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The good, bad, ugly of copyright law rewrites.
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Copyright 1998 by David Loundy
Congress is actively trying to update the U.S. copyright law to account for digital technology, in part because of a deep-seated need to regulate, and in part to bring the law in line with the requirements of a treaty sponsored by the World Intellectual Property Organization, the WIPO Copyright Treaty). As is often the case, some pieces of legislation are better than others. Also, as is frequently the case in the high-tech context, the legislation that leaves something to be desired is being signed into law.
To begin on a positive note, one of the best pieces of proposed digital technology legislation I have seen in some time is H.R. 3048, the "Digital Era Copyright Enhancement Act" proposed by Representatives Rick Boucher (D-Va) and Tom Campbell (R-Ca). The legislation has merit on several grounds
1. It shows an understanding of the technology;
2. It shows an understanding of the law and how it applies to the technology; and
3. It attempts to strike a balance between the rights of intellectual property owners and intellectual property users.
The Digital Era Copyright Enhancement Act begins by addressing the issue of "fair use" of a digital work. The legislation offers that the technology used for transmitting a copyrighted work should be irrelevant for determining whether that transmission is a fair one. The technological means of initially performing, displaying or distributing a work should also be irrelevant in determining whether a subsequent use of the work is a fair one. A controversial stance the legislation takes, discussed in more detail later in this article, is that a fair use analysis should not be affected by whether a digital work is protected from reproduction by technological measures. Similarly, the legislation would allow an expansion of the use of copyrighted works for classroom teaching, even if the "classroom" constitutes remote locations comprising a "distance learning" environment.
The bill also contains provisions for libraries and archives-- expanding the ability to make copies of digital works to preserve such works. The legislation particularly notes that some copies may be needed as a result of storage and display technologies becoming obsolete.
Another provision contained in the proposed legislation is one that allows preservation of the "first sale" doctrine for digital works. The first sale doctrine states that a copyright holder can control the first sale of a work, but not any subsequent transfers of a particular copy of a work. However, the exclusive right to reproduce a work is not affected. This allows businesses such as used book and CD stores to operate-- the copyright holder cannot prevent the subsequent distribution of a work after the first sale of a particular copy. In the digital context, however, computers work by making copies. If you have a copy of an electronic book on the hard drive of your computer, and you e-mail it to someone, you have made a reproduction of the work-- a right still reserved to the copyright holder-- and have not just made a transfer of the work as allowed under the first sale doctrine.
The proposed legislation addresses this issue sensibly by allowing you to make a copy by transmitting a work to another, but only if you destroy your copy of the work at "substantially" the same time.
The bill also clears up an issue I have been concerned about for some time. Because the use of an electronic work requires that a copy be made, any use of an electronic work is a potential infringement. Because this is an obviously silly outcome, in the 1970s, the National Commission on New Technological Uses of Copyrighted Works proposed Section 117 of the Copyright Act to allow certain copies of computer programs to be made as may be necessary to use or preserve such works. Although Section 117 was adopted, it covers "computer programs," and arguably dose not cover data. Thus, although you can copy your word processor in order to use it, you may still be infringing by viewing someone else's documents with your word processor.
The Digital Era Copyright Enhancement Act broadens Section 117 to apply clearly to all digital works.
Perhaps the most striking aspect of the proposed legislation is that it would overturn cases such as Pro-CD v. Zeidenberg, 1996 U.S. App. LEXIS 14951 (7th Cir. 1996), thus bringing the 7th Circuit in line with the rest of the country in limiting "shrink-wrap" licenses. The bill provides that non-negotiable contracts which attempt to limit use of non-copyrightable material, such as the listings of telephone numbers at issue in Pro-CD, would be specifically preempted. The same preemption would apply to any non-negotiable licenses which attempt to restrict a user's rights to use a copyrighted work as may be specifically allowed under provisions of the Copyright Act, such as the fair use provision. This provision would also throw a wrench into the proposed Article 2B to the Uniform Commercial Code which would support such non-negotiated licenses.
Another provision of the bill would implement a requirement of the WIPO Copyright Treaty that requires signatories to have in place legislation which makes it illegal to bypass digital copyright protection management systems. This requirement has been very controversial, which brings us back to the fair use discussion.
Some people argue that an additional bypass prohibiting provision is unnecessary under the U.S. Copyright Act, and that adequate protection is already provided by the current U.S. Copyright Act.
Others disagree, and have proposed strict prohibitions against any attempts to bypass digital copyright protection schemes. H.R. 2281, proposed by Representatives Coble, Hyde, Conyers and Frank, contains a blanket prohibition against bypassing protection schemes. Such a blanket prohibition risks removing the ability to make fair use of a digital work, as is specifically provided for in the Constitution. The inability to bypass protection schemes would also make it impossible to reverse-engineer software to develop new products based on an existing one. It also could potentially require a payment in order to so much as read an electronic work-- with no allowance for use of such a work for teaching or scholarship. For these reasons, H.R. 2281 has been opposed by 60 law professors in a letter sent to Representative Coble.
The Digital Copyright Enhancement Act also prohibits bypassing copyright protection schemes, but, unlike the Coble bill, would allow protection schemes to be bypassed if the purpose of the circumvention does not amount to an infringement. Both bills also allow a court to reduce or remit damages if a violation is found to be "innocent."
Two bills are also pending which would address system operator liability for infringements that occur on or through a provider's system. H.R. 2181, the "On-Line Copyright Liability Limitation Act" is a short statute which would provide immunity from claims of copyright infringement where the service provider merely transmits or provides access to infringing material where the provider does not know of the presence of infringing material. The legislation sets forth a number of other requirements for a service provider to remain free from liability, such as not receiving financial benefit for any particular act of infringement. Such a provision would strongly advise against a service provider imposing "traffic charges" where any traffic, some of which might be infringing, results in extra income for the service provider. The bill also eliminates liability where the provider does not know of the presence of infringing material, and provides some immunity from claims based on the provider's removing infringing material once the provider has become aware of its presence. Unfortunately, the draft legislation does not adequately flesh out this provision, and will inevitably result in litigation.
The other bill to address service provider liability does provide more detail for when a service provider has notice of infringements ocurring on the provider's system-- it has an extensive provision for a service provider's handling infringement claims. Unfortunately, the provisions of Senator Ashcroft's "Digital Copyright Clarification and Technology Education Act of 1997" (S. 1146) require that any material which a copyright holder asks to have removed be the subject of a copyright registration or at least subject to an application for a registration-- a requirement that is otherwise largely unnecessary, and is discouraged by international convention.
The final piece of copyright legislation, the No Electronic Theft Act (The NET Act-- H.R. 2265) was, unfortunately, recently signed into law. The Act expands criminal penalties for non-profit copyright infringement. The Act was intended to close the "LaMacchia Loophole" which came to light in the attempted prosecution of a college student for running a computer bulletin board system intended for the distribution of pirated computer software (U.S. v. LaMacchia, No. 9410092-RGS (D. Mass. Dec. 28, 1994)). The prosecution in that case failed because charges were brought under the Wire Fraud Statute, rather than under the Copyright Act. The court held that because the bulletin board operator was not profiting from any infringements, the requirements for a fraud conviction were not present.
Under the NET Act, non-commercial copyright infringement of a sufficient dollar value would now be a criminal act. Thus, copyright holders could now ask the government to bear the cost of prosecuting infringers instead of using the already-available remedies provided by the Copyright Act. In other words, the No Electronic Theft Act closes a loophole that does not really exist.
Unfortunately, when put into an Internet context, the NET Act creates a potential chilling effect and upsets the Constitutional balance provided by the Copyright Act. The Internet works, in essence, by making copies. If I post something to usenet news, I may create a million copies of whatever I transmit. If I post a quote from a newspaper article, the use of which I believe to be a fair one and thus protected from liability, but if that use is not actually fair and the value of the work which I post is even a fraction of a cent, arguably I could be subject to up to a year in jail under the terms of this new law. This is clearly a stiff deterrent to impose as a result of a failed attempt at a creative prosecution in a case where another remedy was already readily available.
I have long claimed that the Copyright Act contains some legitimate holes to be filled when the law is applied to a digital context. Unfortunately, too much of the resulting legislation is reactionary and poorly considered. While the Digital Copyright Enhancement Act is a refreshingly informed and balanced attempt to fill some of these holes, why is it that Congress always seems to be most excited about mistakes such as the NET Act? |
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Junk e-mailers face attack on several fronts
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Copyright 1998 by David Loundy
Unsolicited Commercial E-mail ("UCE" or "spam") is once again the topic of the day in cyberlaw circles. I have mentioned in past articles efforts to sue over UCE. Theories have included trademark infringement (for forging addresses in the e-mail headers), trespass to chattels (a wonderfully Victorian cause of action to bring against someone for inappropriate computer use), and even violation of computer crime laws. I have also mentioned efforts to pass federal legislation outlawing junk e-mail, just as Congress did to help address the problem of junk faxes. Though Congress may be slow in addressing the issue, the court cases have been moving quickly.
After America Online's earlier victories against spammers, the on-line service has been trying for a volume discount in the federal courts. AOL has brought suit against nearly a dozen junk e-mailers, and a number of the suits have resulted in favorable settlements for AOL. Other service providers have also been suing spammers-- suits have been filed by Juno Online Services L.P, Bigfoot Partners, RustNet, Hotmail, Typhoon, Inc., and Earthlink Networks-- and many other providers have also contemplated filing suits on their own.
The issues motivating this article, however, include the recent settlement of a lawsuit brought by Earthlink against Cyber Promotions and its president, Sanford Wallace, the first lawsuit brought by the Federal Trade Commission against a spammer, and new legislation passed in Washington State severely limiting the sending of junk e-mail.
Sanford Wallace has been the poster child for junk e-mailers. In fact, he even adopted the name "Spamford" Wallace, much to the chagrin of the Hormel Foods Corp., makers of the Spam potted pig product. At one point, it was calculated that Wallace's company was sending more than one million pieces of UCE a day to AOL users alone. (AOL has claimed that as much of one third of the e-mail it processes is UCE).
Perhaps as a result of having several suits brought against him (and even receiving a cease-and-desist letter from Hormel), he has stopped sending out junk e-mail himself. Instead, he has 'repurposed' his company to help others send out an amazing amount of junk e-mail. Since his company has had service cut off by almost every service provider it has used, generally because its actions violate the provider's acceptable use policy, Wallace and Walt Rines of Quantum Communications Inc. have been working to set up their own junk e-mail-friendly network under the name Global Technology Marketing Inc.
To have the time to set up his network, however, Mr. Wallace needed to settle the lawsuit recently filed against him by Earthlink. The suit, filed in California Superior Court (No. BC 167502, Judge Kenneth Freeman), accused Wallace of state and federal service mark infringement, state and federal service mark dillution, false designation of origin, unfair trade practices, unfair competition, misappropriation of computer resources, conversion, trespass, unjust enrichment, and violation of the Electronic Communications Privacy Act and the Computer Fraud and Abuse Act.
The settlement is noteworthy because it amounts to a crushing victory for the service provider. In essence, the settlement states that if EarthLink catches any Wallace-affiliated company sending junk e-mail to any EarthLink customer without receiving prior permission, Wallace will be personally liable for $1 million in damages. Wallace may be held liable not only for sending UCE, but also for encouraging others to send such mail to EarthLink subscribers, selling e-mail address lists which include EarthLink subscribers, or even selling software that others may use to send UCE to EarthLink subscribers.
Oh, and did I mention that the settlement also includes a consent judgement against Cyber Promotions for $2 million? In other words, the Titanic of the junk e-mail business has just met its iceberg.
While courts have been consistently ruling against the senders of junk e-mail based on the method of transmission of the messages, the Federal Trade Commission's interest in the subject matter of the messages has been growing. Much of the UCE that I receive consists of solicitations for questionable investments, home business opportunities, various miracle health remedies, pyramid schemes, and adult web sites. Needless to say, many of these messages are clearly illegal (and most of the rest are merely objectionable).
The Federal Trade Commission agrees and has filed suit in the United States District Court, District of Maryland against a Nevada company calling itself the "Internet Business Bureau" and the company's officers. The Internet Business Bureau attempted to sell Internet advertising opportunities, in part, by encouraging participants to send out spam to others. The FTC's complaint alleges that the company's promises of guaranteed income to participants violates Section 5 of the FTC Act, 15 U.S.C. ¤ 45(a). In addition, the FTC alleges that the promotion of the business opportunity does not meet with the requirements of its "Franchise Rule" which requires that certain disclosures be made. Without making proper disclosures, the defendant's action constitute unfair and deceptive trade practices.
Based on past successes the FTC has had in cracking down on Internet fraud, it will likely succeed in this case as well. It is an omen of things to come. One of the reasons that junk e-mail is the object of such fervent contempt is because even if you bypass the service providers' arguments that such e-mail is an unlawful impairment of their resources, you are still left with the fact that the majority of the junk e-mail is simply fraudulent. State and federal regulators are warming to the challenging of cracking down on such material, and more attempts at prosecuting the senders of such mail are inevitable.
Of course, the legislators do not want to be left out of the picture either. On the heels of Nevada passing an anti-spam law, Washington State has just passed one as well. HB 2752, signed into law on March 25, 1998, states that "[n]o person, corporation, partnership, or association may initiate the transmission of a commercial electronic mail message from a computer located in Washington or to an electronic mail address that the sender knows, or has reason to know, is held by a Washington resident" if the message has a forged message header or a false or misleading subject line. Furthermore, the legislation states that such a transmission constitutes a violation of the state Consumer Protection Act. The legislation also explicitly allows service providers to implement schemes to block messages which may violate the legislation, and the legislation grants the service provider immunity for any liability threatened as a result of trying to block such commercial messages.
The statute is one of the best state anti-spam laws that I have seen proposed. Unfortunately, it still has its problems-- such as the lack of a definition of a "commercial electronic mail message" as well as a potentially fatal loophole. Of course, the statute's biggest shortcoming is that it only applies to Washington State. Spam is an international problem, and a single-state solution will not solve the problems that UCE presents.
Technical solutions may provide one of the better answers to the problem of unwanted junk e-mail. There are a number of companies actively developing anti-junk e-mail solutions. When I receive UCE, I now forward it to two groups which are working on developing products to filter out unsolicited commercial e-mail intelligently.
One such product, MailGuard, has been generating international attention. This shareware program sends a query to the sender of any piece of incoming e-mail. If the query cannot be delivered, the original message is assumed to have been sent by a spammer, and all further mail from that address is automatically rejected. If a response is received, the original message is allowed through the filter, and the sender's address is added to an automatic "approve" list. Either the filter list or the approve list can be manually edited so that the software does not have to send a query when your employer or family members try to e-mail you. Spam-filtering software programs are not perfect, but in the case of a technological problem, such technological solutions may be more effective than legislation.
Many of the threats the Internet poses are substantially overblown by the media and certain special-interest groups. Unsolicited commercial e-mail, on the other hand, is a growing and pervasive problem. It allows scams to be widely distributed. It provides easy access to present-- but often reasonably hidden-- pornography, at a single mouse-click, by sending access-information indiscriminantly to any e-mail address a spammer can find, including children's mail boxes.
There are legitimate outlets for Internet advertisers to spread their messages which do not require forgery, trademark infringement and theft of service. Reducing UCE may inconvenience certain advertisers, but the net societal loss by restricting junk e-mail is worth the current and potential harm such unwanted e-mail now represents. |
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