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equipment" used in the manufacture of the infringing copies.

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a

A recent court decision demonstrates that the current law is insufficient to prevent flagrant copyright violations in the NII context. In United States v. LaMacchia,410 university student provided clandestine BBS locations on the Internet for the receipt and distribution of unauthorized copies of commercially published, copyrighted software. Because he sought no profit from his actions -- actions that caused substantial economic harm to copyright owners -- he could not be charged under the current criminal provisions of the copyright law, and the court dismissed an indictment charging him with wire fraud, on the ground that his acts did not violate the wire fraud statute. (There would appear, nevertheless, to be every reason to believe that he had committed many civil infringements.)

The Copyright Act also makes certain noninfringements criminal acts, including:

411

the placement, with fraudulent intent, of a copyright notice that a person knows to be false on

any article: 412

the public distribution or importation for public distribution, with fraudulent intent, of

any

article containing a copyright notice the distributor or importer knows to be false;413

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411

The indictment alleged that the resultant loss of revenue to the copyright owners was in excess of $1,000,000 over a period of approximately six weeks.

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17 U.S.C. S 506(c) (1988). The penalties in Section 506(c) apply with regard to copyright notices or "words of the same purport." Id.

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the removal or alteration, with fraudulent intent, of
any notice of copyright on a copy of a copyrighted
work;414 and
false representation, with knowledge, of a material
fact in an application for copyright registration or
in any written statement filed in connection with
an application.

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g. DEFENSES

The Supreme Court has stated that "[a] successful defense of a copyright infringement action may further the policies of the Copyright Act every bit as much as a successful prosecution of an infringement claim by the holder of the copyright."416 There are a number of legal and equitable defenses available to defendants in copyright infringement actions. Fair use is the most common of the defenses. 417

Others include misuse of copyright by the copyright owner,

418 abandonment of copyright, estoppel, collateral estoppel, laches, res judicata, acquiescence, and unclean hands.

Generally, a claim of innocent infringement is not a defense against a finding of infringement. An innocent infringer is liable for the infringement, but a court may reduce or, in some instances, remit altogether the

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418

See F.E.L. Publications, Ltd. v. Catholic Bishop of Chicago, 754 F.2d 216, 220-22 (7th Cir. 1985); but see Columbia Pictures Indus. v. Redd Horne, Inc., 749 F.2d 154, 161-62 (3d Cir. 1984).

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See Pacific & Southern Co., Inc. v. Duncan, 572 F. Supp. 1186 (N.D. Ga. 1983), affd, 744 F.2d 1490 (11th Cir. 1984).

amount of damages.420 However, under certain, specified circumstances, a good faith reliance on a presumption that the term of protection had expired is a complete defense to an infringement action.

As noted earlier, certain uses do not rise to the level of infringement, such as reproduction of a de minimis portion of a work.22 In those cases, the plaintiff will not be able to sustain its burden of proof and no defense will be necessary. 123

In other cases, a defendant may successfully assert that the activity is noninfringing due to the existence of a license -- statutory, negotiated or implied. 124

420

See 17 U.S.C. S 504(c)(2) (1988); see also supra pp. 125-26. If a proper copyright notice was affixed to the published copy to which the infringer had access,

the court may not give any weight to a claim of innocent infringement in mitigation of damages, except in limited circumstances involving certain infringers (including nonprofit educational institutions and libraries) who violated certain exclusive rights and who believed, and had reasonable grounds for believing that the use was a fair use. See SS 401(d), 504(c)(2) (1988); see also 17 U.S.C. S 405(b) (1988) (effect on innocent infringers of omission of copyright notice on copies publicly distributed before March 1, 1989).

See 17 U.S.C. S 302(e) (1988) (after a period of 75 years from first publication of a work, or 100 years from its creation, whichever is shorter, a person who obtains from the Copyright Office a certified report that the records relating to the deaths of authors disclose nothing to indicate that the author is living, or died less than 50 years before, may presume that the author has been dead for at least 50 years, and good faith reliance on that presumption is a complete defense).

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422

See generally discussion of infringement supra pp. 100-07. 423

Further, no action will lie if the statute of limitations has run. See 17 U.S.C. S 507 (1988).

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A nonexclusive license may be implied from conduct. See Effects Assocs., Inc. v. Cohen, 908 F.2d 555, 558 (9th Cir. 1990), cert. denied, 498 U.S. 1103 (1991); MacLean Assocs., Inc. v. Wm. M. Mercer-Meidinger-Hansen, Inc., 952 F.2d 769, 779 (3d Cir. 1991); see also 3 NIMMER ON COPYRIGHT S 10.03(A) at 10-38 (1994). Implied licenses, like oral licenses, are always nonexclusive in nature and may be limited in scope. See Oddo v. Ries, 743 F.2d 630, 634 (9th Cir. 1984); Gilliam v. American Broadcasting Cos., 538 F.2d 14, 19-21 (2d Cir. 1976). Delivery of a copy of a work by the copyright owner to the moderator of a newsgroup may imply a license to reproduce and distribute copies of the work to the subscribers of that newsgroup, but may not be evidence of an implied license to reproduce and distribute copies to other newsgroups.

All of these defenses are available in the NII environment. For instance, one or more of these defenses, such as fair use or the existence of an implied license, may be successful where a copyright owner's posting to an automatic electronic mail distribution list ("listserv") is reproduced and distributed to the subscribers of that same listserv in connection with a response to or comment on the posting.

9. INTERNATIONAL IMPLICATIONS

a. BACKGROUND

Other countries including Australia, Canada, Finland, France, Germany, Japan, Singapore, Sweden, the United Kingdom and the European Union are conducting their own studies on their planning for implementation of their national information infrastructures. At the February 1995 G-7 Ministerial Meeting on the Global Information Infrastructure (GII), the Ministers noted that unless rules for the effective protection of intellectual property are taken into account from the outset, the development of the international information superhighway will be severely hindered. How disparate domestic information infrastructures will evolve into a GII will depend on the rules of the road, and one of the most important sets of rules will be those ensuring protection for the works of intellectual

property that move through international channels and into the emerging national information infrastructures. As a result, Ministers endorsed the need to work in international fora, including the World Intellectual Property Organization (WIPO), to achieve standards for the adequate and effective protection of intellectual property in international electronic commerce.

Development of the GII will make copyright laws and international copyright rules a concern for every user. When the globe is blanketed with digital information dissemination systems, a user in one country will be able to manipulate information resources in another country in

ways that

may violate that country's copyright laws. Indeed, it

may be difficult to determine where and when possible infringements may take place because, under the

present level of development, a user in France can access a database in the United States and have a copy downloaded to a computer in Sweden. Whose copyright law would apply to such a transaction? Because copyright laws are territorial, and the standards of protection embodied in the international conventions leave room for national legislative determinations, acts that may constitute infringement in one country may not be an infringement in another country. The complexity that such a system creates will make electronic commerce" over the information superhighways difficult unless the United States moves promptly to identify needs for protection and initiates efforts to work toward a new level of international copyright harmonization.

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U.S. copyright industries are significant contributors to the United States' current trade accounts, reducing our balance of payments deficit by some $45.8 billion in 1993. Inadequacies in the present system of intellectual property protection for copyrights and neighboring or related rights, and the consequent losses to these industries from piracy and from trade barriers arising from differences in forms of protection, have been estimated by industry to cost them $15 to 17 billion annually. Improved protection for copyrights and neighboring rights would contribute to reducing these losses and improving the balance of payments.

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An important aspect of the participation of foreign entities through a GII in the U.S. domestic information infrastructure is the provision of adequate and effective intellectual property protection in the country wishing to

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"Neighboring rights" are discussed infra p. 134.

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See S. Siwek & H. Furchtgott-Roth, International Intellectual Property Alliance, Copyright Industries in the U.S. Economy (1995).

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