutes a "copy" for purposes of copyright law.

One of these decisions, Intellectual Reserve, Inc. v. Utah Lighthouse Ministry, Inc.,²³ was the first decision to focus on whether the act of browsing on the Internet involves the creation of "copies" that implicate the copyright owner‟s rights. In that case, the court, citing the MAI decision, flatly stated, "When a person browses a website, and by so doing displays the [copyrighted material], a copy of the [copyrighted material] is made in the computer‟s random access memory (RAM), to permit viewing of the material. And in making a copy, even a temporary one, the person who browsed infringes the copyright."²⁴ This decision, although quite direct in its holding, appears to address only the final "copy" that is made in the RAM of a Web surfer‟s computer in conjunction with viewing a Web page through a browser. It does not address the trickier issue of whether whole or partial interim copies made in RAM of node computers during the course of transmission through the Internet also constitute "copies" within the purview of a copyright owner‟s copyright rights.

However, a 2004 decision from the Fourth Circuit, CoStar v. Loopnet,²⁵ held that transient copies made by an OSP acting merely as a conduit to transmit information at the instigation of others does not create fixed copies sufficient to make it a direct infringer of copyright. "While temporary electronic copies may be made in this transmission process, they would appear not to be fixed‟ in the sense that they are of more than transitory duration,‟ and the ISP therefore would not be a copier‟ to make it directly liable under the Copyright Act."²⁶ The court drew a distinction between the final copy of a work made in the RAM of the ultimate user‟s computer, and the transient copies made by an OSP in the course of transmitting such copies:

In concluding that an ISP has not itself fixed a copy in its system of more than transitory duration when it provides an Internet hosting service to its subscribers, we do not hold that a computer owner who downloads copyrighted software onto a computer cannot infringe the software‟s copyright. See, e.g., MAI Systems Corp. v. Peak Computer, Inc., 991 F.2d 511, 518-19 (9th Cir. 1993). When the computer owner downloads copyrighted software, it possesses the software, which then functions in the service of the computer or its owner, and the copying is no longer of a transitory nature. See, e.g., Vault Corp. v. Quiad Software, Ltd., 847 F.2d 255, 260 (5th Cir. 1988). "Transitory duration" is thus both a qualitative and quantitative characterization. It is quantitative insofar as it describes the period during which the function occurs, and it is qualitative in the sense that it describes the status of transition. Thus, when the copyrighted software is downloaded onto the computer, because it may be used to serve the computer or the computer owner, it no longer remains transitory. This, however, is unlike an ISP, which provides a system that automatically receives a subscriber‟s infringing material and transmits it to the Internet at the instigation of the subscriber.²⁷

A 2008 decision of the Second Circuit, The Cartoon Network LP v. CSC Holdings, Inc.,²⁸ addressed the issue of RAM copying in considerable detail, ruling that buffer copies in RAM made by Cablevision Systems Corp. in the course of converting channels of cable programming from the head end feed into a format suitable for storage of individual programs by a network digital video recording service upon customer demand were not fixed for sufficient duration to constitute "copies."²⁹ Cablevision made the buffer copies in conjunction with offering its "Remote Storage" Digital Video Recorder (RS-DVR) service that enabled Cablevision customers to record copies of particular programs, like a normal DVR, but to store the recorded programs on Cablevision‟s servers rather than on a DVR device at their homes. Cablevision created buffer copies, one small piece at a time, of the head end programming in two buffers – a primary ingest buffer and a Broadband Media Router (BMR) buffer – even if no customer requested that a copy of particular programming be stored on its behalf in the RS-DVR service. The primary ingest buffer held no more than 0.1 seconds of each incoming channel‟s programming at any moment. The data buffer in the BMR held no more than 1.2 seconds of programming at any time. The plaintiffs argued that these buffer copies made Cablevision a direct infringer of their copyrights.³⁰

The lower court found Cablevision a direct infringer largely in reliance on MAI and cases following it.³¹ The Second Circuit, however, reversed. The court noted that to satisfy the statutory definition of "copies," two requirements must be met – an "embodiment" requirement (embodiment in a tangible medium from which it can be perceived or reproduced) and a "duration" requirement (embodiment for a period of more than transitory duration). The Second Circuit found that the district court had mistakenly limited its analysis to the embodiment requirement, and that its reliance on MAI and cases following it was misplaced.³²

In general, those cases conclude that an alleged copy is fixed without addressing the duration requirement; it does not follow, however, that those cases assume, much less establish, that such a requirement does not exist. Indeed, the duration requirement, by itself, was not at issue in MAI Systems and its progeny.... Accordingly, we construe MAI Systems and its progeny as holding that loading a program into a computer‟s RAM can result in copying that program. We do not read MAI Systems as holding that, as a matter of law, loading a program into a form of RAM always results in copying.³³

Turning to the facts of the case at hand, the Second Circuit ruled that, although the embodiment requirement was satisfied by the buffers because the copyrighted works could be copied from them,³⁴ the duration requirement had not been satisfied. The court noted that no bit of data remained in any buffer for more than a fleeting 1.2 seconds, unlike the data in cases like MAI, which remained embodied in the computer‟s RAM until the user turned the computer off.³⁵ "While our inquiry is necessarily fact-specific, and other factors not present here may alter the duration analysis significantly, these facts strongly suggest that the works in this case are embodied in the buffer for only a transitory‟ period, thus failing the duration requirement."³⁶ Accordingly, the acts of buffering in the operation the RS-DVR did not create "copies" for which Cablevision could have direct liability.³⁷

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Footnotes

1 For example, under United States law, copyright protection subsists only in "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." 17 U.S.C. § 102(a).

2 991 F.2d 511 (9th Cir. 1993), cert. dismissed, 114 S. Ct. 672 (1994).

3 World Intellectual Property Organization Copyright Treaty, Apr. 12, 1997, S. Treaty Doc. No. 105-17 (1997).

4 World Intellectual Property Organization Performances and Phonograms Treaty, Apr. 12, 1997, S. Treaty Doc. No. 105-17 (1997).

5 If any packet is lost along the way, the originating computer automatically resends it, likely along a different path than the lost packet was originally sent.

6 Mark A. Lemley, "Dealing with Overlapping Copyrights on the Internet," 22 U. Dayton L. Rev. 547, 555 (1997).

7 Even if a complete copy of the picture is not intentionally stored on the recipient computer‟s hard disk, most computers enhance performance of their memory by swapping certain data loaded in RAM onto the hard disk to free up RAM for other data, and retrieving the swapped data from the hard disk when it is needed again. Some of this swapped data may be left on the hard disk when the computer is turned off, even though the copy in RAM has been destroyed.

8 17 U.S.C. § 101.

9 The word "image" is being used here to refer to an image of data stored in RAM to avoid use of the word "copy," which is a legal term of art. Whether an image of data in RAM should be deemed a "copy" for copyright law purposes is the question at issue.

10 Information Infrastructure Task Force, "Intellectual Property and the National Information Infrastructure: The Report of the Working Group on Intellectual Property Rights" at 27 (1995).

11 17 U.S.C. § 101 (definition of "fixed in a tangible medium of expression").

12 H.R. Rep. No. 94-1476, at 53 (1976), reprinted in U.S.C.C.A.N. 5659, 5666.

13 But see R. Nimmer, Information Law ¶ 4.02[2], at 4-6 (2001) ("This language refers to subject matter protection and not whether particular acts create an infringing copy. The exclusion of transient works refers to the work itself, not a copy. It presumes that there was no copy of the work other than the transient display or memory.")

14 991 F.2d 511 (9th Cir. 1993), cert. dismissed, 114 S. Ct. 672 (1994).

15 Id. at 518.

16 991 F.2d at 518.

17 45 F.3d 231 (7th Cir. 1995).

18 Id. at 236.

19 964 F.2d 965 (9th Cir. 1992).

20 See DocMagic, Inc. v. Ellie Mae, Inc., 2010 U.S. Dist. LEXIS 108628 (N.D. Cal. Oct. 12, 2010) at *60-61 (unauthorized loading of software into RAM constitutes an act of copying and thus of infringement); Apple, Inc. v. Psystar Corp., 673 F. Supp. 2d 931, 935 (N.D. Cal. 2009) (turning on computers that loaded into RAM copies of Apple‟s Mac OS X operating system containing unauthorized modifications constitute direct infringement of Apple‟s reproduction right); Quantum Sys. Integrators, Inc. v. Sprint Nextel Corp., 2009 U.S. App. LEXIS 14766 at *18-19 (4th Cir. July 7, 2009) (loading of software into RAM from unauthorized copies on hard disk was sufficiently fixed for purposes of copyright infringement); SimplexGrinnell LP v. Integrated Sys. & Power, Inc., 2009 U.S. Dist. LEXIS 30657 at *42 (S.D.N.Y. Apr. 8, 2009) (embodiment requirement is satisfied when a program is loaded for use into a computer‟s RAM and the duration requirement is satisfied when the program remains in RAM for several minutes or until the computer is shut off); MDY Industries, LLC v. Blizzard Entertainment, Inc., 2008 U.S. Dist. LEXIS 53988 (D. Ariz. July 14, 2008) (under MAI, copying software into RAM constitutes making a "copy" within the purview of copyright law, so that if a person is not authorized by the copyright holder through a license or by law (e.g. Section 117) to copy the software to RAM, the person commits copyright infringement when using the software in an unauthorized way); Ticketmaster L.L.C. v. RMG Technologies, Inc., 507 F. Supp. 2d 1096, 1005 (C.D. Cal. 2007) (copies of web pages stored in a computer‟s cache or RAM upon a viewing of the web page fall within the Copyright Act‟s definition of a "copy"); Storage Technology Corp. v. Custom Hardware Engineering & Consulting, Inc., 2004 U.S. Dist. LEXIS 12391 at *11-12 (D. Mass. July 2, 2004) (unauthorized copying of a program into RAM for use of the program infringes the copyright in the program); Lowry‟s Reports, Inc. v. Legg Mason, Inc., 271 F. Supp. 2d 737, 745 (D. Md. 2003) ("Unauthorized electronic transmission of copyrighted text, from the memory of one computer into the memory of another, creates an infringing copy‟ under the Copyright Act."); Stenograph L.L.C. v. Bossard Assocs., 144 F.3d 96 (D.C. Cir. 1998) (holding that an infringing copy of a computer program was made when that program was loaded into RAM upon boot up and used for its principal purposes); Triad Sys. v. Southeastern Express Co., 64 F.3d 1330 (9th Cir. 1995), cert. denied, 116 S. Ct. 1015 (1996); Intellectual Reserve, Inc. v. Utah Lighthouse Ministry, Inc., 53 U.S.P.Q.2d 1425 (D. Utah 1999); Tiffany Design, Inc. v. Reno-Tahoe Specialty, Inc., 55 F. Supp. 1113 (D. Nev. 1999); Marobie-FL Inc. v. National Association of Fire Equipment Distributors, 45 U.S.P.Q.2d 1236 (N.D. Ill. 1997); Advanced Computer Servs. v. MAI Sys., 845 F. Supp. 356 (E.D. Va. 1994); see also 2 M. Nimmer & D. Nimmer, Nimmer on Copyright § 8.08[A][1], at 8-114 (1999) (suggesting that RAM copies are fixed).

21 See Vault Corp. v. Quaid Software Ltd., 847 F.2d 255, 260 (5th Cir. 1988) ("the act of loading a program from a medium of storage into a computer‟s memory creates a copy of the program"); Apple Computer, Inc. v. Formula Int‟l, 594 F. Supp. 617, 621 (C.D. Cal. 1984) (noting that copying a program into RAM creates a fixation, albeit a temporary one); Telerate Sys. v. Caro, 8 U.S.P.Q.2d 1740 (S.D.N.Y. 1988) (holding that the receipt of data in a local computer constituted an infringing copy).

22 Advanced Computer Services v. MAI Systems, 845 F. Supp. 356, 363 (E.D. Va. 1994).

23 53 U.S.P.Q.2d 1425 (D. Utah 1999).

24 Id. at 1428.

25 373 F.3d 544 (4th Cir. 2004).

26 Id. at 551.

27 Id.

28 536 F.3d 121 (2d Cir. 2008), cert. denied sub nom. CNN, Inc. v. CSC Holdings, Inc., 2009 U.S. LEXIS 4828 (2009).

29 Id. at 129-30.

30 Id. at 123-24, 127.

31 Twentieth Century Fox Film Corp. v. Cablevision Sys. Corp., 478 F. Supp. 2d 607, 621-22 (S.D.N.Y. 2007).

32 Cartoon Network, 2008 U.S. App. LEXIS 16458 at *14-16.

33 Id. at *16, 18.

34 Id. at *22. "The result might be different if only a single second of a much longer work was placed in the buffer in isolation. In such a situation, it might be reasonable to conclude that only a minuscule portion of a work, rather than a work‟ was embodied in the buffer. Here, however, where every second of an entire work is placed, one second at a time, in the buffer, we conclude that the work is embodied in the buffer." Id. at *22-23.

35 Id. at *23.

36Id.

37 Id. at *24.

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