ABSTRACT
This paper describes some recent developments concerning copyright legislation in the U.S.. It first lists some general areas of discussion, then examines selected recent cases which are of particular interest. It concludes with discussion of current legislative changes currently under way.
This paper describes recent developments concerning copyright in the U.S. It first lists a number of hot topics in the field, then examines selected recent cases which are of particular interest. It concludes with discussion of legislative changes under way as of the end of the Spring term, 1997.
RECENT USA DEVELOPMENTS
It is not possible to examine comprehensively all relevant legal developments in the U.S. in a paper of this brevity. A short list of some of the most interesting developments involving copyright would include:
- the recent conclusion of the Conference on Fair Use (CONFU) meetings, in which a number of representatives from the library world, private industry, publishers and users took part, with mixed results;
- the ongoing effort to amend the Uniform Commercial Code (known in the U.S. as the UCC) to provide default contract provisions in the context of licensing (i.e. to define the licensing terms which will rule in the absence of specific contractual provisions);
- state by state jurisdictional decisions as to whether the conduct of business on the World Wide Web allows courts to exercise authority over defendants in various cases;
- the Reno v. ACLU case concerning the Federal Communications Decency Act. The U.S. Supreme Court heard oral argument in that case in March. A number of states have also enacted censorship laws concerning material available over the internet;
- privacy issues and the growing awareness of the dangers of collecting personal data in electronic databases;
- the continuing discussion of the increasing use of licences to distribute electronic content, the enforceability of shrink-wraps and click-wraps, and the issue of contract pre-emption by the federal Copyright statute.
RECENT UNITED STATES CASE LAW AND SETTLEMENTS
A group of news services, including the Washington Post Company and the Cable News Network, banded together to file a complaint against TotalNews, a Website from which users can access the plaintiffs’ news service Websites. Although the case settled last week and thus does not set legal precedent, it nevertheless provides a warning to those who would link to others’ Web sites in a commercial context.
TotalNews operates a Web site [101] which provides links to a variety of news sources including those operated by the plaintiffs. Using frames, TotalNews divides its Web page into four independent windows. A vertical frame on the left-hand side includes the names of eight different news services. Each name acts as a hyperlink to the corresponding news service. In the lower left-hand corner is a small, rectangular frame that contains the TotalNews logo, while the frame along the bottom of the screen is set aside as advertisement space which TotalNews sells to generate revenue. The fourth and largest frame, located in the right-centre part of the screen, is the news window. When a user selects a particular news service by clicking on its hyperlink, the contents of that site are displayed in the centre window. The centre window does not fill the entire computer screen, and thus users see the linked-to news service surrounded by TotalNews’ frames.
The plaintiffs were unhappy that advertisements sold by TotalNews are displayed in the advertisement frame at the same time that the linked-to news service is displayed in the news frame, thereby depriving plaintiffs of revenue from their own banner ads, and also that the TotalNews URL, and not the URL of the actual news source, appears in the address portion of the user’s Web browser. Nine claims were alleged against TotalNews, including misappropriation, copyright and trademark infringement, dilution, false advertising, unfair competition and tortuous interference. The plaintiffs also contended that by using hyperlinks to embed copyrighted material within its news frame, TotalNews was liable for copyright infringement.
Under the settlement, TotalNews may continue to provide links to the plaintiffs’ Web sites, but only in such a way that internet users are taken directly to the plaintiffs’ sites without TotalNews’ frames. (The settlement terms do not apply to companies who were not involved in the lawsuit, such as USA Today, and TotalNews is continuing to "frame" their content.) The terms of the settlement between the parties include the following:
- Defendants agree permanently not to directly or indirectly cause any Plaintiffs’ Website to appear on a user’s computer screen with any material (e.g. Universal Resource Locator (URL), text, graphics, pop-up window, audio, video or other) supplied by or associated with Defendants or any third party, such as an advertiser, acting in privity with Defendants or under Defendants’ direct or indirect control; in particular, Defendants agree permanently to cease the practice of "framing" Plaintiffs’ Websites.
- Plaintiffs agree that Defendants may link from the Totalnews.com Website or any other Website to any Plaintiff’s Website, provided that:
- Defendants may link to Plaintiffs’ Websites only via hyperlinks consisting of the names of the linked sites in plain text, which may be highlighted;
- Defendants may not use on any Website, as hyperlinks or in any other way, any of Plaintiff’s proprietary logos or other distinctive graphics, video or audio material, nor may Defendants otherwise link in any manner reasonably likely to: (i) imply affiliation with, endorsement or sponsorship by any Plaintiff; (ii) cause confusion, mistake or deception; (iii) dilute Plaintiffs’ marks; or (iv) otherwise violate state or federal law;
- Each Plaintiff’s agreement to permit linking by Defendants remains revocable, on 15 business days’ notice, at each Plaintiff’s sole discretion. If Defendants refuse to cease linking upon notice, and any Plaintiff brings an action to enforce its rights, it shall be an affirmative defence that Defendants’ conduct does not otherwise infringe or violate Plaintiff’s rights under any theory of any intellectual property, unfair competition or other law.
- Nothing in the stipulation restricts Defendants from linking to any Website page that (a) does not include any of a Plaintiff’s proprietary content and (b) is part of any Website not owned or operated by a Plaintiff, provided that Defendants may not link to any page of any Website in any way that purposefully or overtly encourages users, once at a non-Plaintiff’s site, to link to any Plaintiff’s Website. As an illustrative example, it would be a violation of this paragraph for Defendants to state on their Website that a Plaintiff’s Website could be reached with two clicks – the first click taking the user to a third-party Website, and the second click taking the user, via a hyperlink supplied by the third party, to a Plaintiff’s Website that would then be seen through Defendants’ frame. As a second illustrative example, it would not be a violation of this stipulation if Defendants simply provided a hypertext link, using frames technology, to a Website page other than a Plaintiff’s Website, from which the user on her own is able to, and does, link to a Plaintiff’s Website in a manner permitted by law.
Since the case has now settled we can only speculate as to how well plaintiffs’ arguments and TotalNews’ defences would have stood up in court. Direct copyright infringement may have been difficult to prove given the fact that TotalNews did not copy the copyrighted information contained in plaintiffs’ news services, but rather the user downloads a copy of the information by browsing. TotalNews assists the user by supplying hyperlinks to the news services, however contributory infringement may also have been difficult, because such a finding also requires a determination of copyright infringement. It may have been possible, however, for the court to find infringement of the copyright owners’ exclusive right to produce derivative works. Unlike violations of the reproduction right, the right to prepare derivative works is infringed even if no unlawful copy of the material is made. Thus, the right may be deemed violated if a legally owned copy of the copyrighted work is merely altered, modified or presented to the public in a distorted form.
Nor can one be certain how well any possible defences may have worked for TotalNews, or for similarly situated defendants in future cases. Fair use may have been unlikely to succeed to the extent TotalNews’ use of the news services is plainly commercial: the company generates revenue by selling advertisement space on its Web page. On the other hand, the impact of TotalNews’ use of the plaintiffs’ material on the market for the original works may have been difficult to assess in the Web context, as advertising on the Web is a recent and still relatively experimental phenomenon. If the case had gone to trial plaintiffs may have needed to offer proof that the defendants adversely impacted plaintiffs’ advertising market. TotalNews could have also argued an implied license, that is, that by posting copyrighted information on the Web without including any express-use limitations, plaintiffs should anticipate that others will use established programming techniques, such as hyperlinks and frames, to access the material. However, plaintiffs could argue that no such implied license extends to sites that are in direct competition for advertising revenues. By selling advertisement space in the frame immediately adjacent to the displayed news services, TotalNews may have diluted plaintiffs’ goodwill with their own advertisers and hurt plaintiffs’ ability to maximise the revenues generated from their copyrighted news services.
Again, such speculation as to the merits of defences in the context of the Web remain academic. For the moment, anyone providing a commercial service on the Web, particularly when revenue is generated by the sale of advertising displayed on the site, should consider the TotalNews settlement a warning as to what other content providers will be willing to abide. Decisions by U.S. courts in this area of the law, whether they side with Web surfers or content owners, will be closely watched.
Ticketmaster Corp. v. Microsoft Corporation [102]
In another suit with implications for the ubiquitous practice of linking among sites on the Web, Ticketmaster claims that Microsoft wrongfully appropriated and misused Ticketmaster’s name and trademarks by including unauthorised links into Ticketmaster’s Web site from Microsoft’s Seattle Sidewalk site.
Ticketmaster’s Web site [103] offers tickets to more than 25,000 events throughout the U.S.
The Seattle Sidewalk site [104] is one of several city guides published on the Web by Microsoft. According to Ticketmaster, negotiations to permit Microsoft to profit from linking to the Ticketmaster site failed, but Microsoft went ahead and linked anyway, "feathering its own nest at Ticketmaster’s expense," and committing "electronic piracy." Ticketmaster contends that, "[i]n this narrow corner of cyberspace, [it] must maintain control of the manner in which others utilise and profit from its proprietary services, or face the prospect of a feeding frenzy diluting its content."
One feature of the practice that Ticketmaster finds objectionable is that Microsoft chose to link to an internal page within the Ticketmaster site below the Ticketmaster home page, thereby bypassing the advertising that Ticketmaster has sold showing links to Ticketmaster’s corporate partners. Ticketmaster has claimed that Microsoft is building its Sidewalk business at least partly on the ability to link to Ticketmaster’s content, and that Microsoft should share advertising revenues from its pages that describe Ticketmaster’s ticketing service and locations.
If this case is decided in favour of Microsoft it will certainly have implications for the conventional Web wisdom that one who publishes a site on the Web makes that site freely available for linking.
Matthew Bender & Co. v. West Publishing Co. [105]
Plaintiff in this suit, Hyperlaw, Inc., publishes CD-ROMs containing Supreme Court and Court of Appeals decisions, and sought a determination of the extent of West’s copyrightable interest in the decisions as published in West’s court reporters. In a victory for those wishing to make use of public domain materials, the court held that minor changes added to published court decisions did not render West’s version of those decisions copyrightable.
The dispute stemmed from the fact that when Hyperlaw copies public domain judicial opinions from West’s reporters, it also scans in changes and additions that West has made to factual aspects of the case, including the title (capitalisations and abbreviations), file lines (the history and date of the case), names of the attorneys, citation corrections, and certain other information. Hyperlaw does not, however, scan the headnotes that West creates for each case it publishes, or the key numbers it inserts in the opinions.
West argued that its changes to the reported decisions make them "independently copyrightable." The court disagreed, noting that, "[i]f one looks at each opinion as a whole then it seems clear that the changes made by West are trivial indeed. Minor changes to the caption, the identification of judges and information as to the attorneys, together with the insertion of subsequent history, are not sufficient to qualify West’s reprints as ‘original works of authorship.’" As a result, the court found that West held no copyrightable interest in the parts of the opinion Hyperlaw copies, and that Hyperlaw was entitled to a declaratory judgement that it could copy the text of the opinions found in West reporters.
National Basketball Association v. Motorola, Inc. [106]
This interesting case implicated pre-emption of state law by the Copyright Act and the copyrightability of
factual sports scores. Motorola, Inc. and co-defendant Stats, Inc., provided a service which permitted subscribers
to obtain real-time sports scores and other information from a handheld pager or through AOL. The NBA sued,
claiming, inter alia, copyright infringement and misappropriation under New York law. In 1996, the
lower court had issued a permanent injunction against Motorola, finding that it had misappropriated NBA
property by disseminating real-time information about games in progress [107].
Motorola appealed, alleging that the NBA’s claim of misappropriation was pre-empted by
federal copyright law. The Second Circuit held that where the challenged action related in part to the
copyrighted broadcast of the games, the subject matter requirement for pre-emption was met with respect
to both the broadcast and the underlying games. Thus, as there is no cause of action for copying
facts [108], the pre-emption doctrine
precluded a finding of liability under state law.
The Second Circuit did find that under some circumstances a claim of misappropriation under a "hot
news" exception may survive. This doctrine is based upon unfair competition, and dates back to the days w
hen East coast newspapers would wire the content of competitors’ stories to the West coast of the U.S.
for their early edition [109]. The elements of a hot news claim are:
- the plaintiff collects information at some cost or expense;
- the value of the information is time sensitive;
- the defendant’s use of the information constitutes free-riding on plaintiff’s costly efforts to generate or collect it;
- the defendant’s use of the information is in direct competition with a product or service offered by the plaintiff; and
- the ability of other parties to free-ride on the efforts of plaintiff would so reduce the incentive to produce the product or service that its existence or quality would be threatened.
In this case, the court found the information time sensitive, but determined that the NBA had failed to show that Motorola’s products had any competitive effect on the NBA’s primary business – producing basketball games for live attendance and licensing live broadcasts of those games (the pagers were not a substitute for attending NBA games or watching or listening to licensed broadcasts). In addition, Motorola and Stats expended their own resources to collect and disseminate the factual information, since Stats staff monitored the games and entered changes in the score and other factual information into its computers.
Expert Pages v. LawInfo.com [110]
In a suit claiming copyright infringement, unfair trade practices, breach of contract and misappropriation, Expert Pages has won a temporary restraining order against a service that allegedly copied its on-line directory of experts, expert witnesses and consultants.
Expert Pages offers a free Web-based service to those seeking to identify and retain expert witnesses and
consultants [111]. Experts pay a small fee to be listed on the site and may also include links to their own Web sites.
Expert Pages alleges that a competitor, LawInfo.com, made multiple unauthorised copies of the Expert Pages site, and used the information contained therein to send unsolicited e-mail ads to the experts listed in the Expert Pages database. The e-mails allegedly encouraged the experts listed on the site to consider listing with LawInfo.com. Expert Pages also alleges that LawInfo.com’s e-mails contained false allegations, including that it had learned of the experts independently of the Expert Pages site. Finally, Expert Pages claimed that LawInfo.com falsely claimed to be associated with the San Francisco and Chicago bar associations. In addition, Expert Pages’ breach of contract claim arises out of the terms and conditions of use posted on the Expert Pages site.
If Expert Pages is able to prove that LawInfo copied Expert Pages’ information, this case will offer another application of existing intellectual property law to cyberspace. "Free" on the Web does not always mean that information can be "freely" copied.
Warren Publishing v. Microdos Data Corp.
The 11th Circuit has finally handed down a decision in favour of the defendants in this case [112].
This sets another important precedent in keeping with the U.S. approach to database protection, i.e. that facts are themselves not copyrightable and that the effort of compiling facts into a database does not thereby render the facts themselves protectable.
This case had a somewhat tortured history. The district court initially ruled in favour of the plaintiffs, and the 11th Circuit Court of Appeals had affirmed. However, in October 1995 the Circuit Court vacated their decision and agreed to rehear en banc. There has therefore been a wait of one and a half years for a decision from the en banc Court. The ruling was 9 to 3, with a 30-page opinion and a 25-page dissent. The plaintiffs are considering seeking cert from the Supreme Court.
US LEGISLATIVE UPDATES
World Intellectual Property Organization
The following update on the U.S. implementation of the World Intellectual Property Organization (WIPO)
treaties is reprinted with permission from the Web site of the Association of American Publishers (AAP) [113].
Draft legislation to implement the two international copyright conventions adopted by WIPO last winter is working its way through the Commerce Department in the first stages of a clearance process that will also involve the State Department and the Office of Management and Budget. At the conclusion of the process, which is expected to last another 3 - 4 weeks, the Administration will send its proposed treaty ratification and implementation package to Capitol Hill. The draft contains language negotiated by the copyright industries and the computer hardware and software communities to prohibit circumvention of copyright protection technologies. After meeting with AAP and other copyright industry representatives, the Commissioner of Patents and Trademarks agreed to send the proposed anti-circumvention language into the review process without adding a "fair use" exception sought by a coalition of consumer electronics manufacturers and library and education groups.
Intellectual Property Antitrust Protection Act of 1997 Introduced
With eight co-sponsors, Rep. Hyde, (chair, Judiciary Committee, R-IL) has introduced H.R. 401, the Intellectual Property Antitrust Protection Act of 1997. Provisions in the bill seek to modify U.S. antitrust laws to encourage the licensing and other uses of certain intellectual property. According to the language of the bill, "in any action in which the conduct of an owner, licensor, licensee, or other holder of an intellectual property right is alleged to be in violation of the antitrust laws in connection with the marketing or distribution of a product or service protected by such a right, such right shall not be presumed to define a market, to establish market power (including economic power and product uniqueness or distinctiveness), or to establish monopoly power." There has been no congressional action on this bill since it was referred to the House Committee on the Judiciary in January.
Copyright Term Extension Bill Reintroduced
Rep. Gallegly (R-CA) with nine co-sponsors, introduced the Copyright Term Extension Act of 1997, H.R. 604, on February 5, 1997. Similar to legislation before the House and Senate last year, this bill seeks to extend the term of ownership of a copyrighted work from the life of the author plus 50 years to the life of the author plus 70 years, and would provide U.S. copyright holders the same length of protection given to copyright holders in the European Union.
H.R. 604 includes an exemption (under certain circumstances) for libraries and archives during the last 20 years of any term of copyright. The library exemption seeks to address the concerns of libraries and archives that the extension of copyright term by an additional 20 years would place new burdens on libraries and archives. This language is based on the discussions in 1996 between members of the Shared Legal Capability (SLC) and members of the proprietary community that were facilitated by the Register of Copyrights. Members of the SLC are evaluating the proposed exemption for libraries and archives. It is anticipated that the Senate will introduce companion legislation shortly.
[99] This account was prepared for this report by The Marc Fresko Consultancy. It is an edited version of a paper supplied by the speaker.
[100] Washington Post Company v. TotalNews Inc., 97 Civ. 1190 (SDNY).
[101] URL: http:// www.totalnews.com/
[102] No. 97-3055 (C.D. Cal., complaint filed April 28, 1997).
[103] URL: http:// www.ticketmaster.com/
[104] URL: http:// www.seattle.sidewalk.com/
[105] 42 U.S.P.Q. 2d 1930 (S.D.N.Y. 1997).
[106] 105 F.3d 841 (2d Cir. 1997).
[107] 939 F. Supp . 1071 (S.D.N.Y. 1996).
[108] Feist Publications, Inc. v. Rural Tel. Service Co., 499 U.S. 340 (1991).
[109] Int'l News Serv. v. Assoc. Press, 248 U.S. 215 (1918).
[110] Civil Action No. 97-1302 (N.D. Ca., complaint filed April 11, 1997).
[111] URL http:// www.expertpages.com/
[112] 115 F.3d 1509 (11th Cir . 1997).
[113] URL http://www.publishers.org/
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