|
|
|
|
| Transacting
the Information Marketplace:
As threats
to their interests have grown, copyright holders have fought back,
and have been helped by courts and Congress in reaffirming their rights. While the ease of copying information lulled
many individuals and companies into the belief that they could copy
and use others’ work with impunity, case law regarding copyrights
is catching up with modern copying tools.
Moreover, just as technology has made copying and infringing
easier, technology tools are becoming available to make copyright
compliance — and enforcement — easier.
As a result, corporations that continue to neglect copyright
compliance issues are taking risks that may cost millions of dollars.
Copyright
law vests the copyright owner with the exclusive rights to reproduce
and distribute copies of copyrighted works.1
However, understanding what constitutes illegal reproduction
or distribution, and where a protected copyrighted work begins and
ends, is often difficult. For example, what many believe is allowed as
a “fair use” of copyrighted works actually constitutes infringement. Recent case decisions have solidified the protection
of works, regardless of the medium in which they are originally transcribed
or copied. Modern methods of
copying, including photocopying and electronic copying, are limited
under the fair use doctrine and the copying prohibition in general. Statutory
changes have also helped copyright law keep up with technology. For instance, The Digital Millennium Copyright
Act of 19982 clarifies and extends copyright protection of works made
available in digital form online or over the Internet. In recognition of the increasing ease with which
infringement can occur with modern technology, the Act increases penalties
for infringement to $1 million. Lowry’s
was notified of this distribution by a disgruntled Legg Mason employee. Lowry’s notified Legg Mason that the activities
constituted infringement. Legg
Mason continued the illegal activities and was held vicariously liable
for copyright infringement due to its failure to supervise employees,
notwithstanding the company policy against such infringement. The court also rejected Legg Mason’s argument
that copying via email was fair use because the reports were copied
in full and used for business-related activities.
Lowry’s
actual damages were calculated around $6.5 million.
However, the jury awarded Legg Mason just under $20 million
for statutory damages and damages for willful infringement. The jury award was upheld because there was
evidence from which the jury could have concluded that Legg Mason’s
employees’ conduct was “unreasonable and in bad faith.”4 The court did not require that statutory
damages be strictly related to actual injury and determined that the
punitive damages were not “grossly excessive.” The Lowry case indicates that copyright infringement
extends to activities that involve the electronic reproduction of
an entire work and that the penalty for such infringement can be severe. However, as the following discussion indicates,
the entire work does not need to be copied for the activity to be
illegal. Sometimes systematic
copying of portions of a copyrighted work constitutes illegal copying.
A
Part Can Be Plenty In American Geophysical Union v. Texaco, Inc.,5 defendant Texaco
was found liable for copyright infringement for photocopying and circulating
single licensed copies of trade journals and publications in-house
to all employees. Texaco was
enjoined from continuing such activity.
The court held that the fair use defense under 17 U.S.C. §107,
which permits unlicensed copying for the purposes of criticism, comment,
news reporting, teaching, scholarship, or research did not apply.
Texaco argued the copying was fair use because it was for research
purposes and was limited to in-house copying.
The court disagreed and held that the purpose of Texaco’s copying
was to create duplicate copies of the publication being circulated
by the library, and that commercial exploitation such as this did
not constitute fair use. Texaco’s circulation policy encouraged institutional
and systematic copying directed toward the goal of increasing the
number of copies available to employees without paying the necessary
license fees for additional subscriptions.
Texaco ultimately settled out of court for an undisclosed seven-figure
amount. Interestingly,
the Texaco court found copyright
infringement of the entire publication even though only individual
articles were being copied. Moreover,
the writers of the journal articles did not receive any financial
reward from having their articles included in the publications.
Therefore, the holding in Texaco
was based on the premise that the selection of articles and presentation
of them was the protected interest of the publishers, and the scope
of copyright protection extended to maintaining those articles in
their original display within the journal.
The direct photocopying of even a single article resulted in
the impermissible reproduction of a portion of the entire work and
a violation of the copyright belonging to the entire journal. Electronic
Media Also Covered Copyright
protection for published articles covers not only photocopying, but
also extends to protect against their reproduction and dissemination
in other media. The Copyright
Act protects works in their original form, and does not permit copying
and pasting substantial parts of a work from its original form to
a different version. In New
York Times Co., Inc. v. Tasini,6 the plaintiffs were freelance
authors who contributed articles to the New
York Times newspaper that were subsequently redistributed to companies
such as LEXIS/NEXIS without permission.
The authors sued the newspaper publisher for submitting their
articles to the electronic content providers for inclusion in an online
computerized database and CD-ROM products.
The court held that the articles taken together, as printed
in the New York Times, constituted a collective work, but the rights to each
article vested in the author of the particular contribution. The court stated that “if there is demand for
a freelance article standing alone or in a new collection, the Copyright
Act allows the freelancer to benefit from that demand.” In other words, a freelance author has rights
in the portion of the collective work to which they contributed. The New York Times argued the LEXIS/NEXIS database and CD-ROMs
were merely revisions of a collective work, and that the authors retained
no rights regarding such revisions.
The Copyright Act allows owners of a collective work to redistribute
the constituent parts as a revision of that collective work.7 The court rejected this claim, concluding that
a revision authorized under the original grant of rights by the freelance
authors must “preserve some significant original aspect” of the underlying
collective work. In Tasini, the court held that the
electronic versions of the articles were not a mere “revision” of
the original collective work (i.e.
the newspaper). The court noted
that the articles were not displayed as they originally were published
in the printed version of the New
York Times. Moreover, only certain articles were chosen
for reproduction in the electronic databases.
The court refused to allow the publisher to circumvent §201(c)
of the Copyright Act by offering the articles for individual sale
through computer databases. Because
the chosen articles were not displayed in the same context as they
were when first published in the New York Times, distributing the articles
electronically was an infringement of the freelance authors’ rights.
Tasini clarifies that copyright protection extends
to creative works regardless of the medium in which they are subsequently
copied, electronic or otherwise. Authors
of works displayed in collective works have rights in their creations
outside the scope of the collective work in which those creations
are initially presented. A
publisher seeking to separate and include an article from a collective
work in a database must first obtain a license conveying electronic
rights in the article from the author. Risks
and Costs The three
cases discussed in this article clarify that, while unauthorized copying
and distribution can and does happen in the context of activities
made easy and cheap by modern technology, that activity may nevertheless
infringe copyrights. According to the court in Texaco, photocopying parts of a copyrighted
publication can constitute infringement. The ruling in Tasini prohibits the copying of
selections from collective works and displaying them in other media,
such as online or in an electronic database, without permission. The court in Lowry’s prohibited the unauthorized selection and distribution of
an entire publication via email or on an internal Intranet. These courts found infringement in activities
that some might see as de minimus copying, acceptable internal copying,
or an allowable or “fair” use of something that the defendant already
had rights to use. Clearly,
such assumptions can no longer be so easily held. Furthermore,
the repercussions that infringers face can be dramatic. As the hefty damages award in the Lowry case demonstrates, refusing to purchase
another copy of the publication is not worth the potential liability
for copyright infringement. If
an infringer is found liable, the owner of a copyrighted work may
elect to recover either actual damages, the infringer’s profits, or
statutory damages. Statutory damages can range between $750 and
$30,000 per act and may be increased to $150,000 per act if the act
is “willful.”8 The
same technology that makes it easy to make a single copy enables easy
production of multiple copies of multiple works. Such multiple infringements multiply the damages
exposure as well. Alternatives
to Infringement These
dangers can be avoided by taking simple steps.
For instance, Legg Mason could have avoided liability by purchasing
the correct number of licenses to use Lowry’s reports at a price that
was a mere fraction of the damages award.
The New York Times could have obtained permission
from the individual authors to resell their articles by contract.
End users
can also protect themselves by making arrangements in advance to cover
their intended use of copyrighted material.
Many law firms and corporations have research staff or librarians
who handle the task of obtaining clearance for the use of content. Firms can secure particular publication “feeds”
to direct selected information onto their corporate intranets. When rights to individual works are needed for
research or advertising purposes, these can be separately requested. But these approaches can be time-consuming. Another
alternative is to utilize a licensing firm.
The path
of innovation in respect to copyrights thus seems to be coming full
circle. Having first appeared in the form of technologies
that made infringement almost frighteningly easy, the road led on
through legal developments reaffirming creators’ rights in their work
and has now turned into technologies and organizational structures
that enable a fair and easy commerce in the sharing of information.
With appropriate attention to safeguards for others’ rights,
it’s easy to reap the benefits of today’s burgeoning information marketplace.
Notes 2
Pub. L.
No. 105-304, 112 Stat. 2860 ( 3
Lowry’s Reports, Inc. v. Legg Mason, Inc., 271 F.Supp. 2d 737 (D. 4
Lowry’s Reports, Inc. v. Legg Mason, Inc., 302 F.Supp. 2d 455 (D. 5
American Geophysical 6
New York Times v. Tasini, 533 7
17 U.S.C. §201(c) (2004). 8
17 U.S.C. §504(c) (2004). Risky
Assumptions About Copyright
The
authors express their appreciation to Jeff Brown and Heather Kliebenstein,
associate attorneys at Merchant & Gould, PC, for their assistance
in preparing this article. |
