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E. Material That Infringes Intellectual Property Rights.


The Copyright Act 1968 protects computer programs and data but it is unclear whether images displayed on a computer screen and accompanying sounds are given the same protection. Works delivered online do not seem to fall within the definition of "television broadcasts" under the 1968 Act.

Under the Act, direct infringement occurs when a person reproduces or broadcasts a work, that action being within the copyright owner's exclusive rights. Indirect infringement occurs when one person authorises someone else to do something without the copyright owner's consent which infringes their exclusive rights. In each case, the infringement can be deliberate or innocent.

The leading case in this area is University of New South Wales v Moorhouse, in which an author claimed that the University had authorised the infringing reproduction of his books by allowing students free access to photocopying machines and failing to exercise any control over what and how much was copied. The Court held that the University had authorised the breach of copyright, although the word "authorised" implied a mental element whereby at the very least, one would have to have reason to suspect that "a photocopier" would be used for committing an infringement.

This places service providers and operators of bulletin boards in a difficult position. Everyone is aware that these services are frequently used for posting or retrieving infringing material although that is not the sole reason for the service. Although there appears to be no case law on this issue as yet, it is recommended that service providers in general should take reasonable steps to limit illegal copying. There is a defence of innocent infringement available under S115(3) of the Act.

A Copyright Law Review Committee has been set up to examine these issues.

In January 1997, according to press reports, the Australasian Mechanical Copyright Owners Society ("AMCOS") and the Australia Music Publishers Limited ("AMPAL) requested that song lyrics and music files be removed from Websites at two Australian universities, as the beginning of an attempt to combat copyright infringement on the Internet. The universities concerned complied. The law firm representing AMCOS and AMPAL suggested that had they not complied, they would now be in The Federal Court.


In early 1995, 11 BBS operators were raided around Montreal and persons were charged under the Copyright Act based on their activity of making available copies of pirated Canadian software. The Court said that there should not be any reasonable expectations of privacy with respect to persons who use BBS for communication purposes when the BBS is run as a private enterprise. Therefore, according to the Court, the police can put a BBS under electronic surveillance and keep a verbatim electronic record of communications with the computer and with individuals in these circumstances.

The Canadian Information Highway Advisory Council's ("IHAC") Subcommittee on Copyright has considered the issue of copyright liability with respect to carriage of protected works and particularly at BBS operators. Recommendation 6.16 confirmed BBS liability but if there was no defence, no owner or operator of a BBS should be liable for infringement of copyright where they had no actual or constructive knowledge of infringing material and that they had acted reasonably to limit potential abuses. In 1995, SOCAN, a collective responsible for collecting royalties for authors and composers of musical works and their publishers, filed a proposed tariff to be paid by ISPs for the public performance of musical works available on the Internet.


The Federal Law to Regulate the Conditions for Information and Communication Services (the "IuKDG"), which is expected to come into force in autumn 1997, amends copyright law in order to implement the EU Database Directive under Article 7, Amendment of Copyright Law.


In Verdict Scientology v providers and Karen Spaink , a case very similar to those brought by the Religious Technology Centre (the "RTC") in the United States, RTC brought an action against 22 ISPs and one Internet user for copyright infringement of certain confidential works of L. Ron Hubbard. The Court held that the ISPs were not to be held responsible for the wrongful acts of users, for example, copyright infringements by third parties as it was to be assumed that the ISPs do nothing more that give the opportunity to publication and that in principle, they can exert no influence over, nor have knowledge of, what the person who gains access through them, will supply. The Court did distinguish the situation where the ISP knew that a publication was wrongful and in that case, an ISP might be requested to take steps against the user in question. Here, the plaintiffs had not made it clear that the 22 ISPs should have taken steps of some sort. The Internet user amended her Website, having been warned by the plaintiffs, so that it contained only quotes of the texts and therefore she no longer violated the plaintiffs' copyright. The Court rejected all of the plaintiffs' claims. This implies that Dutch ISPs are not bound to monitor content unless given prior warning of something illegal/wrongful being present on their server.

United Kingdom

A newspaper, The Shetland Times, was successful in obtaining an interim interdict (injunction) against the defendants, Shetland News, preventing the defendants from providing hypertext links from their Website to specific articles published on The Shetland Times Website. The judge held that the inclusion of the headlines constituted an infringement of the Copyright, designs and Patents Act 1988.

This raises the question of whether headlines are copyrightable, which should be dealt with at the next hearing of this case.. But it may point more to whether links become sources of action when a link purports to show that two businesses are themselves linked or that linked material originates from the same site as it is not always clear when one is entering or leaving a Website.

United States

In a recent case concerning trade marks Playboy Enterprises Inc. v Chuckleberry Publishing Inc., Playboy Enterprises Inc., publishers of Playboy magazine, began proceedings for contempt against an Italian company, Tattilo, for breaching an injunction granted in 1981 preventing them from using the word "Playmen" in magazines published, sold or distributed in the United States. In 1996, Tattilo had created a Website with a domain name of "www.playmen.it", providing free access to fairly explicit images, with the option of paying a subscription to access more explicit images. The interesting issue here for these purposes was whether accessing the Website via an Italian server amounted to distribution in the United States. The Court held that the defendant had actively solicited US customers to its Website and had therefore distributed. The Court was not legally concerned with the fact that users in the US could access the site but that the defendant had accepted subscriptions. However, it should be noted that when Tattilo returned to Court showing that they had amended the Website so that no subscription fee was payable at all, the Court held that this would still amount to distribution . The solution, according to the Court, was to bar entry to the site for Americans though this is not practicable in practice.

In respect of copyright, there have been a few cases addressing the issue of online service provider liability. The first of these is Playboy Enterprises v Frena in which a BBS operator was held liable for direct copyright infringement due to the bulletin board subscribers uploaded and downloading unauthorised copies of Playboy's copyrighted photographs. Frena's claim that he had no knowledge of the infringing activity did not persuade the Court who said "It does not matter that (Frena ) may have been unaware of the copyright infringement. Intent to infringe is not needed to find copyright infringement. Intent or knowledge is not an element of infringement, and thus even an innocent infringer is liable for copyright". The Court also did not accept his fair use defence.

In Sega Enterprises v MAPHIA, unauthorised copies of Sega's video games software were uploaded and then downloaded from the MAPHIA bulletin board by system users. However, in this case the bulletin board operator knew of the infringement, and encouraged it to the extent of selling hardware to enable the downloaded software to be used. Liability was imposed for copyright infringement both direct (for unauthorised copies made by uploading) and contributory (for unauthorised copies made by users downloading) when the Court made its first order in which it granted preliminary injunctive relief. In that judgement, the Court noted that "even if defendants do not know exactly when games will be uploaded to or downloaded from the bulletin board, their role in the copying, including the provision of facilities, direction, knowledge and encouragement, amounts to contributory copyright infringement". The defence of fair use was also rejected by the Court. On December 16 1996, the Court granted Sega's motion for summary adjudication of liability on all of its claims and also granted Sega's request for a permanent injunction prohibiting further copying of Sega games by way of a BBS run by Sherman (who ran the MAPHIA BBS). However, under this order, Sherman was not liable for direct copyright infringement as Sega had not proved that he directly caused the copying.

The case of Religious Technology Centre v Netcom Online Communication Services went further. The Religious Technology Centre ("RTC") brought an action against one of their ex-ministers, Erlich, claiming he infringed RTC's copyrights by uploading works on to an Internet discussion group. RTC also named Klemesrud, a bulletin board operator, and Netcom, an Internet access provider, as defendants, alleging that both Klemesrud and Netcom directly, contributorily and vicariously infringed RTC's copyrights. On Netcom's motion for summary judgement on the issue of direct infringement the Court held that both Netcom and Klemesrud were merely conduits for electronic communications and that "it did not make sense to adopt a rule that could lead to the liability of countless parties whose role in the infringing is nothing more than setting up and operating a system that is necessary for the functioning of the Internet".

On the issue of vicarious infringement, the Court dismissed RTC's claims as they failed to establish that either Netcom or Klemesrud received any direct financial benefit from Erlich's alleged infringement, due to their fixed fee structures.

In ruling that ISPs could not be held vicariously liable, the Court relied on the recently reversed decision of Fonovisa Inc. v Cherry Auction Inc.. According to William J Cook, the 9th Circuit's opinion now provides support for finding ISPs vicariously liable.

On the issue of contributory infringement the Court decided that the burden of establishing that Netcom and Klemesrud had knowledge of the infringement and substantially participated by inducing, causing or materially contributing to the infringing conduct of Erlich, fell on RTC. Given that RTC informed both Netcom and Klemesrud who refused to take any action, the Court ruled that there was still a factual issue for trial. It remains to be seen whether this will lead to liability being imposed on service providers who fail to remove alleged infringing material or terminate access to it on notification of alleged infringement, particularly where the allegations could be unsupported. However, according to a press release in August 1996 by Klemesrud, both Netcom and Klemesrud have settled with RTC so the issue of whether service providers can be found contributorily infringing due to their users' direct infringement remains open.

Finally, the Court found that factual issues precluded summary judgement on Netcom's fair use defence, as they failed to stop Erlich or prevent further dissemination, even though there was no direct financial benefit.

In another case in Virginia, Religious Technology Centre v. Lerma the defendant published sacred texts of the Church of Scientology on the Internet. The Court found that the defendant had infringed the plaintiff's copyright there being no difference between the Internet as a medium rather than any other method of publication.

It should be noted that the cases above are District Court judgements.

In relation to trade marks, in Cardservice International Inc. v McGee , the plaintiff obtained a permanent injunction to prevent the defendant using a domain name which was virtually identical to the plaintiff's registered trade mark, including a reference to a similar company name and offering the same services. The defendant had violated the Lanham Act according to the District Court. The defendant was also required to relinquish the domain name. The conflict between trade marks and Internet domain names is increasingly being played out in the Courts.

This year in Congress, the National Information Infrastructure Copyright Protection Act (which was based on the White House's Information Industry Task Force's White Paper) will be looked at again but now in the light of the two treaties passed by WIPO in December 1996. Last year, the bill failed as no compromise could be reached on fair use, service providers liability and anti-circumvention measures. The bill was to have prohibited the manufacture, import or distribution of products which would avoid, bypass, remove or otherwise circumvent any process, treatment, mechanism or system that prevents or inhibits the protection of copyright. There was concern that this would affect the use of video recorders or computers for lawful purposes.

Peter Harter, senior legal counsel at Netscape, is promoting a technical proposal called DARTS (Data Authorisation Reproduction Transmission Standards) which would, he says, allow "better behaved caching" by putting into Internet content: things like an expiry date, a statement of ownership and conditions of use.


The WIPO Copyright Treaty, passed in December 1996, gives protection to authors in respect of the distribution, among others to the public and the making available to the public of their work online.

The service provider liability issue was debated. Article 7, which would have established that the right of reproduction included direct or indirect reproduction, whether permanent or temporary, in any manner or form, including temporary storage in a computer memory, was deleted following strong opposition from the online and telecommunications industries. They argued that protection for temporary copying would impose infringement liability for the copying that occurs when using computer networks, effectively making the caching of Websites and browsing the Web illegal.

The Copyright Treaty also extends the notion of a literary work to cover computer programs and provides for redress against the deliberate circumvention of anti-copy and rights management technologies (Article 11). Article 10 provides that the responsibility for copyright infringements will lie with the user rather than the ISP.

The Performances and Phonograms Treaty grants exclusive rights of reproduction, distribution, rental and online dissemination of phonographic works to artists and producers, but unfortunately the Treaty only covers sound and not soundtracks of audio-visual products.

The WIPO meeting in December 1996 had also planned to debate the protection of databases treaty. As no agreement could be reached, the treaty has been shelved for the time being, with plans for another meeting to take place in June or July 1997. When the EU Directive comes into force on January 1 1998, this will now have an impact on all non EU countries and particularly the United States.

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