COOPERATIVES COPYRIGHT Copyright covers a bundle of intangible rights granted by statute to the author or originator of certain literary or artistic productions, whereby, for a limited p
Trang 1An association or corporation established for the purpose of providing services on a nonprofit basis
to its shareholders or members who own and control it
The nature and functions of cooperatives differ considerably—such as purchasing coop-eratives, consumer coopcoop-eratives, and marketing cooperatives
In the context of agriculture, a farmers’
cooperative refers to an organization of farmers residing in the same locale that is established for their mutual benefit in regard to the cultivation and harvest of their products, the purchase of farm equipment and supplies at the lowest possible cost, and the sale of their products at the maximum possible price
The term cooperative also signifies the ownership of an apartment building by a nonprofit corporation that holds title to it and the property upon which it is situated Stock in the corporation is allotted among the apartment units on the basis of their relative value or size
The right of occupancy to a particular apart-ment is granted to each cooperative member, who purchases the shares assigned to the desired unit The member subsequently receives
a long-term proprietary lease to that unit The rent payable pursuant to the lease is that member’s proportionate share of the expenses the corporation incurs in operating the cooper-ative—such as insurance, taxes, maintenance, management, and debt service The cooperative concept evolved in New York City during the early 1900s as a mode of accommodating the public’s desire for home ownership; it subse-quently expanded to other large urban centers
In order to finance the purchase or construction of the cooperative building, the cooperative places a blanket mortgage on the property, which is pledged to support the given debt Lenders usually are hesitant to accept an individual member’s stock and proprietary lease
as security for a long-term loan The members’
lien (a claim on property to satisfy a debt) on the lease would be subordinate to the blanket mortgage on the property The purchaser of a cooperative apartment usually must have suffi-cient cash available to pay for the stock allotted
to the unit he or she wishes to obtain The initial price of the stock generally does not exceed the amount required for aDOWN PAYMENT
on a single-family residence As cooperative
members accumulate equity (the value of property exceeding the total debts on it) in their stock, subsequent purchasers must either have a substantial amount of cash available or locate a seller who is willing to recoup the equity in installments over several years Cooperative members are also financially dependent on each other The existence of a single blanket mortgage paid by rent receipts means that if several members default in their rent payments, the corporation might not have sufficient funds to pay a mortgage loan install-ment Foreclosure will ensue in regard to the entire membership unless it acts to satisfy the default Although special reserves and assess-ments are generally employed to cover such a contingency, the available funds might be inadequate to prevent default
COOPERATIVES
COPYRIGHT Copyright covers a bundle of intangible rights granted by statute to the author or originator of certain literary or artistic productions, whereby, for a limited period, the exclusive privilege is given
to that person (or to any party to whom he or she transfers ownership) to make copies of the same for publication and sale
A copyright is a legal device that gives the creator of a literary, artistic, musical, or other creative work the sole right to publish and sell that work Copyright owners have the right to control the reproduction of their work, includ-ing the right to receive payment for that reproduction An author may grant or sell those rights to others, including publishers or record-ing companies Violation of a copyright is called infringement
Copyright is distinct from other forms of creator protection such as patents, which give inventors exclusive rights over use of their inventions, and trademarks, which are legally protected words or symbols or certain other distinguishing features that represent products or services Similarly, whereas a patent protects the application of an idea, and a trademark protects a device that indicates the provider of particular services or goods, copyright protects the expres-sion of an idea Whereas the operative notion in patents is novelty, so that a patent represents
Trang 2some invention that is new and has never been
made before, the basic concept behind copyright
is originality, so that a copyright represents
something that has originated from a particular
author and not from another Copyrights,
patents, and trademarks are all examples of what
is known in the law asINTELLECTUAL PROPERTY
As the media on which artistic and
intellec-tual works are recorded have changed with time,
copyright protection has been extended from the
printing of text to many other means of
recording original expressions Besides books,
stories, periodicals, poems, and other printed
literary works, copyright may protect computer
programs; musical compositions; song lyrics;
dramas; dramatico-musical compositions;
pic-torial, graphic, and sculptural works;
architec-tural works; written directions for pantomimes
and choreographic works; motion pictures and
other audiovisual works; and sound recordings
History of Copyright Law
U.S copyright law grew out of EnglishCOMMON
LAWand statutory law When the printing press
was developed in the fifteenth century, rights for
the reproduction of written works extended to
printers rather than to authors In England, a
printers’ guild, the Stationers’ Company, claimed
for itself the exclusive right—in effect, a
monopoly—on written works It was not until
1710 that Parliament passed a statute relating to
copyright That law, called the Statute of Anne,
established authors’ rights to control the
repro-duction of their work after it was published It
also created a term of protection of 28 years
from the date of publication After that time, an
author’s work entered thePUBLIC DOMAIN,
mean-ing that anyone could print or distribute it
without obtaining the author’s permission or
paying a royalty, or fee, to the author Other
European countries developed similar laws in the
late eighteenth and early nineteenth centuries
Under the British system, the author retained
a common-law right to ownership of his or
her work until publication After publication,
copyright was established as a statutory right,
protected by the Statute of Anne U.S copyright
law retained this distinction between
prepublica-tion common-law rights and postpublicaprepublica-tion
statutory rights, until 1976
By the late eighteenth century, the
protec-tion of intellectual property as a means of
advancing the PUBLIC INTEREST was considered
important enough to receive mention in the U.S Constitution The Patent and Copyright Clause (U.S Const., art I, § 8, cl 8) empowers Congress“[t]to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”
Congress passed its first copyright statute in
1790 and has revised copyright law four times,
in 1831, 1870, 1909, and 1976
Revisions in the copyright law have been driven largely by commercially significant changes in technology In 1802, for example, graphic prints came under copyright protection, establishing the notion that the Constitution’s language regarding copyright not be interpreted
to apply literally to “Writings” alone In 1831 musical compositions were incorporated into copyright protection, and in 1870 paintings, statues, and other works of fine art were placed under copyright protection
The distinction between common-law pro-tection for unpublished works and statutory
Copyright Registration by Subject Matter, 2007 a (in thousands)
SOURCE: U.S Copyright Office, Annual Report of the Register of Copyrights, 2007.
Sound recordings 53.6
Renewals 1.4
Works of the visual artsd 89.3
Monographs b
198.6
Serials 52.6
a
Includes published and unpublished works.
b
Includes traditional books, computer software, and machine readable works.
c
Includes dramatic works, musical works, choreography, pantomimes, motion pictures, and filmstrips.
d Two-dimensional works of fine or graphic art, including prints and art reproductions;
sculptural works; technical drawings and models; photographs; commercial prints and labels; works of applied arts, cartographic works; and multimedia works.
Works of the performing arts c
130.6
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A PART OF CENGAGE LEARNING.
Trang 3FORM TX For a Nondramatic Literary Work
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If published in a periodical or serial give: Volume Number Issue Date On Pages
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For current fees, check the Copyright Office
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NOTE
Under the law,
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(see
instruc-tions) For any
part of this
work that was
"made for hire"
check "Yes" in
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provided, give
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(or other
person for
whom the work
was prepared)
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that part, and
leave the
space for dates
of birth and
death blank.
Was this contribution to the work a AUTHOR'S NATIONALITY OR DOMICILE WAS THIS AUTHOR'S CONTRIBUTION TO
Yes Citizen of Anonymous? Yes No
No Domiciled in Pseudonymous? Yes No
NATURE OF AUTHORSHIP Briefly describe nature of material created by this author in which copyright is claimed
Was this contribution to the work a AUTHOR'S NATIONALITY OR DOMICILE WAS THIS AUTHOR'S CONTRIBUTION TO
Yes Citizen of Anonymous? Yes No
No Domiciled in Pseudonymous? Yes No
NATURE OF AUTHORSHIP Briefly describe nature of material created by this author in which copyright is claimed
Was this contribution to the work a AUTHOR'S NATIONALITY OR DOMICILE WAS THIS AUTHOR'S CONTRIBUTION TO
Yes Citizen of Anonymous? Yes No
No Domiciled in Pseudonymous? Yes No
NATURE OF AUTHORSHIP Briefly describe nature of material created by this author in which copyright is claimed
YEAR IN WHICH CREATION OF THIS DATE AND NATION OF FIRST PUBLICATION OF THIS PARTICULAR WORK WORK WAS COMPLETED
If the answer to either
of these questions is
"Yes," see detailed instructions.
OR{
If the answer to either
of these questions is
"Yes," see detailed instructions.
OR{
OR{
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of these questions is
"Yes," see detailed instructions.
This information must be given
in all cases.
Complete this information Month Day Year
ONLY if this work has been published.
APPLICATION RECEIVED ONE DEPOSIT RECEIVED TWO DEPOSITS RECEIVED FUNDS RECEIVED
COPYRIGHT CLAIMANT(S) Name and address must be given even if the claimant is the same as
the author given in space 2
TRANSFER If the claimant(s) named here in space 4 is (are) different from the author(s) named in
space 2, give a brief statement of how the claimant(s) obtained ownership of the copyright
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a
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3
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MORE ON BACK • Complete all applicable spaces (numbers 5-9) on the reverse side of this page DO NOT WRITE HERE
• See detailed instructions •Sign the form at line 8 Page 1 of pages
[continued]
Trang 4DO NOT WRITE ABOVE THIS LINE IF YOU NEED MORE SPACE, USE A SEPARATE CONTINUATION SHEET.
Copyright Form
5
a
FORM TX
EXAMINED BY CHECKED BY
CORRESPONDENCE
Yes
FOR COPYRIGHT OFFICE USE ONLY
PREVIOUS REGISTRATION Has registration for this work, or for an earlier version of this work, already been made in the Copyright Office?
Yes No If your answer is "Yes" why is another registration being sought? (Check appropriate box.)
a This is the first published edition of a work previously registered in unpublished form.
b This is the first application submitted by this author as copyright claimant.
c This is a changed version of the work, as shown by space 6 on this application.
If your answer is "Yes" give: Previous Registration Number Year of Registration
DERIVATIVE WORK OR COMPILATION
Preexisting Material Identify any preexisting work or works that this work is based on or incorporates
Material Added to This Work Give a brief, general statement of the material that has been added to this work and in which copyright is claimed
DEPOSIT ACCOUNT If the registration fee is to be charged to a Deposit Account established in the Copyright Office, give name and number of Account.
Name Account Number
CORRESPONDENCE Give name and address to which correspondence about this application should be sent Name/Address/Apt/City/State/ZIP
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CERTIFICATION* I, the undersigned, hereby certify that I am the
of the work identified in this application and that the statements made
by me in this application are correct to the best of my knowledge.
Typed or printed name and date If this application gives a date of publication in space 3, do not sign and submit it before that date.
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author
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owner of exclusive right(s)
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Name of author or other copyright claimant, or owner of exclusive right(s)
Check only one {
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will be
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window
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• Complete all necessary spaces
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SEND ALL 3 ELEMENTS
IN THE SAME PACKAGE:
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MAIL TO:
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Washington, D.C 20559-6000
6
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a a a
See instructions before completing this space.
*17 U.S.C § 506(e): Any person who knowingly makes a false representation of a material fact in the application for copyright registration provided for by section 409, or in any written statement filed in connection with the application, shall be fined not more than $2,500.
Rev: June 2002—20,000 Web Rev: June 2002 Printed on recycled paper U.S Government Printing Office: 2000-461-113/20,021
ILLUSTRATION BY GGS CREATIVE RESOURCES REPRODUCED BY PERMISSION OF GALE, A PART OF CENGAGE LEARNING.
Trang 5protection of published works received increas-ing criticism in the twentieth century, particu-larly as the notion of publication changed greatly with technological innovations in com-munication Congress removed this distinction
in the landmark Copyright Act of 1976 (17 U.S
C.A § 102[a]) According to this statute, an author receives copyright protection as soon as
a work is recorded in a concrete way, for example, when it is written on a piece of paper, recorded on an audiotape, or stored on a computer disk Any unauthorized copying of the work is subject to an infringement suit and criminal charges The 1976 act also allows copyright protection of works that derive from the original, such as motion pictures, CD-ROM multimedia editions, and other adaptations
These subsequent creations are known as derivative works
Many features of the 1976 act make U.S
copyright law conform more to INTERNATIONAL
the duration of copyright protection and to the formalities of copyright deposit, registration, and notice These changes have been greatly influ-enced by the most important international copyright treaty, the Berne Convention for the Protection of Literary and Artistic Works (828 U.N.T.S 221, S Treaty Doc No 99-27) In 1988, the United States passed the Berne Convention Implementation Act (102 Stat 2853), which made the nation an official member of the treaty
as of 1989 Section 2(a) of this act holds that provisions of the treaty are not legally binding in the United States without domestic legislation that specifically implements them
U.S copyright law has continued to evolve toward greater conformity with international copyright standards In the 1990s, for example, the Berne Convention added 20 years to the minimum standard for copyright duration, changing it to the length of the author’s life plus 70 years U.S copyright law followed suit
in 1998, with the passage of the Sonny Bono Copyright Term Extension Act
Copyrightable Works
The 1976 Copyright Act provides that copyright protection “subsists … in original works of authorship fixed in any tangible medium of expression, now known or later developed” (17 U.S.C.A § 102(a)) Thus, virtually any form of fixed recording is protected, no matter how new the technology
Originality is the most important quality needed by a work in order for it to receive copyright protection Originality is not depen-dent on the work’s meeting any standard of aesthetic or artistic quality Thus, a work need not be fine art to be copyrightable
Works that Are Not Copyrightable
Copyright protects the expression of an idea or vision, not the idea itself In legal terminology, this concept is called the idea-expression dichot-omy, and it has been an important feature of legal reasoning related to copyright Ideas, procedures, processes, systems, methods of operation, concepts, principles, and discoveries are not within the scope of copyright protec-tion Other works that are not copyrightable are words and short phrases, including slogans; blank forms for recording information (such as bank checks); and works containing no original authorship (such as standard calendars or simple phone listings)
Some works are not copyrightable because they are not fixed in a tangible medium These include unrecorded dance choreography and unrecorded speeches, lectures, and other vocal performances Although typefaces are tangible, they traditionally have been regarded as lying outside copyright protection A dramatic char-acter is not copyrightable
Holders of a Copyright
A copyright is initially owned by the author or authors of the work, except in the case of a
“work for hire.” A work for hire can arise in two situations: (1) where an employee creates a work within the scope of his or her employ-ment, in which case the employer owns the copyright to the work upon its creation; (2) where two parties enter a written agreement designating the creation as a work for hire and the work falls within one of nine specific categories of work designated by copyright law If the work does not fit one of the specified categories, it will not be a work for hire even if the parties have called it one In such a case, the author or authors retain the copyright, and transfer must be accomplished through a written assignment of copyright Where there
is a valid work for hire, the employer who owns the copyright has the same rights as any copyright holder, including the right to initiate
an action for copyright infringement
Trang 6The ownership of a copyright, or the
ownership of any of the five exclusive rights
afforded by a copyright (discussed later in this
entry), can be transferred to another and is
regarded asPERSONAL PROPERTYupon the death of
the copyright holder Copyright ownership and
ownership of the material object in which the
copyrighted work is embodied are two entirely
separate legal entities Furthermore, transfer of
an object and transfer of the copyright to that
object are separate, independent transactions,
neither of which, by itself, has any effect on the other Therefore, transfer of a material object, such as an original manuscript, photograph negative, or master tape recording, does not transfer the copyright to that work Likewise, transfer of the copyright to a work does not require transfer of the original copy of the work
Exclusive Rights
Copyright affords an author a number of exclusive rights: (1) the exclusive right to
Copyright Law in Action: Basic
Books v Kinko’s Graphics Corp.
C
B
opyright cases typically involve disputes
between competing private interests: an
author against someone who has copied the
author’s work without permission However, the
outcome of such cases often has significant
repercussions for the general public as well One
such case with significant public effect was Basic
Books v Kinko’s Graphics Corp., 758 F Supp 1522
(S.D.N.Y 1991), which dealt with the question of
whether photocopy stores may sell copied excerpts
of books to college students without authorization
from the books’ publishers The decision in the case
ultimately affected the price that the public must
pay for access to copyrighted information
Many college and university students purchase
photocopied materials from copy stores in
associa-tion with courses they are taking Usually consisting
of chapters or sections taken from different books
or journals, these photocopied materials enable
students to read from a wide variety of sources
without having to purchase a large number of
books By the late 1980s, book publishers realized
they were losing sales owing to such photocopying
As a result, several publishers, including Basic
Books, Inc., filed a lawsuit in federal court against
one of the largest photocopy firms in the United
States—Kinko’s Graphics Corporation, a company
that in 1989 had more than two hundred locations
and annual sales of $54 million
At issue in the case was the question of who
may profit from the reproduction of an author’s
work, particularly with regard to the practice that
Kinko’s called anthologizing, which is the copying of book excerpts into course“packets” sold to college students The publishers, the plaintiffs in the case, maintained that Kinko’s violated the Copyright Act of
1976 (17 U.S.C.A § 101 et seq.), by failing to secure permission to reprint the excerpts included in course packets and, in turn, pay the necessary fees involved, part of which would be passed on to the authors of the books Kinko’s claimed that its sale of the excerpts was an example of the kind of fair use that is allowed by the Copyright Act
Citing the commercial interests involved—
namely, the fact that Kinko’s made a significant amount of money from the sale of course packets, and that packet sales competed with book sales—
the court found that Kinko’s was guilty of copyright infringement It ordered the company to pay
$500,000 in damages to the publishers and issued
an order forbidding it to prepare anthologies without securing permission from and prepaying fees to the appropriate publishers
Basic Books was a victory for the publishers and authors of books that are excerpted for course anthologies As for Kinko’s, it now has to pay fees to publishers, but it is able to pass on those costs to customers in the form of higher prices Does this mean that students are the losers in this case? In the short run, yes, because they will pay more for their course materials But in the long run, students and the rest of society may derive more benefit, even if it is indirect, from a system that rewards authors for their intellectual labor
Trang 7reproduce, or copy, the work; (2) the exclusive right to prepare new works that derive from the copyrighted work; (3) the exclusive right to distribute the work to the public by sale or other arrangement; (4) the exclusive right to perform the work publicly; and (5) the exclusive right to display the work publicly The first two rights, involving reproduction and derivation, are infringed whether violated in public or in private or whether violated for profit or not
The last three rights are infringed only when violated publicly, that is, before a “substantial number of persons” outside of family and friends (17 U.S.C.A § 101)
All of the exclusive rights afforded by copy-right may have significant economic value For example, derivative works, which may include translations, dramatizations, films, recordings, and abridgments, can offer substantial rewards
to the author An author may sell, license, or transfer one or all of the exclusive rights
Duration of Ownership
Under the original provisions of the Copyright Act of 1976, copyright protection of an authored work extended through the life of the author and to fifty years after the author’s death However, in a major piece of legislation, Congress extended copyright terms in 1998 in the Sonny Bono Copyright Term Extension Act, Pub L No 105-298, 112 Stat 2827 (17 U.S.C.A
§§ 101 et seq.) Title I defines the terms of the copyright extension, while Title II provides a
“music licensing exemption for food service or drinking establishments.” This portion of the law
is also known as the Fairness in Music Licensing Act of 1998
The duration of copyright law under the
1998 act was extended for all copyrighted materials Works created on January 1, 1978,
or after are protected from the time the work was“fixed in a tangible medium of expression.”
The term is for life of the creator plus seventy years If the creator is a corporation, then the term is 95 years from publication or 120 years from the date of creation, whichever is shorter
Works published between 1923 and 1963 are protected, if they were published with notice, for 28 years and can be renewed for 67 years If not renewed, they will fall into the public domain Materials that were published during this period without notice were entered into the public domain upon publication
Items published between 1964 and 1977 are protected if they were published with notice They are protected for 28 years, and the copyright has been automatically extended for
67 years Works created before January 1, 1978, but not published, are protected for the life of the creator plus seventy years or until December 31,
2002, whichever is later Materials created before January 1, 1978, but published between then and December 31, 2002, are protected for the life of the creator plus seventy years or until December
31, 2002, whichever is later
Libraries, archives, museums, and scholars expressed concerns about the 20-year extension Items created in 1923 would have passed into the public domain on January 1, 1999, if the law had not been changed At the beginning of
2000, works created in 1924 would have fallen under the public domain The act’s opponents argued that original scholarly research would be hampered by the extension
In answer to those concerns, a special clause was included in the Copyright Term Extension Act for libraries, archives, and nonprofit educational institutions Such institutions are permitted to“reproduce, distribute, display, or perform in facsimile or digital form” a copy of any copyrighted, published work during the last
20 years of its term “for purposes of preserva-tion, scholarship, or research.” However, the work must not be used in such a manner if it
“can be obtained at a reasonable price.” The changes in the duration of copyrights were made partly to keep pace with the evolution of European copyright laws In
1995, Europe extended its copyright protection
to life of the creator plus 70 years, but in the United States it remained the life of the creator plus 50 years
Copyright Infringement
Copyright infringement involves any violation
of the exclusive rights of the copyright owner It may be unintentional or intentional When unintentional, it is called innocent infringe-ment An example of innocent infringement occurred when former Beatle George Harrison created his song“My Sweet Lord.” Harrison was found to have unconsciously copied the tune of another song,“He’s So Fine,” by the Chiffons and thus was liable for infringement (Bright Tunes Music Corp v Harrisongs Music, 420 F Supp 177[S.D.N.Y 1976]) Vicarious or related
Trang 8infringement refers to those who profit
indi-rectly from the infringement of copyright, as in
the case of a theater owner who profits from
booking a band that illegally performs
copy-righted works
Because evidence of direct copying or
obtain, infringement of copyright is usually
established through CIRCUMSTANTIAL EVIDENCE
Such evidence typically must show a substantial
similarity between the original and the copy, as
well as prove that the copier had access to the
original This means that where two works are
similar or identical, there is nevertheless no
infringement if each work was produced
through the original and independent work of
its creator An infringer is not relieved of
liability by crediting the source or the creator
of the infringed work Although infringement
does not require that even a large portion of the
work be similar, it does require that a
substan-tial part be similar It is irrelevant if the copied
work is an improvement of the original work
The Copyright Act of 1976 recognizes a
copyright not only in a publisher’s collective
work, but also a separate copyright for each
author’s contribution to the work With the
growth in the use of electronic databases and
disks for storing data, some freelance authors
began to object to their articles being sold to
companies that produced these databases and
disks The Supreme Court, in New York Times v
Tasini, 533 U.S 483, 121 S Ct 2381, 150 L Ed
2d 500 (2001), held that the act protects the
copyrights of the writers, rejecting an argument
by the publishers that the CONVERSION of the
original works to an electronic format constituted
a“revision” of the collective work, which would
have been permissible under the Copyright Act
Secondary Liability: Contributory and
Vicarious Infringement
A copyright owner may bring infringement
actions not only against the person actually
engaging in the unauthorized use of an
exclu-sive right held by a copyright owner, but also
against contributory and vicarious infringers The
Copyright Act makes no specific provision for
extending the range of liability in this fashion,
but both contributory and vicarious
infringe-ment have been a part of copyright
increasingly invoked by plaintiffs in
infringe-ment cases, particularly when it would be costly
and complicated to proceed against a host of direct infringers, as is the case with copyright infringement on the INTERNET
The Supreme Court endorsed and applied the law of contributory copyright liability in Sony Corp of America v Universal City Studios, Inc., 464 U.S 417, 104 S Ct 774, 78 L Ed 2d
574 (1984), also known as the Betamax case
manufacturer-distributor of a popular brand of videotape recorder was responsible for contrib-utory infringement, based on the direct in-fringement allegedly committed by home-users
of the video-recorder The Court concluded that even though contributory liability is not mentioned in the Copyright Act, recognition of contributory liability is essential to protecting a copyright owner’s exclusive rights
Contributo-ry liability, the Court said, is akin to such liability in tort cases more generally, which treat
a person who knowingly participates inTORTIOUS
act as jointly and severally liable with the primary TORTFEASOR The Court essentially endorsed the definition contained in an earlier and still frequently cited lower court decision:
“[O]ne who, with knowledge of the infringing activity, induces, causes, or materially contri-butes to the infringing conduct of another, may
be held liable as a contributory infringer.”
Gershwin Publ’g Corp v Columbia Artists Mgmt., Inc., 443 F.2d 1159 (2d Cir 1971)
The Supreme Court cautioned, however, that the manufacturers and sellers of videotape machines could not be liable merely because they had constructive knowledge that their purchasers might use the equipment to make infringing copies Instead, the Court held that selling videotape recorders would not constitute con-tributory infringement “if the product is widely used for legitimate, unobjectionable purposes
Indeed it need merely be capable of substantial noninfringing uses.” Because many copyright owners of television programs do not object to home videotaping, and because even unautho-rized home videotaping, for time-shifting pur-poses, is a fair use, the Court concluded that the Betamax video recorder was capable of substan-tial noninfringing uses Sony’s sale of such equipment to the general public thus did not constitute contributory infringement of copyright owners’ exclusive use, the Court concluded
By contrast, VICARIOUS LIABILITY can be imposed on defendants who wield sufficient authority and influence over a direct copyright
Trang 9infringer, even if the defendants do not themselves induce, cause, or materially contrib-ute to direct infringement For example, in Fonovisa, Inc v Cherry Auction, Inc., 76 F.3d
259 (9th Cir 1996), the plaintiff held copyrights
in Hispanic music recordings and claimed infringement on the part of the operators of a flea market where third-party vendors routinely sold counterfeit recordings The vendors of the counterfeit recordings rented space for their booths from theDEFENDANTCherry Auction, and Cherry Auction advertised, supplied parking, provided refreshments, and retained the right to exclude any vendor for any reason The U.S
Court of Appeals for the Ninth Circuit upheld the secondary-infringement claims, citing four justifications: (1) Cherry Auction had the ability
to control the activities of the direct infringers via its undisputed right to exclude vendors; (2) Cherry Auction reaped “substantial financial benefits” from admission fees, concession stand sales, and parking fees, all of which flowed directly from customers who wanted to buy the counterfeit recordings at bargain basement prices; (3) Cherry Auction provided the “site and facilities” (i.e., space, utilities, parking, advertising, plumbing, and customers) for the infringing activity; and (4) Cherry Auction admitted knowledge of the infringing activity
It was only a matter of time before these principles and precedents were applied to cases involving allegations of secondary infringement
on the part of Website operators who provide file-sharing software that can be used to facilitate the unauthorized exchange of music and video recordings on the Internet The first important decision was made by the U.S Court
of Appeals for the Ninth Circuit in A & M Records, Inc v Napster, Inc., 239 F.3d 1004 (9th Cir 2001) Napster had gained notoriety by inventing and making available its MusicShare software that enabled Internet users to duplicate
or distribute copyrighted songs in mp3 format without paying any fees Almost all of the songs were copyrighted by someone other than Napster, and Napster never asked for or received permission to copy the songs
Howev-er, the songs were stored on centralized Napster servers, and it was only via Napster software that Napster users could download copies of the songs to their own personal computers or distribute copies to other users The ease of the system resulted in the rapid and widespread use of Napster by the public
The ninth circuit concluded that individual Napster users were directly infringing (by duplicating and distributing copyright-protected music and recordings) and were not engaging in fair use and that Napster, Inc was secondarily liable The court found contributory infringement: “Napster has actual knowledge that specific infringing material is available using its system, [Napster] could block access
to the system by suppliers of the infringing material, and [Napster] failed to remove the material.” Napster also provided the “site and facilities” to assist distributing and downloading the recordings, the court stressed As for vicarious infringement, the court said that Napster had the ability to locate infringing material on its search indices and the right to terminate users’ access to the system; it also derived ever-increasing advertising revenues as more users were drawn to its Website through the appeal of free music
Although Napster lost its case, new technol-ogy forced copyright owners back to court Unlike the music-sharing software at issue in Napster, which required users to log-in to Napster servers where the mp3 files were stored, the new music-sharing software enabled users
to share songs directly with each other without the need for assistance from a third-party intermediary Known as peer-to-peer (p2p) software, this software, too, was free The software makers made money by inserting ads inside the software This music-sharing tech-nology was challenged in Metro-Goldwyn-Mayer Studios, Inc v Grokster, Ltd., 125 S Ct 2764,
162 L Ed 2d 781 (U.S 2005)
The defendant software maker attempted to defend its business model by invoking the Betamax decision, arguing that its software was capable of substantial noninfringing uses, for example, the swapping of uncopyrighted mate-rial But the Supreme Court rejected this argument, holding that “one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression
or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.” In the Betamax case, the Court observed, Sony’s sale of its video recorder did not demonstrate that Sony pos-sessed any knowledge of infringing uses by its customers In Grokster, however, the Court continued, not only was the defendant aware
of its customers’ infringing uses, the defendant’s
Trang 10business plan and advertising were explicitly
designed to encourage unlawful private copying,
particularly by those who had been forced to
leave Napster as a result of the adverse judgment
against it in the ninth circuit The Court also
rejected the defendant’s contention that a
finding of secondary liability would significantly
interfere with the development of new electronic
technologies The Court said its holding in
Grokster “premises liability on purposeful,
nothing to compromise legitimate commerce or
discourage innovation having a lawful promise.”
Two years after the Supreme Court issued
its decision in Grokster, the battle front in the
digital age of copyright moved from
copy-righted songs to copycopy-righted videos YouTube
com, the video sharing Website, allows users to
upload and share video clips and view them in
the MPEG-4 format The Website was launched
in 2005, and a year later it was purchased by
Google In 2007 Viacom, an American media
conglomerate, sued YouTube and Google for
copyright infringement, alleging causes of
action for both vicarious and contributory
infringement
Brought in the U.S District Court for the
Southern District of New York, the suit alleged
that the defendants created a library containing
more than 160,000 video clips of copyrighted
Viacom programming (television shows,
mo-tion pictures, and music videos) without
seeking permission or paying any fees before
making the videos available to Website visitors
Viacom demanded that the clips be removed
from the site and sought $1 billion in damages,
or about $1 for each time one of their
copyrighted videos had been viewed
By way of defense, YouTube and Google
argued that they were protected under sections
512(c)–(d) and (i)–(j) of the Digital Millennial
Copyright Act of 1998 (DMCA), which, among
other things, limits the terms of injunctions and
bars copyright-damage awards against online
service providers who meet certain criteria
Those criteria include that the online service
provider (1) perform a qualified storage or search
function for online users; (2) lack actual or
receive no financial benefit directly from such
activity; (4) act promptly to remove or disable
access to infringing activity; (5) adopt and
publicize a policy of terminating repeat offenders;
and (6) accommodate and avoid interference
with standard measures employed by copyright owners to identify or protect their works
Although as of late 2009 the case had not been decided on the merits, the district court had issued some important rulings First, the court denied Viacom’s motion to add a claim
Google to produce the contents of YouTube’s logging database, which contains data concern-ing each time a YouTube video is viewed on the YouTube Website or through embedding a third-party Website The Logging Database records each instance a video is watched, the unique login ID of the user who watched it, the time when the user started to watch the video, the user’s Internet protocol address, and the unique identifier for the video Third, the court denied Viacom’s motion to compel the defen-dants to disclose two key pieces of computer code underlying the YouTube Website on grounds that they are trade secrets and disclo-sure of them could devastate the defendants’
business As the case moved forward, most legal experts expected the parties to resolve the case viaOUT-OF-COURT SETTLEMENT Some legal obser-vers even suggested that Viacom and Google might use a settlement to forge an ongoing business relationship
Remedies for Infringement
Because the owner loses the value of a copyright when infringement occurs, relief is often sought through filing a lawsuit in federal court If infringement is established, the court can grant preliminary and permanent injunctions or court orders that restrain the offending party from continuing to infringe the copyright The court may also award monetary damages as a remedy for copyright infringement The copy-right owner can recover for actual financial losses and any additional profits that the infringer earned from the infringement
The copyright owner may instead choose to receive statutory damages, which range from a minimum of $250 to a maximum of $10,000
The court may adjust these limits based on the innocence or willfulness of the infringer Inno-cent infringers may prove their GOOD FAITHand may have damages reduced to as little as $100, whereas willful infringers may be punished
by the court with damages as high as $50,000
Courts may also impound and even destroy illicit reproductions of copyrighted works