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modifies -- by annotating, editing, translating or otherwise significantly changing -- the contents of a downloaded file creates a derivative work. Derivative works may also be created by transforming a work, such as an audiovisual work, into an interactive work.

c. THE RIGHT TO DISTRIBUTE COPIES

Before addressing issues raised by the distribution right in the context of the NII, it is necessary to understand its application and limitations with respect to conventional modes of exploitation and infringement.

The right to distribute legitimate copies of works is substantially circumscribed by the "first sale" doctrine:

Notwithstanding the provisions of section 106(3),
the owner of a particular copy or phonorecord
lawfully made under this title, or any person
authorized by such owner, is entitled, without the
authority of the copyright owner, to sell or
otherwise dispose of the possession of that copy

or phonorecord. This means that the copyright owner generally has only the right to authorize or prohibit the initial distribution of a particular lawful copy of a copyrighted work.208 It is important to understand, however, that the distribution of an unlawfully made (i.e., infringing) copy will subject any distributor to liability for infringement.

One court decision has construed the unauthorized downloading of digitized photographic images (whose

207

209

208

207

17 U.S.C. S 109(a) (1988). See discussion infra pp. 90-95.

See discussion of rental rights for computer programs and sound recordings infra p. 91. 209

Furthermore, with respect to international distributions, Section 602 of the Copyright Act makes unauthorized importations a violation of the distribution right. See discussion infra pp. 107-09.

reproduction was unauthorized) by BBS subscribers as "implicating" the distribution right.210 The discussion in Playboy Enterprises Inc. v. Frend" reflects the reach of the distribution right with respect to infringing copies:

Public distribution of a copyrighted work is a
right reserved to the copyright owner, and
usurpation of that right constitutes
infringement. [Playboy Enterprise's] right
under 17 U.S.C. $106 to distribute copies to the
public has been implicated by Defendant Frena
(the BBS operator). Section 106(3) grants the
copyright owner "the exclusive right to sell, give
away, rent or lend any material embodiment of
his work." There is no dispute that Defendant
Frena supplied
supplied a product

product containing
unauthorized copies of a copyrighted work. It
does not matter that Defendant Frena claims it

did not make the copies itself.? The court may not have focused on the reproduction right, apparently because of its uncertainty whether the operator of the bulletin board system could itself be held to have reproduced a work that was (a) uploaded by one subscriber213 and (b) downloaded by another. (As discussed below, the BBS operator publicly displayed the works by the same conduct, and was found liable by the court for infringing the display right.)

Whether the litigants in Playboy put the issue properly in dispute or not, the right to distribute copies of a work has

212

210

The court elsewhere in its opinion, in a small but perhaps significant deviation from conventional usage, appears to use "implicate" to mean "infringe" rather than "involve."

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Whether such reproduction was legally performed by the subscriber, the BBS operator, or both is not clear.

traditionally covered the right to convey a possessory interest in a tangible copy of the work. Indeed, the first sale doctrine implements the common law's abhorrence of restraints on alienation of property by providing that the distribution right does not generally prevent owners of lawfully made copies from alienating them in a manner of their own choosing.214 It is clear that a Frena subscriber, at the end of a transaction, possessed a copy of a Playboy photograph, but it is perhaps less clear whether, under the current law, Frena "distributed" that photograph and whether Frena or the subscriber "reproduced" it (and, if the latter, whether current law clearly would have made Frena contributorily liable for the unauthorized reproduction).21

In a similar case, Sega Enterprises Ltd. v. MAPHIA,216 court, on a motion for a preliminary injunction, made findings of fact regarding (a) the use of a bulletin board system to "make and distribute" copies of copyrighted video games, (b) the "unauthorized copying and distribution" of the games on the bulletin board, and (c) the profits made by the defendant from the "distribution" of the games on the bulletin board. The court's conclusions of law held that the reproduction right was infringed but apparently did not reach a like conclusion with respect to the distribution right.

215

a

214

Owners of copyrights in computer programs and sound recordings have the right to control post-first-sale rentals of copies of their works; owners of copyrights in other works do not. See 17 U.S.C. S 109 (1988 & Supp. V 1993). This inconsistency may be important in the NII context, particularly with respect to "multimedia works" that are neither expressly nor self-evidently in any particular category of copyrighted work (and whose treatment under various exemptions and special provisions may thus be unclear). See discussion of multimedia works supra pp. 41-45.

215

See discussion of contributory infringement and vicarious liability infra

pp. 109-14.

216

857 F. Supp. 679 (N.D. Cal. 1994).

d. THE RIGHT TO PERFORM THE WORK

PUBLICLY

The public performance right is available to all types of "performable" works -- literary, musical, dramatic, and choreographic works, pantomimes, motion pictures, and other audiovisual works with the exception of sound recordings.217 While some have urged that many, if not all, NII transactions be characterized as "performances," it is important to understand:

the definition of "perform" in the copyright law,218
that only "public" performances are covered by the
copyright law,219 and
the limitations set out in the statute that render the
performance right inapplicable in a variety of
circumstances (mostly of a nonprofit nature).

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218

219

"To 'perform' a work means to recite, render, play, dance, or act it, either directly or by means of any device or process or, in the case of a motion picture or other audiovisual work, to show its images in any sequence or to make the sounds accompanying it audible." 17 U.S.C. $ 101 (1988) (definition of "perform").

To perform or display a work "publicly" means --
(1) to perform or display it at a place open to the public or at any
place where a substantial number of persons outside of a normal
circle of a family and its social acquaintances is gathered; or
(2) to transmit or otherwise communicate a performance or
display of the work to a place specified by clause (1) or to the
public, by means of any device or process, whether the members
of the public capable of receiving the performance or display
receive it in the same place or in separate places and at the same

time or at different times.
17 U.S.C. S 101 (1988) (definition of "publicly").

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A distinction must be made between transmissions of copies of works and transmissions of performances or displays of works.221 When a copy of a work is transmitted over wires, fiber optics, satellite signals or other modes in digital form so that it may be captured in a user's computer,

, without the capability of simultaneous "rendering" or "showing," it has rather clearly not been performed. Thus, for example, a file comprising the digitized version of a motion picture might be transferred from a copyright owner to an end user via the Internet without the public performance right being implicated. When, however, the motion picture is "rendered" -- by showing its images in sequence -- so that users with the requisite hardware and software might watch it with or without copying the performance, then, under the current law, a "performance" has occurred.

The "public" nature of a performance -- which brings it within the scope of copyright is sufficiently broadly defined to apply to multiple individual viewers who may watch a work being performed in a variety of locations at several different times. Courts have repeatedly imposed public performance infringement liability upon entities that, for example, develop novel modes of delivering motion picture performances to customers and advance novel legal arguments as to why their performances are not "public. Therefore, in the context of the NII, the fact that performances and displays may occur in diverse locations

221

The current law addresses only transmissions of "performances" and "displays."

222

See, e.g., Columbia Pictures Indus. v. Redd Horne, Inc., 749 F.2d 154 (3d Cir. 1984) (video store operator liable for public performance violation where he rented tapes of motion pictures to customers and provided semi-private screening rooms where the tapes could be viewed); Columbia Pictures Indus. v. Aveco, Inc., 800 F.2d 59 (3d Cir. 1986) (same result where customers also rented rooms for viewing); On Command Video Corp.v. Columbia Pictures Indus., 777 F. Supp. 787 (N.D. Cal. 1991) (infringement found where hotel guests in rooms selected tapes to be played on remotely controlled console in hotel basement with signal then sent to rooms).

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