Having a corporate site on the World Wide Web has become an establishedbusiness practice. In spite of its relatively short history, the web is beingrecognised as a shop-window that allows companies to publicise theirachievements and goals on a global basis. For businesses engaged in electroniccommerce activities, their web site is a necessary virtual branch. Given theever expanding use of the Internet for commercial purposes, the web site islikely to become an important source of revenue.
Companies presenting themselves to the world through a web site need toconsider their legal responsibilities in this context. As mentioned in the pagesof this publication on a number of occasions, the Internet, far from beingunregulated, is subject to a vast array of laws and regulations. Underpre-convergence patterns, the applicable laws and regulations would have beenconfined to more static scenarios. In cyberspace, however, defamation law is nolonger an exclusively media-related aspect, data protection does not only applyto stand-alone computers and the scope of copyright goes far beyond print.
This article looks at the issue of liability for copyright infringement as aresult of the operation of a commercial web site. As far as the law isconcerned, the owner of the copyright in a work has the exclusive right to makecopies of that work and issue them to the public. This principle, which isclearly incorporated into English law by the Copyright, Designs and Patents Act1988 (see pg16), applies equally to the use of the Internet under the statutoryregimes of most countries.
Focusing on the digital world, the CDPA states that copying includes storinga work in any medium by ‘electronic means’. The CDPA also deals with thesituation where copies of a copyright protected work are uploaded to a web sitewith the obvious intention of showing them to the public. Therefore, if a website features a literary, musical or artistic work without the authorisation ofthe owner, such web site is likely to be in breach of copyright law and, as aresult, those responsible for the site might be liable for copyrightinfringement.
The NET Act
Online copyright infringement has hardly been tested in the UK. A widelypublicised case involving an Internet-based news service that used headlines ofThe Shetlands Times on its web site without the permission of the newspaperpublisher was settled out of court days before a full hearing was due. Thesettlement prevented the Scottish Court of Session from establishing a precedent(which, no doubt, would have had persuasive effect in English courts) that wouldhave confirmed the application of copyright law to Internet activities.
However, this type of scenario is specifically addressed in US law by astatute recently enacted by the American Congress which is likely to affect website owners beyond the US. This would certainly be the case if the US courtswere to take the view adopted by an English court in the Mecklermedia case,where Jacob J,1stated that the English courts had jurisdiction because the harm had beensuffered in the UK, despite the fact that the acts in question had taken placein Germany. The No Electronic Theft Act (the ‘NET Act’)2is aimed at providing copyright protection in the particular context of theInternet. Although the US courts have already taken the initiative in theapplication of existing copyright law to the use of the Internet, the NET Act isthe first explicit statutory recognition of the rights of copyright owners incyberspace.
The NET Act targets online copyright piracy by establishing basic penaltiesincluding imprisonment for up to a year and fines of up to $100,000. Accordingto the NET Act, any person who wilfully infringes copyright by reproducing ordistributing by electronic means phonorecords or other copyrighted works whichhave a total retail value of more than $1,000 during any 180-day period will becriminally liable. More severe penalties of up to $250,000 and 6 years’imprisonment will apply in the event of a second offence involving copies with atotal retail value of $2,500. It is worth noting that the NET Act will catchactivities even if there is no ‘personal profit’ element involved.
When the NET Act was first introduced as a Bill in July of last year, it wasstrongly criticised by many Internet users who saw the expansion of the scope ofcriminal infringement as far too broad. However, commercial organisations andbodies such as the Software Publishers Association lobbied very actively insupport of the Act,3in an attempt to provide greater legal protection for their intellectualproperty available on the Internet. The academic world remains sceptical aboutthe role of this provision, and even institutions like the MassachusettsInstitute of Technology4are wary of the potential liabilities arising from the NET Act.
In addition to statutory provisions, copyright owners will be able to rely ona recent US online copyright case involving the innocent display of clip art ona web site. In Marobie v NAFED,5a federal district court in Illinois held that a US association of fireequipment distributors (NAFED) directly infringed a software company’s rightto reproduce its works by placing images owned by that company on its web site.Marobie was the copyright owner of several works of clip art consisting ofdrawings and graphics designed for the fire service industry. In a practicefollowed by many corporate web sites, NAFED made such works available on itssite in order to liven up its presence on the Internet, allegedly unaware of theorigin of such materials.
When Marobie’s sales fell as a result of the free availability of its clipart on NAFED’s web site, Marobie sued NAFED for copyright infringement.Although NAFED argued in its defence that no copyright notice had been attachedby Marobie to the images in question, the court disregarded the argument withoutdifficulty, since under US law a copyright notice is not required to establishthe legal ownership of a work. This is also the case under English law and thatline of defence would be equally rejected by the English courts.
Similarly to the fair dealing exception which allows limited use of copyrightmaterials without the permission of the owner in the UK, the US law provides fora so-called ‘fair use’ defence. The American exception permits full copiesof a work to be made under certain circumstances, but in the case of commercialweb sites it is difficult to see how this defence could be applied, since theconcept of ‘fair use’ is aimed at not-for-profit purposes. Certainly in theMarobie case, the court noted that the clip art files enhanced the web site andfurthered its commercial purposes. In addition, the court pointed out that theartistic images were not featured in the site for the statutory ‘fair use’purposes of criticism, reporting or research.
The Position of ISPs
The Marobie case also addressed the position of Internet Service Providers(ISPs) that host web sites featuring infringing copies of works. Following theprinciple laid down in RTC v Netcom,6the court in the Marobie case held that the ISP hosting the site only providedthe means to copy, distribute or display the plaintiff’s works, much like theowner of a public copying machine which is used by a third party to copyprotected material. The court went on to say that since the ISP did not actuallyengage in any of the allegedly infringing activities, it could not be heldliable for direct infringement.
However, the liability of an ISP that facilitates an infringing activity,such as the publication of a web site containing unauthorised material, can morereadily be established under the ‘contributory infringement’ doctrine, whichis analagous to the secondary infringement concept in English law. This wasconfirmed by the judge in the Marobie case when he stated that liability forcontributory infringement would be imposed when a defendant (with knowledge ofthe infringing activity) induced, caused or materially contributed to theinfringing conduct of another. The judge also affirmed that such participationneeded to be substantial.
Since the degree to which the ISP monitored, controlled or had the ability tocontrol the site was unclear, a summary judgment on this issue was rejected. Ifthis argument were to be applied to an ISP by an English court, the ISP wouldneed to prove that it had no knowledge or reason to believe that its server waslikely to be used to infringe copyright in order to escape liability (see CDPA,pg26(2)). The American jurisprudence seems to have adopted a rather reasonableview in this area and, as a result, ISPs have been successfully challenged onlywhen, as in RTC v Netcom, the system operator failed to stop the infringingmaterials from being publicly available following notice of the infringement.
Most of the content of this article has a distinctive American flavour.However, the US legislation considered here is an illustrative response to anactivity that is proliferating on a global basis and needs to be regulated.Similarly, the references to US cases are helpful to describe what the UKposition could be in similar circumstances, since the arguments adopted by thejudges are based on traditional intellectual property principles.
Given the potential risk of infringing copyright law through the operation ofa web site, anyone involved in the development of a web site should make surethat all of the materials available are free from any copyright restrictions. Ifa web site is likely to feature regular contributions, that site’s ownershould also ensure that the contributors are aware of the risks and consequencesof online copyright infringement. In the case of ISPs, it is important thatcomplaints from alleged copyright owners are not ignored. In summary, and as arule of thumb, do not publish articles, images or sounds on your web site unlessyou hold the copyright or have the copyright owner’s authorisation to do it.
1.For a comment on the facts of this case see On-Line inPrint, June 1997, p.6. A report of this case is available at http://www.masons.com/library/reports/0997/c10997-4.ht.
2.The NET Act was signed by President Clinton on 16 December1997. The NET Act was sponsored by Representative Goodlatte (R-Virginia), andwas passed in the US House of Representatives on 4 November 97 and in the USSenate on 13 November 97. The full text can be seen at http://www.gseis.ucla.edu/iclp/hr2265.html.
4.See article by Denise Brehm published in MIT Tech Talk on14 January 1998, available on-line at http://web.mit.edu/afs/athena/org/n/newsoffice/tt/1998/jan14/copyright.html.
5.Marobie-FL, Inc. d/b/a Galactic Software v NationalAssociation of Fire Equipment Distributors and Northwest Nexus, Inc. (No 96C2966N.D. III. Nov. 13, 1997), available on-line at http://www.loundy.com/CASES/Marobiev NAFED.html.