361 Supreme Court in Sony Corp. v. Universal City Studios, Inc., a 5 to 4 decision, held that the manufacturer of videocassette recorders was not a contributory infringer for providing the equipment used in the unauthorized reproduction of copyrighted works. Borrowing a patent law principle, the Court reasoned that manufacturers of staple articles of commerce that are capable of substantial noninfringing uses should not be held liable as contributory infringers. The Court held: 362 [T]he sale of copying equipment, like the sale of 363 The Court determined that the key question was whether the videocassette recorder was "capable of 363 Id. at 440. Id. at 442. The Court cited two principles of patent law, but used only one as the appropriate analogy for copyright law: The Copyright Act does not expressly render anyone liable for Id. at 434-35. Section 271(b) of the Patent Act provides, "Whoever actively induces infringement of a patent shall be liable as an infringer." 35 U.S.C. § 271(b) (1988). Section 271(c) provides, "Whoever sells a component of a patented machine, manufacture, combination or composition, or a material or apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use, shall be liable as a contributory infringer." 35 U.S.C. § 271(c) (1988). commercially significant noninfringing uses. 364 The Court also held that in an action for contributory infringement against a manufacturer of copying devices, "the copyright holder may not prevail unless the relief that he seeks affects only his programs, or unless he speaks for virtually all copyright holders with an interest in the outcome. 11365 Other cases against producers or providers of the instrumentalities of infringement since Sony generally have not been successful.366 However, the court in the recent 364 Sony, supra note 361, at 442. "In order to resolve that question, we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement. Rather, we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing." Id. The Court declined to "give precise content" to the issue of how much use is needed to rise to the level of "commercially significant." See id. The four dissenting Justices did not agree that the patent "staple article of commerce" doctrine of contributory infringement was applicable to copyright law. See Sony, supra note 361, at 490-91 n.41 (Blackmun, J., dissenting) ("[t]he doctrine of contributory patent infringement has been the subject of attention by the courts and by Congress... and has been codified since 1952, ... but was never mentioned during the copyright law revision process as having any relevance to contributory copyright infringement"); see also id. at 491 (disagreeing that "this technical judge-made doctrine of patent law, based in part on considerations irrelevant to the field of copyright... should be imported wholesale into copyright law. Despite their common constitutional source, .. patent and copyright protections have not developed in a parallel fashion, and this Court in copyright cases in the past has borrowed patent concepts only sparingly.") Recognizing the "concerns underlying the 'staple article of commerce' doctrine," the dissent concluded that "if a significant portion of the product's use is noninfringing, the manufacturers and sellers cannot be held contributorily liable for the product's infringing uses." See id. at 491 (Blackmun, J., dissenting). 365 366 Id. at 446. See, e.g., Vault Corp. v. Quaid Software Ltd., 847 F.2d 255 (5th Cir. 1988) (seller of computer programs that defeat anti-copying protection is not liable as contributory infringer because programs can be used to enable user to make legal archival copies of copyrighted computer programs under Section 117, which the court found to be a substantial noninfringing use). But see RCA Records v. All-Fast Systems, Inc., 594 F. Supp. 335 (S.D.N.Y. 1984) (operator is liable for contributory infringement based on its provision of sound recording facilities where public could make unauthorized phonorecords). 368 Sega case 367 issued a preliminary injunction against a BBS operator who sold special copiers, the "only substantial use" of which was to copy Sega's copyrighted video games. The court found that Sega established a prima facie case of contributory infringement by the BBS operator based on the operator's "advertising, sale and distribution" of the video game copiers." 369 d. ON-LINE SERVICE PROVIDER LIABILITY There is a view that on-line service providers, such as bulletin board operators, should be exempt from liability or given a higher standard for liability, such as imposing liability only in those cases where infringement was willful and repeated or where it was proven that the service provider had both "actual knowledge" of the infringing activity and the "ability and authority" to terminate such activity. The latter proposed standard would combine the contributory infringement standard with the requirements for vicarious liability and apply it to all infringements (including direct infringements) of the service provider. Altering the standards of liability for infringement would be a significant departure from current copyright principles and law and would result in a substantial derogation of the rights of copyright owners. It is a difficult issue, with colorable arguments on each side.370 367 368 369 Sega Enterprises Ltd. v. MAPHIA, 857 F. Supp. 679 (N.D. Cal. 1994). See id. at 687. The court found that there was "no need to make archival copies of [Sega's] ROM game cartridges" because the "ROM cartridge format is not susceptible to breakdown" and Sega would replace defective cartridges. See id. at 685. The court also found that it was unlikely that customers would buy the copiers, at a cost of $350, for the purpose of backing up Sega's video game programs, which sold for $30 to $70 each. Id. at 685. 370 For detailed analyses of arguments on both sides of this liability issue, see I. Trotter Hardy, The Proper Legal Regime for "Cyberspace," 55 U. PITT. L. REV. 993 (1994). 371 Copyright law imposes different standards of liability for direct, contributory and vicarious liability. Direct infringers are held to a standard of strict liability. Liability for direct infringement is, therefore, generally determined without regard to the intent of the infringer."" However, the Copyright Act gives courts the discretion to consider the innocent intent of the infringer in determining the amount of damages to be awarded.372 Related infringers those found to be contributory infringers or vicariously liable -- are not held to strict liability, but rather to a higher threshold for liability.373 Arguments made by service providers wishing exemption or a higher standard for liability include: that the volume of material on a service provider's system is too large to monitor or screen; that even if a service provider is 371 - This differs from other bodies of law with which service providers, as well as broadcasters, newspaper publishers and others, come in contact. Defamation, for example, has a knowledge requirement for liability. This standard is the same whether in a conventional or NII environment. In Auvil v. CBS "60 Minutes," 800 F. Supp. 928 (E.D. Wash. 1992), the court held that a network affiliate which exercised no editorial control over the network broadcast (although it had the power to do so) served only as a conduit and was not liable for republishing defamatory statements. The court borrowed reasoning from book seller cases "one who only delivers or transmits defamatory material published by a third person is subject to liability if, but only if, he knows or had reason to know of its defamatory character" finding "no logical basis for imposing a duty of censorship on the visual media which does not likewise attach to the print chain of distribution." The court also found that the injured parties were not impaired by limiting conduit liability to those situations where culpability is established; "[t]he generating source, which in a national broadcast will generally be the deepest of the deep pockets, may still be called upon to defend." A similar result was reached in Cubby, Inc. v. CompuServe Inc., 776 F. Supp. 135 (S.D.N.Y. 1991), where the court held that libelous material uploaded to a bulletin board system by a subscriber did not subject the BBS operator to damages for libel. The court determined that a BBS was a "distributor" (akin to a public library or bookstore) rather than a "republisher," and thus the operator was liable only if it "knew or had reason to know of the allegedly defamatory . . . statements" that had been uploaded. 372 See discussion of innocent infringement infra p. 125. 373 See discussion of contributory infringement and vicarious liability supra pp. 109-14. willing and able to monitor the material on its system, it cannot always identify infringing material; that failure to shield on-line service providers will impair communication and availability of information; that exposure to liability for infringement will drive service providers out of business, causing the NII to fail; and that the law should impose liability only on those who assume responsibility for the activities their subscribers (and, presumably, they) engage in on their system. It is estimated by some that trillions of bits representing millions of messages and files travel through networks each day. Of course, only a percentage of those appear on any given service provider's system. Nevertheless, it is still virtually impossible for operators of large systems to contemporaneously review every message transmitted or file uploaded. On-line service providers are not alone in this position. Millions of photographs are taken to photo finishers each day by individual consumers. It is virtually impossible for these service providers to view any of those works before they are reproduced from the undeveloped film. Yet, they operate under strict liability standards.374 Likewise, book sellers, record stores, newsstands and computer software retailers cannot possibly read all the books, listen to all the records, review all the newspapers and magazines or analyze all the computer programs that pass through their establishments for possible infringements. Yet, they may be held strictly liable as distributors if the works or copies they deal in are infringing. Further, while it may be argued that a bit is a bit and infringing bits are indistinguishable from authorized ones, and that discovery of infringing material may be made more difficult if the title or other identifying information is removed or altered, on-line service providers can certainly investigate and take appropriate action when notified of the 374 See Olan Mills, Inc. v. Linn Photo Co., 23 F.3d 1345 (8th Cir. 1994). |