ÿWPCÑ ûÿ2B…JÏ|x THE FINAL WHITE PAPER - Part I.A. Folio Views InfobaseÿÿÕ Õà ÃÑ#XPú\  PQÿÐP#ÑÃÃÐÔÂrÊ" z Ò*‚Ú2Šâ: ’"ê$B'ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ(ÔÐÐ ÜÜ ÐIntellectual Property Ñ#XPú\  PQÿXP#ÑÄÄÐÐÐÔX°` ¸ hÀpÈ xÐ (#€%ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ²(ÔÐÐ °° Ðand the Ñ#XPú\  PQÿÐP#ÑÃÃNational Information Infrastructure Ä ÄÑ#XPú\  PQÿXP#ÑÄÄÃÃÐÐÐÔÂrÊ" z Ò*‚Ú2Šâ: ’"ê$B'ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ²(ÔÐÐ ÜÜ ÐThe Report of the Working Group on Intellectual Property Rights ÃÃÄÄBruce A. Lehman Assistant Secretary of Commerce and Commissioner of Patents and Trademarks Chair ÄÄInformation Infrastructure Task Force ÃÃRonald H. Brown Secretary of Commerce Chair ÄÄSeptember 1995 à ÃÑ#XXŒðyPQÿXP#ÑÐÐÐ °° Ð[I. Law - A. Copyright] Ñ#XPú\  PQÿXP#ÑA. Copyright Ñ#XPú\  PQÿXP#ÑÐÐÐ Ü° Ð1. Purpose of Copyright Law Ä ÄÑ#XPú\  PQÿXP#ÑÐ ÜÜ ÐThe Constitution of the United States provides that Congress has the power 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." 30 The framers of the Constitution did not discuss this clause at any length prior to or after its adoption. 31 The purpose of the clause was described in the Federalist Papers by James Madison: Ð  ÐThe utility of this power will scarcely be questioned. The copyright of authors has been solemnly adjudged, in Great Britain, to be a right of common law. The right to useful inventions seems with equal reason to belong to the inventors. The public good fully coincides in both cases with the claims of individuals. 32 Ð ÜÜ ÐThe Constitution outlines both the goal that Congress may try to achieve (to promote the progress of science and useful arts) and the means by which they may accomplish it (by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries). 33 The Supreme Court has often spoken about the purpose of copyright: Ð  Ð[I]t should not be forgotten that the Framers intended copyright itself to be the engine of free expression. By establishing a marketable right to the use of one's expression, copyright supplies the economic incentive to create and disseminate ideas. 34 We have often recognized the monopoly privileges that Congress has authorized, while "intended to motivate the creative activity of authors and inventors by the provision of a special reward," are limited in nature and must ultimately serve the public good. 35 The primary objective of copyright is not to reward the labor of authors, but "[t]o promote the Progress of Science and useful Arts." To this end, copyright assures authors the right in their original expression, but encourages others to build freely upon the ideas and information conveyed by a work. 36 The economic philosophy behind the [Constitutional] clause . . . is the conviction that encouragement of individual effort by personal gain is the best way to advance the public welfare through the talents of authors and inventors . . . . Sacrificial days devoted to such creative activities deserve rewards commensurate with the services rendered. 37 The monopoly privileges that Congress may authorize are neither unlimited nor primarily designed to provide a special private benefit. Rather, the limited grant is a means by which an important public purpose may be achieved. It is intended to motivate the creative activity of authors . . . by the provision of a special reward, and to allow the public access to the products of their genius after the limited period of exclusive control has expired. 38 [C]opyright is intended to increase and not to impede the harvest of knowledge . . . . [T]he scheme established by the Copyright Act . . . foster[s] the original works that provide the seed and substance of this harvest. The rights conferred by copyright are designed to assure contributors to the store of knowledge a fair return for their labors. 39 The copyright law, like the patent statutes, makes reward to the owner a secondary consideration . . . . It is said that reward to the author or artist serves to induce release to the public of the products of his creative genius. 40 Ð ÜÜ ÐCopyright is "intended definitely to grant valuable, enforceable rights to authors . . . 'to afford greater encouragement to the production of literary works of lasting benefit to the world.'" 41 The purpose is not to reward the author, but the law does so to achieve its ultimate purpose -- "to induce release to the public of the products of his creative genius." 42 The "immediate effect" of the copyright law is that authors receive a "fair return for [their] creative labor"; however, the "ultimate aim is, by this incentive, to stimulate artistic creativity for the general public good." 43 Congress also interpreted the clause when it enacted the Copyright Act of 1909: Ð  ÐThe enactment of copyright legislation by Congress under the terms of the Constitution is not based upon any natural right that the author has in his writings, . . . but upon the ground that the welfare of the public will be served and progress of science and useful arts will be promoted by securing to authors for limited periods the exclusive rights to their writings . . . . 44 Ð ÜÜ ÐBy granting authors exclusive rights, the authors receive the benefit of economic rewards and the public receives the benefit of literature, music and other creative works that might not otherwise be created or disseminated. The public also benefits from the limited scope and duration of the rights granted. 45 The free flow of ideas is promoted by the denial of protection for facts and ideas. 46 The granting of exclusive rights to the author "does not preclude others from using the ideas or information revealed by the author's work." 47 While copyright law "ultimately serves the purpose of enriching the general public through access to creative works," 48 copyright law imposes no obligation upon copyright owners to make their works available. While it is hoped that the potential economic benefits to doing so will induce them, copyright owners are not obligated to provide access to their works -- either during the term of protection or after. Hence, unpublished works never distributed to the public are granted as much (if not more) protection as published works. However, once an author publishes a work, copies of the work must be deposited with the Library of Congress for the benefit of the public. à ÃÑ#XPú\  PQÿXP#ÑÐ Ü° Ð2. Subject Matter and Scope of Protection Ä ÄÃÃÐ ° Ða. Eligibility for Protection ÄÄÑ#XPú\  PQÿXP#ÑÐ ÜÜ ÐThe subject matter eligible for protection under the Copyright Act is set forth in Section 102(a): Ð  ÐCopyright protection subsists . . . in original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device. 49 Ð ÜÜ ÐFrom this provision, the courts have derived three basic requirements for copyright protection -- originality, creativity and fixation. 50 The requirements of originality and creativity are derived from the statutory qualification that copyright protection extends only to "original works of authorship." 51 To be original, a work merely must be one of independent creation -- ÃÃi.e.ÄÄ, not copied from another. There is no requirement that the work be novel (as in patent law), unique or ingenious. To be creative, there must only be a modicum of creativity. The level required is exceedingly low; "even a slight amount will suffice." 52 The final requirement for copyright protection is fixation in a tangible medium of expression. Protection attaches automatically to an eligible work of authorship the moment the work is sufficiently fixed. 53 A work is fixed "when its embodiment in a copy or phonorecord . . . is sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration." 54 Congress provided considerable room for technological advances in the area of fixation by noting that the method of fixation in copies or phonorecords may be "now known or later developed." 55 The Copyright Act divides the possible media for fixation into "copies" and "phonorecords": Ð  Ð"Copies" are material objects, other than phonorecords, in which a work is fixed by any method now known or later developed, and from which the work can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device. 56 "Phonorecords" are material objects in which sounds, other than those accompanying a motion picture or other audiovisual work, are fixed by any method now known or later developed, and from which the sounds can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device. 57 Ð ÜÜ ÐAccording to the House Report accompanying the Copyright Act of 1976, Congress intended the terms "copies" and "phonorecords" to "comprise all of the material objects in which copyrightable works are capable of being fixed." 58 The form of the fixation and the manner, method or medium used are virtually unlimited. A work may be fixed in "words, numbers, notes, sounds, pictures, or any other graphic or symbolic indicia"; may be embodied in a physical object in "written, printed, photographic, sculptural, punched, magnetic, or any other stable form"; and may be capable of perception either "directly or by means of any machine or device 'now known or later developed.'" 59 In digital form, a work is generally recorded (fixed) as a sequence of binary digits (zeros and ones) using media specific encoding. This fits within the House Report's list of permissible manners of fixation. 60 Virtually all works also will be fixed in acceptable material objects -- ÃÃi.e.ÄÄ, copies or phonorecords. For instance, floppy disks, compact discs (CDs), CD-ROMs, optical disks, compact discs-interactive (CD-Is), digital tape, and other digital storage devices are all stable forms in which works may be fixed and from which works may be perceived, reproduced or communicated by means of a machine or device. 61 The question of whether interactive works are fixed (given the user's ability to constantly alter the sequence of the "action") has been resolved by the courts in the context of video games and should not present a new issue in the context of the NII. Such works are generally considered sufficiently fixed to qualify for protection. 62 The sufficiency of the fixation of works transmitted via the NII, however, where no copy or phonorecord has been made prior to the transmission, may not be so clear. A transmission, in and of itself, is not a fixation. While a transmission may result in a fixation, a work is not fixed by virtue of the transmission alone. Therefore, "live" transmissions via the NII will not meet the fixation requirement, and will be unprotected by the Copyright Act, unless the work is being fixed at the same time as it is being transmitted. 63 The Copyright Act provides that a work "consisting of sounds, images, or both, that are being transmitted" meets the fixation requirement "if a fixation of the work is being made simultaneously with its transmission." 64 To obtain protection for a work under this "simultaneous fixation" provision, the simultaneous fixation of the transmitted work must itself qualify as a sufficient fixation. A simultaneous fixation (or any other fixation) meets the requirements if its embodiment in a copy or phonorecord is "sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration." 65 Works are not sufficiently fixed if they are "purely evanescent or transient" in nature, "such as those projected briefly on a screen, shown electronically on a television or cathode ray tube, or captured momentarily in the 'memory' of a computer." 66 Electronic network transmissions from one computer to another, such as e-mail, may only reside on each computer in RAM (random access memory), but that has been found to be sufficient fixation. 67 ÃÃÑ#XPú\  PQÿXP#ÑÐ ° Ðb. Published and Unpublished Works ÄÄÑ#XPú\  PQÿXP#ÑÐ ÜÜ ÐHistorically, the concept of publication has been a major underpinning of copyright law. Under the dual system of protection which existed until the 1976 Copyright Act took effect, unpublished works were generally protected under state law. Published works, on the other hand, were protected under Federal copyright law. 68 On the effective date of the 1976 Act, Federal copyright protection became available for unpublished as well as published works. 69 The concept of publication thus lost its "all-embracing importance" as the threshold to Federal statutory protection. 70 However, while the importance of publication has been reduced through amendment to the law (ÃÃe.g.ÄÄ, granting Federal protection to unpublished works and removing the notice requirement for published works), the status of a work as either published or unpublished still has significance under the Copyright Act. For example: ÐÔîFžö N ¦þV®^¶f!¾#&ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ„ÿ(ÔÐÐ ž° ÐÁ€Á-ÁÁonly works that are published in the United States are subject to mandatory deposit in the Library of Congress; 71 Á€Á-ÁÁdeposit requirements for registration with the Copyright Office differ depending on whether a work is published or unpublished; 72 Á€Á-ÁÁthe scope of the fair use defense may be narrower for unpublished works; 73 Á€Á-ÁÁunpublished works are eligible for protection without regard to the nationality or domicile of the author; 74 Á€Á-ÁÁpublished works must bear a copyright notice if published before March 1, 1989; 75 and Á€Á-ÁÁcertain limitations on the exclusive rights of a copyright owner are applicable only to published works. 76 ÐÔÂrÊ" z Ò*‚Ú2Šâ: ’"ê$B'ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ(ÔÐÐ ÜÜ ÐThe Copyright Act provides a definition of "publication" to draw the line between published and unpublished works: Ð  Ð"Publication" is the distribution of copies or phonorecords of a work to the public by sale or other transfer of ownership, or by rental, lease, or lending. The offering to distribute copies or phonorecords to a group of persons for purposes of further distribution, public performance, or public display, constitutes publication. A public performance or display of a work does not of itself constitute publication. 77 Ð ÜÜ ÐThe definition uses the language of Section 106 describing the exclusive right of distribution, and was intended to make clear that "any form of dissemination in which a material object does not change hands -- performances or displays on television, for example -- is not a publication no matter how many people are exposed to the work." 78 It also makes clear that the distribution must be "to the public." 79 In general, the definition continues principles that had evolved through case law under previous copyright laws, 80 including the doctrine of limited publication. 81 The doctrine was developed by courts to save works from losing copyright protection when copies of the work were only distributed to a restricted number of people and for a restricted purpose without a copyright notice. 82 Those works would not be considered distributed to the public (ÃÃi.e.ÄÄ, published) and, therefore, not subject to the notice requirement. Although the notice requirement has been eliminated, and thus the most critical justification for the doctrine, the few cases dealing with publication since 1989 suggest that courts will continue to apply the doctrine of limited publication. 83 ÃÃÑ#XPú\  PQÿXP#ÑÐ ° Ðc. Works Not Protected ÄÄÑ#XPú\  PQÿXP#ÑÐ ÜÜ ÐCertain works and subject matter are expressly excluded from protection under the Copyright Act, regardless of their originality, creativity and fixation. Titles, names, short phrases, and slogans generally do not enjoy copyright protection under the Copyright Act. 84 Other material ineligible for copyright protection includes the utilitarian elements of industrial designs; 85 familiar symbols or designs; simple geometrical shapes; mere variations of typographic ornamentation, lettering or coloring; and common works considered public property, such as standard calendars, height and weight charts, and tape measures and rulers. Copyright protection also does not extend to any "idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied" in such work even if it meets the criteria for protection. 86 Thus, although a magazine article on how to tune a car engine is protected by copyright, that protection extends only to the expression of the ideas, facts and procedures in the article, not the ideas, facts and procedures themselves, no matter how creative or original they may be. Anyone may "use" the ideas, facts and procedures in the article to tune an engine -- or to write another article on the same subject. What may not be taken is the expression used by the original author to describe or explain those ideas, facts and procedures. 87 Ð  ÐCopyright does not prevent subsequent users from copying from a prior author's work those constituent elements that are not original -- for example . . . facts or materials in the public domain -- as long as such use does not unfairly appropriate the author's original contributions. 88 Ð ÜÜ ÐThis idea/expression dichotomy "assures authors the right to their original expression, but encourages others to build freely upon the ideas and information conveyed by a work." 89 Although it "may seem unfair that much of the fruit of the [author's] labor may be used by others without compensation," it is "a constitutional requirement" -- the "means by which copyright advances the progress of science and art." 90 As a matter of law, copyright protection generally is not extended under the Copyright Act to works of the U.S. Government. 91 Therefore, nearly all works of the U.S. Government -- including this Report -- may be reproduced, distributed, adapted, publicly performed and publicly displayed without infringement liability in the United States under its copyright laws. 92 While the Copyright Act leaves most works created by the U.S. Government unprotected under U.S. copyright laws, Congress did not intend for the section to have any effect on the protection of U.S. government works abroad. 93 ÃÃÑ#XPú\  PQÿXP#ÑÐ ° Ðd. Categories of Protectible Works ÄÄÑ#XPú\  PQÿXP#ÑÐ ÜÜ ÐThe Copyright Act enumerates eight broad categories of protectible subject matter: ÐÔîFžö N ¦þV®^¶f!¾#&ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ„ÿ(ÔÐÐ ž° ÐÁ€Á(1)ÁÁliterary works; Á€Á(2)ÁÁmusical works, including any accompanying words; Á€Á(3)ÁÁdramatic works, including any accompanying music; Á€Á(4)ÁÁpantomimes and choreographic works; Á€Á(5)ÁÁpictorial, graphic and sculptural works; Á€Á(6)ÁÁmotion pictures and other audiovisual works; Á€Á(7)ÁÁsound recordings; and Á€Á(8)ÁÁarchitectural works. 94 à ÃÐÐÐÔÂrÊ" z Ò*‚Ú2Šâ: ’"ê$B'ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ²(ÔÐÐ ÜÜ ÐLiterary Works Ä ÄÐÐAlthough many categories of works will be available via the NII, the majority of works currently available on computer networks such as the Internet are literary works. Ð  Ð"Literary works" are works, other than audiovisual works, expressed in words, numbers, or other verbal or numerical symbols or indicia, regardless of the nature of the material objects, such as books, periodicals, manuscripts, phonorecords, films, tapes, disks, or cards, in which they are embodied. 95 Ð ÜÜ ÐLiterary works include computer programs, 96 articles, novels, directories, computer databases, essays, catalogs, poetry, dictionaries, encyclopedias, and other reference materials. 97 à ÃÐÐMusical Works Ä ÄÐÐA musical work consists of the musical notes and lyrics (if any) in a musical composition. 98 A musical work may be fixed in any form, such as a piece of sheet music or a compact disc. 99 Musical works may be "dramatic," ÃÃi.e.ÄÄ, written as a part of a musical or other dramatic work, or "nondramatic," ÃÃi.e.ÄÄ, an individual, free-standing composition. à ÃÐÐDramatic Works Ä ÄÐÐGenerally, a dramatic work is one in which a series of events is presented to the audience by characters through dialogue and action as the events happen, such as in a play. 100 à ÃÐÐPantomimes and Choreographic Works Ä ÄÐÐThis category was first added to the list of protectible subject matter in 1976. 101 While pantomimes and choreographic works, such as dances, can be fixed in a series of drawings or notations, they are usually fixed on film or videotape. à ÃÐÐPictorial, Graphic and Sculptural Works Ä ÄÐÐA significant number of works traveling through the NII will be pictorial and graphic works. Works in this category include: Ð  Ð[T]wo-dimensional and three-dimensional works of fine, graphic, and applied art, photographs, prints and art reproductions, maps, globes, charts, diagrams, models, and technical drawings, including architectural plans. 102 Ð ÜÜ ÐA work of art which is incorporated into the design of a useful article, but which can stand by itself as art work separate from the useful article, is copyrightable, but the design of the useful article is not. 103 à ÃÐÐMotion Pictures and other Audiovisual Works Ä ÄÐÐThe Copyright Act provides definitions of "audiovisual works" and the subcategory "motion pictures": Ð  Ð"Audiovisual works" are works that consist of a series of related images which are intrinsically intended to be shown by the use of machines, or devices such as projectors, viewers, or electronic equipment, together with accompanying sounds, if any, regardless of the nature of the material objects, such as films or tapes, in which the works are embodied. 104 "Motion pictures" are audiovisual works consisting of a series of related images which, when shown in succession, impart an impression of motion, together with accompanying sounds, if any. 105 Ð ÜÜ ÐThe House Report notes that the key to the subcategory "motion pictures" is the conveyance of the impression of motion, and that such an impression is not required to qualify as an audiovisual work. 106 à ÃÐÐSound Recordings Ä ÄÐÐA "sound recording" is the work that results from the fixation of sounds, including those that are musical or spoken. 107 When those sounds are included in an audiovisual work, such as a music video, they are considered part of the audiovisual work rather than a sound recording. 108 à ÃÐÐArchitectural Works Ä ÄÐÐAn "architectural work" is "the design of a building as embodied in any tangible medium of expression, including a building, architectural plans, or drawings." 109 It includes the overall form as well as the "arrangement and composition of spaces and elements" in the design of the building. 110 à ÃÐÐCompilations and Derivative Works Ä ÄÐÐA compilation is "a work formed by the collection and assembling of preexisting materials or of data that are selected, coordinated, or arranged in such a way that the resulting work as a whole constitutes an original work of authorship." 111 Directories, databases, magazines and anthologies are types of compilations. A derivative work is a work "based upon" one or more preexisting works. 112 A derivative work is created when one or more preexisting works is "recast, transformed, or adapted" into a new work, such as when a novel is used as the basis of a movie or when a drawing is transformed into a sculpture. 113 Translations, musical arrangements and abridgments are types of derivative works. The Copyright Act makes clear that the subject matter of copyright specified in Section 102 (literary works, musical works, sound recordings, etc.) includes compilations and derivative works. 114 The copyright in a derivative work or compilation, however, extends only to the contribution of the author of the derivative work or compilation (the compiler), and does not affect the copyright protection granted to the preexisting material. 115 Protection for an individual musical work, for instance, is not reduced, enlarged, shortened or extended if the work is included in a collection, such as a medley of songs. Moreover, copyright in a compilation or derivative work does not imply any exclusive right in the preexisting material employed in the compilation or derivative work. 116 The copyright in a compilation, for example, is limited to the original selection or arrangement of the facts or other elements compiled; protection for the compilation in no way extends to the facts or elements. 117 Copyright protection is not granted simply for the hard work that may be involved in compiling facts. The Supreme Court struck down the doctrine that had protected such efforts, known as the "sweat of the brow" or "industrial collection" theory. 118 à ÃÐÐ"Multimedia" Works Ä ÄÐÐIncreasingly, works from different categories are fixed in a single tangible medium of expression. 119 This will certainly be true as development of the NII progresses and the ability to create and disseminate interactive "multimedia" or "mixed media" products increases. A prefatory note may be warranted because of the manner in which these terms are used in the context of copyright law. The terms "multimedia" and "mixed media" are, in fact, misnomers. In these works, it is the types or categories of ÃÃworksÄÄ that are "multiple" or "mixed" -- not the types of ÃÃmediaÄÄ. The very premise of a so-called "multimedia" work is that it combines several different elements or types of works (ÃÃe.g.ÄÄ, text (literary works), sound (sound recordings), still images (pictorial works), and moving images (audiovisual works)) into a ÃÃsingle mediumÄÄ (ÃÃe.g.ÄÄ, a CD-ROM) -- not multiple media. 120 However, in recognition of the prevalent use of the term, this Report refers to this type of work as a "multimedia" work. Multimedia works are not categorized separately under the Copyright Act; nor are they explicitly included in any of the eight enumerated categories. While most current multimedia works would be considered compilations, 121 that classification does not resolve the issue of subject matter categorization. 122 Despite the fact that the Copyright Act enumerates eight categories of works, works that do not fit into any of the categories may, nevertheless, be protected. The list of protectible works in Section 102 is intended to be illustrative rather than inclusive. 123 The House Report explains that the categories of works "do not necessarily exhaust the scope of 'original works of authorship' that the [Copyright Act] is intended to protect." 124 However, absent the addition of a new category, a work that does not fit into one of the enumerated categories is, in a sense, in a copyright no-man's land. 125 Under the current law, the categorization of a work holds a great deal of significance under the Copyright Act. For instance, two of the exclusive rights granted in Section 106 apply only to certain categories of works. 126 In addition, many of the limitations on rights in Sections 108 through 120 are not applicable to all types of works. 127 Therefore, categorization of multimedia and other new types of works is an important issue. Generally, multimedia works include two or more of the following preexisting elements: text (literary works), computer programs (literary works), music (musical works and sound recordings), still images (pictorial and graphic works) and moving images (audiovisual works). The definition of "literary works" begins with the phrase "works, ÃÃother than audiovisual works ÄÄ. . . ." 128 Therefore, a reasonable interpretation may be that text and computer programs that would otherwise be categorized as literary works may be considered part of an audiovisual work if included in a work of that type. Such is also the case with sound recordings. A music video is not categorized as both a sound recording and an audiovisual work; it is categorized as an audiovisual work. 129 Audiovisual works also include still images -- at least related ones. 130 Therefore, in many instances, a multimedia work may be considered -- as a whole -- an audiovisual work. The legislative history makes clear that a work in one category may contain works in other categories. 131 The somewhat strained analysis needed to find a category for multimedia works and the increasing "cross-breeding" of types of works demonstrate that categorization may no longer be useful or necessary. While the Working Group does not recommend at this time the consolidation or elimination of categories (and harmonization of the differing application of rights and limitations on those rights), it is likely that such consolidation or elimination will be appropriate in the future. à ÃÑ#XPú\  PQÿXP#ÑÐ Ü° Ð3. Copyright Ownership Ä ÄÑ#XPú\  PQÿXP#ÑÐ ÜÜ ÐCopyright ownership in a work initially vests in the author of the work. 132 If the work is a "joint work" (a work with two or more authors), the authors are co-owners of the copyright in the work. 133 Under certain circumstances, the copyright in a work is not granted to the actual preparer of the work. In the case of "works made for hire," the employer of the preparer or the person for whom the work was prepared is considered the "author" for purposes of the Copyright Act. 134 There are two types of works made for hire -- those prepared by an employee and those prepared by an independent contractor by special order or commission. The copyright in a work prepared by an employee within the scope of employment vests in the employer, and the employer is the author. 135 The copyright in a work specially ordered or commissioned vests in the person for whom the work was prepared if the work falls into one of nine specified categories and if the parties expressly agree in writing that the work will be considered a work made for hire. 136 Copyright ownership entitles the copyright owner to: ÐÔîFžö N ¦þV®^¶f!¾#&ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ„ÿ(ÔÐÐ ž° ÐÁ€Á-ÁÁexercise the exclusive rights granted under Section 106; Á€Á-ÁÁauthorize others to exercise any of those exclusive rights; and Á€Á-ÁÁprevent others from exercising any of those exclusive rights. ÐÔÂrÊ" z Ò*‚Ú2Šâ: ’"ê$B'ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ(ÔÐÐ ÜÜ ÐAn important distinction to understand is the difference between ownership of a ÃÃcopyrightÄÄ in a work and ownership of a ÃÃcopyÄÄ of a work. Ownership of a copy -- the material object in which a copyrighted work is embodied (ÃÃe.g.ÄÄ, a book, CD or videocassette) -- carries with it no interest in the copyright. 137 Ð  ÐOwnership of a copyright, or any of the exclusive rights under a copyright, is distinct from ownership of any material object in which the work is embodied. Transfer of ownership of any material object, including the copy or phonorecord in which the work is first fixed, does not of itself convey any rights in the copyrighted work embodied in the object; nor, in the absence of an agreement, does transfer of ownership of a copyright or of any exclusive rights under a copyright convey property rights in any material object. 138 Ð ÜÜ ÐOwnership, possession or any other attachment to or relationship with a copy of a copyrighted work (including obtaining access to it through a computer network or other service) does not entitle one to exercise any of the exclusive rights of the copyright owner (ÃÃe.g.ÄÄ, to reproduce it or to perform it publicly). ÃÃÑ#XPú\  PQÿXP#ÑÐ ° Ða. Transfer of Ownership ÄÄÑ#XPú\  PQÿXP#ÑÐ ÜÜ ÐCopyright ownership, or ownership of any of the exclusive rights (in whole or in part), may be transferred to one or more persons. 139 A transfer of rights must be in writing and must be signed by the transferor. 140 A transfer may occur through an assignment, exclusive license, mortgage, "or any other conveyance, alienation, or hypothecation" of a copyright or any of the exclusive rights. 141 A transfer of copyright ownership may be limited in time or in place, but it must be an exclusive transfer of whatever right or rights are involved (ÃÃi.e.ÄÄ, nonexclusive licenses are not considered transfers of ownership). 142 Any of the exclusive rights in the work 143 may be separately transferred and owned, and the owner of a particular right is considered the "copyright owner" with respect to that right. 144 In the case of any copyrighted work other than a "work made for hire," all transfers of copyright ownership (as well as all nonexclusive licenses) executed by the author of the work may be terminated by the author 35 years after the transfer. 145 This right to terminate, intended to protect authors, cannot be waived by contract or other agreement. 146 However, termination is not automatic; an author must assert his or her termination rights and comply with certain statutory requirements to regain copyright ownership. 147 ÃÃÑ#XPú\  PQÿXP#ÑÐ ° Ðb. Licensing ÄÄÑ#XPú\  PQÿXP#ÑÐ ÜÜ ÐThe exclusive rights of a copyright owner may be licensed on an exclusive basis (ÃÃi.e.ÄÄ, copyright ownership in one or more rights is transferred by the copyright owner) or on a nonexclusive basis (ÃÃi.e.ÄÄ, the copyright owner retains ownership of the copyright and may grant similar licenses to others). A nonexclusive licensee is not a copyright owner and thus does not have standing to sue for any infringement of the copyright in the work by others. 148 Unlike exclusive licenses, nonexclusive licenses need not be in writing. 149 Limitations on the exclusive rights, such as the first sale doctrine, fair use or library exemptions, may be overridden by contract. 150 However, such contract terms can be enforced only under state law. For instance, the fair use of a work (outside the scope of the license) by a licensee whose license precludes any use other than that specified by the license would not be an infringement of copyright, but would be a breach of the license agreement. Licenses and other contracts cannot transform noninfringing uses (such as fair uses) into infringements; they can, however, make such uses violations of the terms and conditions of the agreements: Ð  ÐA library that has acquired ownership of a copy is entitled [under the Copyright Act] to lend it under any conditions it chooses to impose. This does not mean that conditions on future disposition of copies or phonorecords, imposed by a contract between their buyer and seller, would be unenforceable between the parties as a breach of contract, but it does mean that they could not be enforced by an action for infringement of copyright. 151 Ð ÜÜ ÐLicensing issues are, and will continue to be, significant in the context of the development of the NII. Services on the NII will provide the opportunity for new uses for copyrighted works. If rights with respect to these new uses are not expressly granted or retained in license agreements, conflicts will arise between copyright owners and licensees. For instance, public display on a bulletin board system may not have been contemplated in licenses granting a public display right that were executed before the advent or proliferation of such systems. Some argue that new uses which were not contemplated at the time of licensing but which fall within rights granted, such as the public display example above, should automatically fall within the scope of the license. Others contend that new uses which are not contemplated and, therefore, not specifically mentioned in a grant of rights should be considered retained by the licensor -- even in the case of a complete assignment of rights. Failure to contemplate possible future developments, of course, is not a new problem, and is one based primarily in contract rather than copyright law. Whenever new technologies have produced a new use for works, courts have been called upon to decide whether the new use is covered by old licenses. 152 That is the proper jurisdiction for such determinations. License agreements must be interpreted individually and under the law of the governing state. A variety of licensing methods will be possible as the NII develops. For instance, rights in copyrighted works offered via the NII may be licensed off-line or on-line. They may be licensed directly (through individual transactions between the rightsholder and the licensee) or through other licensing arrangements, such as voluntary collective licensing. Licensing of rights may be on a per-use, per-work or other basis. The licensing of rights for the creation of multimedia works -- whose creators may wish to include dozens of preexisting works (or portions thereof) -- can be difficult. Because registration and copyright notices are not required for copyrighted works, identification of copyright owners alone can be complicated. Furthermore, the relative newness of the multimedia industry can result in an uncertainty on the part of copyright owners and multimedia creators with regard to appropriate terms and conditions for such uses. With limited exceptions, intellectual property law leaves the licensing of rights to the marketplace. In certain circumstances, particularly where transaction costs are believed to dwarf per-transaction royalties, Congress has found it necessary to provide for compulsory licenses. 153 The Working Group finds that, under current conditions, additional compulsory licensing of intellectual property rights is neither necessary nor desirable. Compulsory licensing disregards marketplace forces. Such licensing schemes treat all works alike, even though their value in a competitive marketplace would likely vary dramatically. It also treats all users alike. It alters the free market relationship between buyers and sellers. Moreover, transaction costs -- and the attendant savings from compulsory licensing -- can be minimized in a digital environment. Technology will facilitate individual licensing schemes. 154 Many projects and studies have been initiated to explore ways in which technology can be used to enhance a user's ability to identify the rightsholder of a work and license its use. The inclusion of copyright management information in copies of works will also facilitate licensing. 155 The marketplace should be allowed to develop whatever legal licensing systems may be appropriate for the NII. However, the Working Group encourages copyright owners to explore with libraries and schools special, institutional licenses. These licenses would enable the costs to be borne, for instance, by the library so that its patrons might access and use works without direct costs, as they generally do in the print domain. 156 The Working Group also endorses increased funding for libraries and educational institutions to assist their ability to purchase and license works in digital form. ÃÃÑ#XPú\  PQÿXP#ÑÐ ° Ðc. On-Line Transactions ÄÄÑ#XPú\  PQÿXP#ÑÐ ÜÜ ÐThe NII will be a conduit for many types of commercial transactions. 157 Electronic purchasing of goods facilitates the ordering, shipment, and tracking of inventory for nearly any manufactured product. Consumers increasingly will have access to on-line banking, catalogues, video tours of homes, and countless other services. Payment for these goods and services may be made through conventional methods, such as checks or credit cards, or through "digital cash" -- on-line funds transfers between a consumer's bank and an on-line provider. 158 In addition, certain NII uses of protected works will be regulated through electronic licenses. The law dealing with electronic commerce is not clear -- especially for totally paperless transactions. 159 On-line contracting and licensing raise a number of concerns about the validity and enforceability of such transactions. The NII will not be used to its fullest commercial potential if providers and consumers cannot be confident that their electronic agreements are valid and enforceable. Considering a number of different transactions that may take place on the NII helps identify where contract law is strained and the impact of this strain on NII users. Although some of the transactions identified may not involve the license or transfer of rights in a copyrighted work, examination of the principles involved in, for example, the on-line sale of copies of copyrighted works in the NII environment may provide useful background and understanding of the overall legal atmosphere for on-line transactions. à ÃÐÐOn-Line Contracts Not Involving the Sale of Goods Ä ÄÐÐAt common law, a contract is formed when the contracting parties manifest mutual, voluntary assent to be bound by a set of terms -- typically through an offer and acceptance. 160 In addition, under the "mirror image rule," the parties must agree to identical terms before a contract is formed -- the so-called "meeting of the minds." The threshold question is whether an electronic message of offer or acceptance or the simple use of the "accept" or "return" key in response to a provider's offer or consumer's request is assent. 161 A second issue is whether an electronic manifestation of assent meets the mirror image rule 162 -- that is, whether there was a meeting of the minds. If the seller provides an on-line contract form with terms that are essentially non-negotiable, then, like the "shrink wrap" licenses used by software publishers, 163 the purchaser can only accept or reject the terms. If the purchaser accepts, the mirror image rule is met. However, when a consumer assents to such a "standard form" contract, and there is no alternative source for a similar service, the result may be a contract of adhesion. 164 Assent in contracts of adhesion has been considered in the context of on-line services and shrink wrap licenses. 165 While there is no clear "rule," a traditional analysis looks to the reasonableness of terms and the applicability of the agreement's terms to similarly situated parties. 166 The status of shrink wrap licenses for software provides some guidance; however, shrink wrap licenses have not been treated consistently. 167 In some cases, the U.C.C. has been applied, thus avoiding the question of adhesion by inferring formation. 168 In addition, Illinois and Louisiana have both attempted to statutorily "validate" such shrink wrap licenses. 169 A third issue involves writing and signature requirements for certain contracts. 170 In the NII, where transactions may be entirely paperless, it may be unclear whether electronic messages are written and what will be considered an adequate signature. 171 à ÃÐÐOn-Line Sale of Goods with Conventional Delivery Ä ÄÐÐFor the sale of goods, the U.C.C. alleviates many of these common law concerns. 172 With regard to assent, the U.C.C. states that, "[a] contract for sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract."173 Likewise, "an offer to make a contract shall be construed as inviting acceptance in any manner and by any medium reasonable in the circumstances."174 Thus, application of the U.C.C. may infer assent through any reasonable conduct -- including transmission of electronic messages. Similarly, the U.C.C. loosens the requirements of the mirror image rule. The U.C.C. infers formation and focuses on establishing the contract's controlling terms. 175 The formalities necessary for enforceability are also relaxed by the U.C.C. 176 As sales of goods become more common via the NII, the U.C.C. will likely become more useful based on the flexible "course of dealing" and "usage of trade" definitions. 177 à ÃÐÐOn-line Sale of Goods with Electronic Delivery Ä ÄÐÐA third transaction is where goods are both ordered and delivered via the NII. The primary difference between goods delivered via the NII and those discussed earlier is that the goods themselves may not "exist" prior to the delivery. Rather, they are reproduced upon transmission to the buyer's computer system. Because the goods do not exist prior to the sale, the goods are considered "future goods" under the U.C.C., and remedies for breach of contract are limited. 178 à ÃÐÐOn-Line Licenses for Uses of Works Ä ÄÐÐThe licensing of copyrighted works via the NII is more problematic. Application of U.C.C. Article 2 is questionable, because the works involved may not be "goods" under the U.C.C., and because the transaction itself is not a "sale," but rather a license to use or access the work. 179 Common law principles of contract law, therefore, may apply to on-line licenses. 180 Amendment of Article 2 of the U.C.C. to cover such licensing transactions is being actively considered by the Permanent Editorial Board for the Uniform Commercial Code. 181 The challenge for commercial law, as for intellectual property law, is to adapt to the reality of the NII by providing clear guidance as to the rights and responsibilities of those using the NII. Without certainty in electronic contracting, the NII will not fulfill its commercial potential. The Working Group believes that, regardless of the type of transaction, where parties wish to contract electronically, they should be able to form a valid contract on-line. In particular, on-line licenses should be encouraged because they offer efficiency for both licensors and licensees. Moreover, state validating statutes -- similar to those used to validate shrink wrap licenses -- can be used for on-line licenses to help overcome concerns regarding adhesion; and such statutes should not be preempted as long as they do not attempt to grant rights equivalent to any of the exclusive rights within the general scope of copyright. 182 Thus, a statute that merely recognizes the validity of on-line licenses -- even those licenses which cover the exclusive rights of the copyright owner -- would not usurp Federal power and should be upheld. Further, just as the copyright law needs minor clarifications to account for new technology, so too might commercial law. Historically, the U.C.C. has been extremely successful in clarifying the law. However, as technology advances, the way in which business is conducted places strains upon the U.C.C. -- especially Article 2. Therefore, the Working Group supports the efforts presently underway to revise Article 2 of the U.C.C. to encompass licensing of intellectual property. à ÃÑ#XPú\  PQÿXP#ÑÐ Ü° Ð4. Term of Protection Ä ÄÑ#XPú\  PQÿXP#ÑÐ ÜÜ ÐGenerally, a copyrighted work is protected for the length of the author's life plus another 50 years. 183 In the case of joint works, copyright protection is granted for the length of the life of the last surviving joint author plus another 50 years. 184 Works made for hire, as well as anonymous and pseudonymous works, are protected for a term of either 75 years from the year of first publication or 100 years from the year of creation, whichever is shorter. 185 When the term of protection for a copyrighted work expires, the work falls into the "public domain." 186 à ÃÑ#XPú\  PQÿXP#ÑÐ Ü° Ð5. Notice, Deposit and Registration Ä ÄÑ#XPú\  PQÿXP#ÑÐ ÜÜ ÐPrior to the United States accession to the Berne Convention and the concomitant amendments to the Copyright Act, a copyright notice was required on all publicly distributed copies or phonorecords of works. Omission of the notice could result in the loss of copyright protection for the work. However, in 1989, the use of a copyright notice became permissive rather than required. 187 Section 401(a) of the Copyright Act provides: Ð  ÐWhenever a work protected under this title is published in the United States or elsewhere by authority of the copyright owner, a notice of copyright . . . ÃÃmayÄÄ ÃÃbeÄÄ placed on publicly distributed copies from which the work can be visually perceived, either directly or with the aid of a machine or device. 188 Ð ÜÜ ÐIf a copyright notice is used, it generally must consist of three elements: ÐÔîFžö N ¦þV®^¶f!¾#&ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ„ÿ(ÔÐÐ ž° ÐÁ€Á-ÁÁthe letter "C" in a circle (ÀÀ) or the word "Copyright" or the abbreviation "Copr." (in the case of sound recordings embodied in phonorecords, the letter "P" in a circle); Á€Á-ÁÁthe year of first publication of the work; and Á€Á-ÁÁthe name of the owner of copyright in the work. 189 ÐÔÂrÊ" z Ò*‚Ú2Šâ: ’"ê$B'ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ(ÔÐÐ ÜÜ ÐAs a general rule, two copies of a published work must be deposited in the Copyright Office within three months of publication for the benefit of the Library of Congress. 190 The Register of Copyrights may exempt categories of works from the deposit requirements. The Register may also require only one copy of the work or allow alternative forms of deposit. 191 Although required by the Copyright Act, the deposit of copies is not a prerequisite to or condition of copyright protection. Failure to deposit copies of a work after a written demand by the Register of Copyrights, however, generally results in the imposition of a fine. 192 Registration with the Copyright Office is permissive, rather than mandatory. It is not a prerequisite to the grant of exclusive rights. 193 It is, however, generally a prerequisite to the enforcement of those rights in court. 194 The copyright owner of a work (or the owner of any of the exclusive rights) may register the copyright in the work by depositing with the Copyright Office a completed application form, registration fee and a copy or copies of the work. 195 The deposit requirement under the Act may be fulfilled through the registration procedures. 196 Although not required, registration may be advisable. A certificate of copyright registration constitutes prima facie evidence of the validity of the copyright and the facts stated in the certificate, if registration is made within five years of first publication. 197 In addition, certain remedies are available in infringement suits only if registration is made prior to the date of the infringement or within three months of first publication. 198 The lack of notice and registration requirements may make it harder to differentiate between protected and unprotected works, including those in the public domain and those in which the author does not wish to claim copyright. It may also make it more difficult to identify the copyright owner. This has led some to suggest, at least with respect to works disseminated via computer networks, that one should be free to copy any work that does not contain a copyright notice and that registration should be required. While these arguments may have some merit, the balance of interests has not changed since these issues were considered by Congress and the requirements were eliminated. Conditioning copyright protection on the affixation of copyright notices and/or registration would be inconsistent with our obligations under the Berne Convention. 199 Further, the benefits of utilizing Copyright Management Information should encourage copyright owners to include or affix information historically included in copyright notices, as well as additional useful information for consumers, such as the terms and conditions for use. à ÃÑ#XPú\  PQÿXP#ÑÐ Ü° Ð6. Exclusive Rights Ä ÄÑ#XPú\  PQÿXP#ÑÐ ÜÜ ÐThe Copyright Act grants copyright owners certain exclusive rights that, together, comprise the bundle of rights known as copyright. (Limitations on the exclusive rights and infringement of the rights are discussed in subsequent sections. The fact that a particular use of a copyrighted work is said to implicate one or more of the rights, therefore, does not necessarily mean that such use is an infringement or unlawful.) The exclusive rights of the copyright owner include -- ÐÔîFžö N ¦þV®^¶f!¾#&ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ„ÿ(ÔÐÐ ž° ÐÁ€Á(1)ÁÁto reproduce the copyrighted work in copies or phonorecords; Á€Á(2)ÁÁto prepare derivative works based upon the copyrighted work; Á€Á(3)ÁÁto distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending; Á€Á(4)ÁÁin the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly; and Á€Á(5)ÁÁin the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly. 200 ÐÔÂrÊ" z Ò*‚Ú2Šâ: ’"ê$B'ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ(ÔÐÐ ÜÜ ÐThese rights, in most instances, have been well elaborated by Congress and the courts in both "conventional" and digital contexts. For the most part, the provisions of the current copyright law serve the needs of creators, owners, distributors, users and consumers of copyrighted works in the NII environment. In certain instances, small changes in the law may be necessary to ensure public access to copyrighted works while protecting the rights of the intellectual property owner. ÃÃÑ#XPú\  PQÿXP#ÑÐ ° Ða. The Right to Reproduce the Work ÄÄÑ#XPú\  PQÿXP#ÑÐ ÜÜ ÐThe fundamental right to reproduce copyrighted works in copies and phonorecords 201 will be implicated in innumerable NII transactions. Indeed, because of the nature of computer-to-computer communications, it will be implicated in most NII transactions. For example, when a computer user accesses a document resident on another computer, the image on the user's screen exists -- under contemporary technology -- only by virtue of the copy that is ÃÃreproducedÄÄ in the user's computer memory. It has long been clear under U.S. law that the placement of copyrighted material into a computer's memory is a reproduction of that material (because the work in memory then may be, in the law's terms, "perceived, reproduced, or . . . communicated . . . with the aid of a machine or device"). 202 The 1976 Copyright Act, its legislative history, the ÃÃCONTU Final ReportÄÄ, and repeated holdings by courts make it clear that in each of the instances set out below, one or more copies is made. 203 ÐÔîFžö N ¦þV®^¶f!¾#&ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ„ÿ(ÔÐÐ ž° ÐÁ€Á-ÁÁWhen a work is placed into a computer, whether on a disk, diskette, ROM, or other storage device or in RAM for more than a very brief period, a copy is made. 204 Á€Á-ÁÁWhen a printed work is "scanned" into a digital file, a copy -- the digital file itself -- is made. Á€Á-ÁÁWhen other works -- including photographs, motion pictures, or sound recordings -- are digitized, copies are made. Á€Á-ÁÁWhenever a digitized file is "uploaded" from a user's computer to a bulletin board system (BBS) or other server, a copy is made. Á€Á-ÁÁWhenever a digitized file is "downloaded" from a BBS or other server, a copy is made. Á€Á-ÁÁWhen a file is transferred from one computer network user to another, multiple copies generally are made. 205 Á€Á-ÁÁUnder current technology, when an end-user's computer is employed as a "dumb" terminal to access a file resident on another computer such as a BBS or Internet host, a copy of at least the portion viewed is made in the user's computer. Without such copying into the RAM or buffer of the user's computer, no screen display would be possible. ÃÃÑ#XPú\  PQÿXP#ÑÐÔÂrÊ" z Ò*‚Ú2Šâ: ’"ê$B'ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿE(ÔÐÐ ° Ðb. The Right to Prepare Derivative Works ÄÄÑ#XPú\  PQÿXP#ÑÐ ÜÜ ÐThe copyright law grants copyright owners the right to control the abridgment, adaptation, translation, revision or other "transformation" of their works. 206 A user who 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. ÃÃÑ#XPú\  PQÿXP#ÑÐ ° Ðc. The Right to Distribute Copies ÄÄÑ#XPú\  PQÿXP#ÑÐ ÜÜ ÐBefore 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: Ð  ÐNotwithstanding 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. 207 Ð ÜÜ ÐThis means that the copyright owner generally has only the right to authorize or prohibit the ÃÃinitialÄÄ distribution of a particular ÃÃlawfulÄÄ copy of a copyrighted work. 208 It is important to understand, however, that the distribution of an ÃÃunlawfullyÄÄ made (ÃÃi.e.ÄÄ, infringing) copy will subject any distributor to liability for infringement. 209 One court decision has construed the unauthorized downloading of digitized photographic images (whose reproduction was unauthorized) by BBS subscribers as "implicating" the distribution right. 210 The discussion in ÃÃPlayboy Enterprises IncÄÄ.Ãà v. Frena 211 reflects the reach of the distribution right with respect to infringing copies: ÄÄÐ  ÐPublic 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. ÀÀ 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 a product containing unauthorized copies of a copyrighted work. It does not matter that Defendant Frena claims it did not make the copies itself. 212 Ð ÜÜ ÐThe 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 subscriber 213 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 ÃÃPlayboyÄÄ put the issue properly in dispute or not, the right to distribute copies of a work has 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). 215 In a similar case, ÃÃSega Enterprises LtdÄÄ.Ãà v. MAPHIAÄÄ, 216 a 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. ÃÃÑ#XPú\  PQÿXP#ÑÐ ° Ðd. The Right to Perform the Work Publicly ÄÄÑ#XPú\  PQÿXP#ÑÐ ÜÜ ÐThe 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,"Ãà ÄÄit is important to understand: ÐÔîFžö N ¦þV®^¶f!¾#&ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ„ÿ(ÔÐÐ ž° ÐÁ€Á-ÁÁthe definition of "perform" in the copyright law, 218 Á€Á-ÁÁthat only "public" performances are covered by the copyright law, 219 and Á€Á-ÁÁthe limitations set out in the statute that render the performance right inapplicable in a variety of circumstances (mostly of a nonprofit nature). 220 ÐÔÂrÊ" z Ò*‚Ú2Šâ: ’"ê$B'ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ(ÔÐÐ ÜÜ ÐA distinction must be made between transmissions of ÃÃcopiesÄÄ of works and transmissions of ÃÃperformancesÄÄ or ÃÃdisplaysÄÄ 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 ÃÃwith or without copying the performanceÄÄ, 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." 222 Therefore, in the context of the NII, the fact that performances and displays may occur in diverse locations and at different times will not exempt them from the public performance and public display rights. ÃÃÑ#XPú\  PQÿXP#ÑÐ ° Ðe. The Right to Display the Work Publicly ÄÄÑ#XPú\  PQÿXP#ÑÐ ÜÜ ÐThe right to display a work publicly is extremely significant in the context of the NII. To display a work means to "show a copy of it, either directly or by means of a . . . television image, or any other device or process . . . ." 223 The complex analyses to determine whether a particular transmission might amount to a "distribution" or a "performance" are rarely necessary in this context. The definition of "display" clearly encompasses, for instance, the actions of the defendant BBS operator in the ÃÃPlayboyÄÄ case. 224 Thus, when any NII user visually "browses" through copies of works in any medium (but not through a list of titles or other "menus" that are not copies of the works), 225 a public display of at least a portion of the browsed work occurs. A display is "public" on the same terms as a performance is "public"; therefore, many NII uses would appear to fall within the law's current comprehension of "public display." 226 Whether such acts would be an infringement would be determined by separate infringement analyses. à ÃÑ#XPú\  PQÿXP#ÑÐ Ü° Ð7. Limitations on Exclusive Rights Ä ÄÑ#XPú\  PQÿXP#ÑÐ ÜÜ ÐThe copyright law provides a number of exceptions to the "exclusive" rights of copyright owners. The Copyright Act specifies that certain uses of copyrighted works are outside the control of the copyright owner. 227 While many regard these exceptions as rights of users, they are, as a technical matter, outright exemptions from liability or affirmative defenses to what would otherwise be acts of infringement. ÃÃÑ#XPú\  PQÿXP#ÑÐ ° Ða. Fair Use ÄÄÑ#XPú\  PQÿXP#ÑÐ ÜÜ ÐThe most significant and, perhaps, murky of the limitations on a copyright owner's exclusive rights is the doctrine of fair use. 228 Fair use is an affirmative defenseÃà ÄÄto an action for copyright infringement. 229 It is potentially available with respect to all manners of unauthorized use of all types of works in all media. When it exists, the user is not required to seek permission from the copyright owner or to pay a license fee for the use. The doctrine of fair use is rooted in some 200 years of judicial decisions. The most common example of fair use is when a user incorporates some portion of a pre-existing work into a new work of authorship.ÃÃÃÃ[229] 230 For example, quotation from a book or play by a reviewer, or the incidental capturing of copyrighted music in a segment of a television news broadcast is fair use. In the recent ÃÃCampbellÄÄ case, the Supreme Court expressly accepted the proposition that such "transformative" uses are more favored in fair use analyses than uses that amount to little more than verbatim copying. 231 As one moves away from such transformative uses into the area of uses that -- for practical purposes -- compete with the copyright owner's exploitation of the work, the analysis becomes more difficult (as the number of litigated cases grows). ÄÄÄÄBefore examining the doctrine developed by the courts, it is useful to examine the statutory language concerning fair use. Section 107 of the Copyright Act provides: Ð  ÐNotwithstanding the provisions of sections 106 and 106A, the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section [sic], for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include -- (1)ÁÁthe purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2)ÁÁthe nature of the copyrighted work; (3)ÁÁthe amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4)ÁÁthe effect of the use upon the potential market for or value of the copyrighted work. The fact that a work is unpublished shall not itself bar a finding of fair use if such finding is made upon consideration of all the above factors. 232 Ð ÜÜ ÐThe language may usefully be divided into two parts: the first sentence, which is largely tautological ("fair use . . . is not an infringement of copyright"), and the analysis required by the second sentence. The recitation of assorted uses in the middle of the first sentence has been held neither to prevent a fair use analysis from being applied to other "unlisted" usesÃà ÄÄnor to create a presumption that the listed uses are fair. 233 It does, however, provide some guidance on the types of activities which might be considered fair use. The core of Section 107 is the second sentence, in which Congress elaborates a test similar to that articulated by Justice Story more than 150 years ago. 234It is clear that courts must evaluate all four factors in determining whether a particular use is fair, but may also take into account unenumerated "extra" factors, when appropriate. à ÃÐÐThe Purpose and Character of the Use Ä ÄÐÐAlthough the fourth factor has repeatedly been held to be the most important of the four factors, the first factor often plays a major role in determining the result when a defendant asserts a fair use defense. The first factor contrasts "commercial" uses with "nonprofit educational" uses. There is, of course, a continuum between these two opposites, with most uses falling neatly into neither the favored nor disfavored pigeonhole. The weight of the factor may be inferred from the Supreme Court's very limited fair use jurisprudence: In the four fair use cases that it has decided, one noncommercial, noneducational use was held fair, 235two commercial uses were held unfair, 236 and one commercial use was held potentially fair. 237 In the ÃÃSonyÄÄ case, the Court announced a "presumption" that helps explain courts' near universal rejection of fair use claims in commercial contexts. It declared that all commercial uses were to be presumed unfair, 238 thus placing a substantial burden on a defendant asserting that a particular commercial use is fair. The ÃÃCampbellÄÄ case made clear that the ÃÃSonyÄÄ presumption was of greatest applicability in the context of verbatim copying, thus giving greater leeway to commercial but transformative uses. For the most part, "mere reproduction" has fared rather badly in court under the Copyright Act, even in actual and ostensible educational contexts. 239 Courts have denied fair use, 240 for example, to: ÐÔîFžö N ¦þV®^¶f!¾#&ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ„ÿ(ÔÐÐ ž° ÐÁ€Á-ÁÁa teacher's reproduction, in text materials, of the copyrighted material of another teacher; 241 Á€Á-ÁÁa school system's practice of taping educational broadcasts for later use in classrooms; 242 and Á€Á-ÁÁoff-campus copy shops' manufacture -- per teachers' specifications -- and distribution of photocopies of anthologies containing portions of textbooks and periodicals. 243 à ÃÐÐÐÔÂrÊ" z Ò*‚Ú2Šâ: ’"ê$B'ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ²(ÔÐÐ ÜÜ ÐThe Nature of the Copyrighted Work Ä ÄÐÐThis second factor tends to play a less significant role than the first in fair use litigation. Courts have held that this factor weighs in the copyright owner's favor when works of fiction 244 and unpublished works 245 are copied, and in the defendant's favor when factual works 246 and published works 247 are copied. In the NII context, it is quite possible that a court might evaluate whether a work in digital form should be treated differently from a work in a conventional print or other analog form for the purposes of evaluating this factor. à ÃÐÐThe Amount and Substantiality of the Portion Used Ä ÄÐÐThis is probably the least important factor, given that the taking of even a small amount -- if it is considered the "heart" of the work -- can lead to a finding of infringement. 248 Indeed, the most frequently cited copyright treatise devotes only four sentences to its discussion: Ð  ÐThe third factor listed in ÀÀ 107 is "the amount and substantiality of the portion used in relation to the copyrighted work as a whole." This raises an issue discussed in a preceding section [concerning the quantum of copying that constitutes infringement], and may be regarded as relating to the question of substantial similarity rather than whether the use is "fair." This includes a determination of not just quantitative, but also qualitative substantiality. In any event, whatever the use, generally it may not constitute a fair use if the entire work is reproduced. 249 à ÃÐÐÐ ÜÜ ÐThe Economic Effect of the Use Ä ÄÐÐCourts have repeatedly identified this as the most significant of the four factors. 250 It is important to recall that it weighs against a defendant not only when a current market exists for a particular use, but also when a potential market could be exploited by the copyright owner. Harm in either market will, in most instances, render a use unfair. 251 The Supreme Court's decisions demonstrate the significant weight given this factor: ÐÔîFžö N ¦þV®^¶f!¾#&ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ„ÿ(ÔÐÐ ž° ÐÁ€Á-ÁÁIn ÃÃSonyÄÄ, the absence of any market for home taping licenses, combined with the testimony of some copyright owners that they were indifferent to home copying, led the Court to conclude that there was no cognizable harm. 252 Á€Á-ÁÁIn ÃÃHarper & RowÄÄ, the Court accepted the argument that the defendant's "scooping" of "Time" magazine's right to make the first serial publication of President Ford's memoirs, which caused cancellation of the magazine's contract with Harper & Row, caused harm to the copyright owner. 253 Á€Á-ÁÁIn ÃÃStewart v. AbendÄÄ, performances of a movie palpably harmed the economic interests of the owner of the copyright in the underlying short story. 254 Á€Á-ÁÁIn ÃÃCampbellÄÄ, the Court -- because the parody was "transformative" -- rejected the court of appeals' determination that the commercial purpose of the parody required the parodist to overcome ÃÃSonyÄÄ's presumption of market harm. 255 ÐÔÂrÊ" z Ò*‚Ú2Šâ: ’"ê$B'ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ(ÔÐÐ ÜÜ ÐIt is reasonable to expect that courts would approach claims of fair use in the context of the NII just as they do in "traditional" environments. Commercial uses that involve no "transformation" by users and harm actual or potential markets will likely always be infringing, while nonprofit educational transformative uses will likely often be fair. Between these extremes, courts will have to engage in the same type of fact-intensive analysis that typifies fair use litigation and frustrates those who seek "bright lines" clearly separating the lawful from the unlawful. 256 Courts in two cases decided to date concerning the unauthorized "uploading" and "downloading" of copyrighted materials to and from bulletin board services have held that such uses were not fair uses. 257 In the ÃÃPlayboyÄÄ case, the court characterized the issue as whether "unrestricted and widespread conduct of the sort engaged in by the defendant bulletin board system operator (whether in fact engaged in by the defendant or others) would result in a substantially adverse impact on the potential market for or value of [Playboy's copyrighted photographs]," 258 and determined that it would. This, in turn, led the court to conclude that there was market harm and, thus, infringement. In the ÃÃMAPHIAÄÄ case, 259 the court found that Sega established a ÃÃprimaÄÄ ÃÃfacieÄÄ case of direct and contributory infringement in the operation of the defendant's bulletin board system (where Sega's copyrighted video game programs were uploaded and downloaded). In issuing a preliminary injunction, the court found that each of the four factors weighed against a finding of fair use, but found that the fourth factor, in particular, weighed "heavily" against such a finding: Ð  ÐBased on Defendants' own statement that 45,000 bulletin boards like MAPHIA operate in this country, it is obvious that should the unauthorized copying of Sega's video games by Defendants and others become widespread, there would be a substantial and immeasurable adverse effect on the market for Sega's copyrighted video game programs. 260 Ð ÜÜ ÐCases already decided in other contexts will give valuable guidance to courts confronted with NII-related cases. Just as courts have distinguished between home use of a VCR to make time-shifting tapes of materials broadcast over the air (fair use) and school systems' attempts to use VCRs to download broadcast instructional materials for the creation of an educational film library (not fair use), courts will subject users of copyrighted works available via the NII to like scrutiny. Educational uses that serve the same ends and are constrained in the same manner as the copying permitted under the Classroom Guidelines 261 will likely be fair, while attempts to supplant the market for books, films, software and other materials by proliferating them without permission via the NII will likely be infringing. Finally, it may be that technological means of tracking transactions and licensing will lead to reduced application and scope of the fair use doctrine. Thus, one sees in ÃÃAmerican Geophysical Union v. Texaco Inc.ÄÄ, 262 a court establishing liability for the unauthorized photocopying of journal articles based in part on the court's perception that obtaining a license for the right to make photocopies via the Copyright Clearance Center was not unreasonably burdensome. The court also speculated that should the proprietors fail to establish a licensing system for the use in question, then the balance might shift in favor of a finding of fair use. à ÃÐÐFair Use Guidelines for Libraries and Educational Institutions Ä ÄÐÐThe fair use, library copying and educational use provisions of the current copyright law have been the subject of four sets of "guidelines" for libraries and educational institutions, to which contending parties agreed, that are enshrined at various places in the legislative history. 263 The result has been, in certain circumstances, a quantitative gloss on the construction of fair use and library copying privileges. For instance, the classroom guidelines generally permit the copying, for educational purposes, of short extracts of works, provided that the copying is spontaneously done or requested by the instructor (and the copies are neither used nor re-made repeatedly over time). 264 à ÃÐÐThe Conference on Fair Use Ä ÄÐÐTo determine whether educational or library guidelines of a similar nature might prove attainable in the NII context, the Working Group has convened a conference of more than 60 interested parties who have met more or less monthly since September 1994. To date, no formal guidelines have been the subject of agreement, but it appears reasonable to anticipate that drafts now in preparation may be formalized as guidelines before the end of 1995. The participants in the conference are discussing several areas, including multimedia, library preservation, "browsing" and "distance learning." In most such instances, current law often provides clear rules while the "digital difference" tests, bends or sometimes breaks those rules. For example, library preservation is covered in some detail in the analog context (paper, microfiche, etc.) in Section 108 of the law, but that section's terms do not appear to encompass digital copying in the quantities to which libraries have become accustomed, 265 and many conventional distance learning issues are arguably covered -- with respect to the performance but not the reproduction of works -- in Section 110. Some participants have suggested that the United States is being divided into a nation of information "haves" and "have nots" and that this could be ameliorated by ensuring that the fair use defense is broadly generous in the NII context. The Working Group rejects the notion that copyright owners should be taxed -- apart from all others -- to facilitate the legitimate goal of "universal access." 266 Should the participants in the Conference on Fair Use fail to agree on appropriate guidelines, the Working Group may conclude that the importance of such guidelines may necessitate regulatory or legislative action in that area. ÃÃÑ#XPú\  PQÿXP#ÑÐ ° Ðb. Library Exemptions ÄÄÑ#XPú\  PQÿXP#ÑÐ ÜÜ ÐSection 108 of the Copyright Act provides that in certain circumstances and under certain conditions it is not an infringement of copyright for a library or archives, or its employees acting within the scope of their employment, 267 to reproduce or distribute one copy or phonorecord of a work 268 under circumstances that would typically not amount to fair use. The conditions of the library exemption are that (1) the reproduction or distribution must be made without any purpose of direct or indirect commercial advantage; (2) the collections of the library must be open to the public or available not only to researchers affiliated with the library, but also to other persons doing research in a specialized field; (3) the reproduction or distribution of the work must include a notice of copyright; 269 and (4) a specific exemption in subsections (b) through (g) of Section 108 applies. The exemptions granted under Section 108 extend only to isolated and unrelated reproduction of a single copy or phonorecord of the same material on separate occasions, 270 and do not apply to (1) musical works; (2) pictorial, graphic, or sculptural works; or (3) motion pictures or other audiovisual works, except news programs. 271 The circumstances under which a library may reproduce or distribute a copyrighted work without infringement liability include: à ÃÐÐArchival Copies Ä ÄÐÐA library may reproduce and distribute a copy or phonorecord of an unpublished work reproduced in facsimile form if the sole purpose is preservation and security, and if the copy or phonorecord reproduced is currently in the collection of the library. 272 The House Report notes that this right "would extend to any type of work, including photographs, motion pictures and sound recordings." However, the copy or phonorecord made must be in "facsimile form." A library may "make photocopies of manuscripts by microfilm or electrostatic process, but [may] not reproduce the work in 'machine-readable' language for storage in an information system." 273 Thus, this exemption does not allow for preservation in electronic or digital form. à ÃÐÐReplacement Copies Ä ÄÐÐA library may reproduce a published work duplicated in facsimile form solely for the purpose of replacing a copy or phonorecord that is damaged, deteriorated, lost or stolen, if the library has, after reasonable efforts, determined that an unused replacement cannot be obtained at a fair price. 274 Again, the copy or phonorecord made must be in "facsimile form." The exemption does not allow for replacement of a published work by reproduction in digital form (at least when the original copy of the published work was not in digital form). à ÃÐÐArticles and Short Excerpts for Users Ä ÄÐÐA library may make and distribute a copy of one article or other contribution to a copyrighted collection or periodical issue, or a copy or phonorecord of a small part of any other copyrighted work at the request of a user, subject to two conditions. 275 First, the copy or phonorecord must become the property of the user, and the library or archives must have no notice that the copy or phonorecord will be used for any purpose other than private study, scholarship, or research. Second, the library or archives must prominently display a warning of copyright at the place where orders are accepted and on its order form. 276 à ÃÐÐOut-of-Print Works for Scholarly Purposes Ä ÄÐÐA library may make and distribute a copy or phonorecord of an entire work if it has determined that a copy or phonorecord of the copyrighted work cannot be obtained at a fair price, subject to two additional conditions. 277 First, the copy or phonorecord must become the property of the user, and the library or archives must have no notice that the copy or phonorecord will be used for any purpose other than private study, scholarship, or research. Second, the library or archives must prominently display a warning of copyright at the place where orders are accepted and on its order form. 278 à ÃÐÐNews Programs Ä ÄÐÐA library may reproduce and distribute by lending a limited number of copies of an audiovisual news program. 279 à ÃÐÐInterlibrary Loan Ä ÄÐÐThe Copyright Act allows a library to make single copies of copyrighted works and to enter into interlibrary arrangements, but prohibits copying "in such aggregate quantities as to substitute for a subscription to or purchase of [a copyrighted] work." 280 CONTU offered its offices to the interested parties -- copyright owners, educators and libraries -- to develop guidelines to interpret the quoted phrase. The parties were successful in defining when such copying for the purpose of "borrowing" was not done in such aggregate quantities as to substitute for the subscription to or purchase of a work. These so-called CONTU Guidelines were later included in the Conference Report on the Copyright Act of 1976. 281 The guidelines provide that a library may "borrow" not more than five copies per year of articles from the most recent five years of any journal title. 282 The CONTU Guidelines have been an effective means to protect both the interests of copyright owners and to provide libraries a clear "safe" guide to follow in "borrowing" from other libraries. 283 In 1976, there were no readily available systems for the supply of single copies of, or for the licensing of the reproduction of multiple copies of copyrighted works. Now, that situation has changed and the continuing evolution of the NII will permit the establishment of licensing systems to supply copies or to permit users to make reproductions of works or portions of works more widely available. Indeed, a publisher's license to access or download all or a portion of the aggregated copyrighted works on a server might be viewed as the on-line equivalent of a subscription. A publisher might allow free access to a table of contents and then through an appropriate payment mechanism such as electronic cash or a credit card, license the downloading of a single article. This "publication on demand" might become an effective and economic substitute for interlibrary loan on the NII. While the precise nature of all such systems cannot be known at this time, it is clear that the CONTU Guidelines, while remaining effective for print materials, cannot readily be generalized to "borrowing" electronic publications. The Working Group emphasizes that the existence of systems for the supply of licensed copies of works or portions of works by electronic means does not negate the privileges conferred on libraries in Section 108(g)(2), nor do they limit "borrowing" permitted under existing voluntarily negotiated guidelines or such guidelines to set rules for interlibrary loan via the NII that may be negotiated in the future. 284 While it is clear that Section 108 does not authorize unlimited reproduction of copies in digital form, it is equally clear that Section 108(g)(2) permits "borrowing" in electronic form for interlibrary loan in the NII environment, so long as such "borrowing" does not lead to "systematic" copying. However, the existence of such licensing systems in a world of electronic publishing may make it difficult, if not impossible, to define "subscription or purchase" as intended, and equally impossible to apply the existing guidelines to all electronic transactions. Therefore, new scenarios should be considered to avoid ambiguity and to continue to protect both the interests of copyright owners and to continue to provide libraries with a safe "borrowing" guide. Such scenarios are being considered in the on-going Conference on Fair Use. Should the parties fail to reach agreement in that forum, as noted earlier, a regulatory or legislative solution may be appropriate. Appropriate use of such electronic publishing systems by libraries can provide a ready means for avoiding not only liability for "borrowing" that exceeds that which is permitted under Section 108(g)(2) or any voluntarily negotiated guidelines developed by the concerned parties but also any need to devote resources to consider whether the À@ÀnthÀ:À transaction is 'safe." ÃÃÑ#XPú\  PQÿXP#ÑÐ ° Ðc. First Sale Doctrine ÄÄÑ#XPú\  PQÿXP#ÑÐ ÜÜ ÐA fundamental tenet of copyright law, and another limitation on the exclusive rights, is the "first sale doctrine," which prevents an owner of copyright in a work from controlling subsequent transfers of copies of that work. Once the copyright owner transfers ownership of a particular copy (a material object) embodying a copyrighted work, the copyright owner's exclusive right to distribute copies of the work is "extinguished" with respect only to that particular copy. 285 Ð  ÐSection 109(a) of the Copyright Act provides: Notwithstanding the provisions of section 106(3) [which grants copyright owners the exclusive right to distribute copies or phonorecords of a work], 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. 286 Ð ÜÜ ÐThis limitation on the copyright owner's distribution right allows wholesalers who buy books to distribute those copies to retailers and retailers to sell them to consumers and consumers to give them to friends and friends to sell them in garage sales and so on -- all without the permission of (or payment to) the copyright owner of the work. The first sale doctrine allows the owner of a particular copy of a work to dispose of possession of that copy in any way -- for example, by selling it, leasing it, loaning it or giving it away. However, there is an exception to this exemption with respect to two types of works -- computer programs and sound recordings. The owner of a particular copy of a computer program or a particular phonorecord of a sound recording may not rent, lease or lend that copy or phonorecord for the purpose of direct or indirect commercial advantage. 287 These exceptions were enacted because of the ease with which reproductions of those works can be made at a lower cost than the original with minimum degradation in quality. 288 The rationale for these exceptions may apply to other types of works as more types of works become available in digital form and the "nexus" of rental and reproduction of those works "may directly and adversely affect the ability of copyright holders to exercise their reproduction and distribution rights under the Copyright Act." 289 This provision of the first sale doctrine limits only the copyright owner's distribution right; it in no way affects the reproduction right. Thus, the first sale doctrine does not allow the transmission of a copy of a work (through a computer network, for instance), because, under current technology the transmitter retains the original copy of the work while the recipient of the transmission obtains a reproduction of the original copy (ÃÃi.e.ÄÄ, a ÃÃnewÄÄ copy), rather than the copy owned by the transmitter. The language of the Copyright Act, the legislative history and case law make clear that the doctrine is applicable only to those situations where the owner of a particular copy disposes of physical possession of that particular copy. 290 If the owner of a particular copy transmits a copy to another person without authorization (either from the copyright owner or the law), such a transmission would involve an unlawful reproduction of a work, and the first sale doctrine would not shield the transmitter from liability for the reproduction nor for the distribution. Under the first sale doctrine, the owner of a particular copy of a copyrighted work may distribute it, but may not reproduce it. 291 Therefore, the transmission would constitute infringement of the copyright owner's reproduction right. 292 If the reproduction is unlawful, further distribution of the unlawful reproduction would not be allowed under the first sale doctrine because the copy distributed would not be one "lawfully made" under the Copyright Act, as required by the statute. The requirement that copies distributed under the doctrine be "lawfully made" under the Copyright Act does not limit the doctrine's application to copies made or authorized by the copyright owner. 293 A copy could be "lawfully made," for example, if the reproduction is lawful under the fair use provision; the distribution of such a copy would be permitted within the limits of the first sale doctrine. It has also been suggested that the scope of the first sale doctrine be ÃÃnarrowedÄÄ to exclude copies obtained via transmission. This would mean, for instance, that if a copy of a literary work is legally purchased on-line and the copy so purchased is downloaded onto the purchaser's disk, the disk could not be resold. Clearly, the first sale doctrine should apply if the particular copy involved is in fact the copy that is further distributed, even if the copy was first obtained by transmission. Further, if the technology utilized allows the transmission of a copy without making an unlawful reproduction -- ÃÃi.e.ÄÄ, no copy remains with the original owner -- the first sale doctrine would apply and the transmission would not be an infringement. Some argue that the first sale doctrine should also apply to transmissions, as long as the transmitter destroys or deletes from his or her computer the original copy from which the reproduction in the receiving computer was made. The proponents of this view argue that at the completion of the activity, only one copy would exist between the original owner who transmitted the copy and the person who received it -- the same number of copies as at the beginning. However, this zero sum gaming analysis misses the point. The question is not whether there exist the same number of copies at the completion of the transaction or not. The question is whether the transaction when viewed as a whole violates one or more of the exclusive rights, and there is no applicable exception from liability. In this case, without any doubt, a reproduction of the work takes place in the receiving computer. To apply the first sale doctrine in such a case would vitiate the reproduction right. A copyright owner's exclusive right to publicly display copies of a work is also limited by Section 109: Ð  ÐNotwithstanding the provisions of section 106(5) [which grants copyright owners the exclusive right to display publicly copies of a work], the owner of a particular copy lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to display that copy publicly, either directly or by the projection of no more than one image at a time, to viewers present at the place where the copy is located. 294 Ð ÜÜ ÐThus, an art gallery that purchases a painting may publicly display it without liability. The owner of a particular copy of an electronic audiovisual game intended for use in coin-operated equipment may also publicly perform or display that game in that equipment. 295 This exemption from liability would not apply to the public display of a copy of a work on a bulletin board system or other computer or communications network, because more than one image would likely be displayed at a time (to different viewers) and viewers would not be "present at the place where the copy is located." The first sale doctrine allows the owner of a particular, lawfully-made copy of a work to dispose of it in any manner, with certain exceptions, 296 without infringing the copyright owner's exclusive right of distribution. It seems clear that the first sale model -- in which the copyright owner parts company with a tangible copy -- should not apply with respect to distribution by transmission, because transmission by means of current technology involves both the reproduction of the work and the distribution of that reproduction. In the case of transmissions, the owner of a particular copy of a work does not "dispose of the possession of ÃÃthatÄÄ copy or phonorecord." A copy of the work remains with the first owner and the recipient of the transmission receives another copy of the work. ÃÃÑ#XPú\  PQÿXP#ÑÐ ° Ðd. Educational Use Exemptions ÄÄÑ#XPú\  PQÿXP#ÑÐ ÜÜ ÐSection 110(1) exempts from infringement liability the performance or display of a copyrighted work in the course of face-to-face teaching activities by a non-profit educational institution in a classroom or similar setting. 297 Section 110(2) exempts from liability the transmission of a performance or display of a copyrighted work if (1) the performance or display is a regular part of the systematic instructional activities of the non-profit educational institution; (2) the performance or display is directly related and of material assistance to the teaching content of the transmission; and (3) the transmission is made primarily for reception in classrooms or similar places or by persons to whom the transmission is directed because of their disabilities. 298 Like the library exemptions, the educational use exemptions are provided in addition to the fair use and other general exemptions, which are also available to educational institutions. ÃÃÑ#XPú\  PQÿXP#ÑÐ ° Ðe. Other Limitations à ÃÄÄÑ#XPú\  PQÿXP#ÑÐÐÐ ÜÜ ÐReproduction of Computer Programs Ä ÄÐÐThe rights of an owner of a copyright in a computer program are limited such that the owner of a particular copy of a computer program may make a copy or adaptation of the program as an "essential step" in using the computer program in a computer or for archival purposes. 299 This limitation applies only with respect to "owners" of copies of programs, not licensees, borrowers or mere possessors. à ÃÐÐCertain Performances and Displays Ä ÄÐÐCertain performances and displays are exempt from infringement liability under Section 110 of the Copyright Act, including: ÐÔîFžö N ¦þV®^¶f!¾#&ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ„ÿ(ÔÐÐ ž° ÐÁ€Á-ÁÁthe performance or display of certain works in the course of religious services; 300 Á€Á-ÁÁthe performance of certain works by governmental or non-profit agricultural or horticultural organizations; 301 Á€Á-ÁÁthe performance of certain musical works in retail outlets for the sole purpose of promoting retail sales; 302 Á€Á-ÁÁthe transmission of performances of certain works to disabled persons; 303 and Á€Á-ÁÁthe performance of certain works at non-profit veterans' or fraternal organizations for charitable purposes. 304 ÐÔÂrÊ" z Ò*‚Ú2Šâ: ’"ê$B'ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ(ÔÐÐ ÜÜ ÐThe "communication of a transmission embodying a performance or display of a work by the public reception of the transmission on a single receiving apparatus of a kind commonly used in private homes" is also exempted if there is no direct charge to see or hear the transmission and the transmission is not further transmitted to the public. 305 This exemption allows proprietors to play radios or televisions (ÃÃi.e.ÄÄ, to perform or display copyrighted works in those radio or television transmissions) in public establishments such as restaurants, beauty shops and bars. 306 The applicability of this exemption is extremely fact-specific and what qualifies as a type of receiving apparatus "commonly used in private homes" will certainly change as home equipment merges (into, for example, radio/television/computer units) and becomes more sophisticated. à ÃÐÐEphemeral Recordings Ä ÄÐÐSection 112 provides that it is not an infringement of copyright for a "transmitting organization" that has the right to transmit to the public a performance or display of a work "to make no more than one copy or phonorecord of a particular transmission program embodying the performance or display" under certain conditions. 307 à ÃÐÐCompulsory Licenses Ä ÄÐÐSections 111 and 119 are compulsory licensing provisions that allow cable systems and satellite operators to retransmit copyrighted programming without infringement liability if they pay a statutory licensing fee (which is then distributed among the copyright owners of the programming retransmitted). 308 A compulsory license under Section 111 is only available to a "cable system," which is defined as "a facility . . . that in whole or in part receives signals transmitted or programs broadcast by one or more television broadcast stations . . . ." A compulsory license under Section 111 generally would not be available with respect to NII transmissions because case law and regulations make clear that the term "cable system" does not encompass facilities such as those used for computer network transmissions. 309 Similarly, the compulsory license under Section 119 would not be available unless the transmitting entity qualified as a "satellite carrier" and met the other statutory criteria. 310 Compulsory licenses are also available for the public performance of nondramatic musical works by means of jukeboxes, 311 for the use of certain works in connection with noncommercial broadcasting, 312 and for the reproduction and distribution of nondramatic musical works in the course of making and distributing phonorecords of such works. 313 à ÃÑ#XPú\  PQÿXP#ÑÐ Ü° Ð8. Copyright Infringement Ä ÄÃÃÐ ° Ða. General ÄÄÑ#XPú\  PQÿXP#ÑÐ ÜÜ ÐAnyone who, without the authorization of the copyright owner, exercises any of the exclusive rights of a copyright owner, as granted and limited by the Copyright Act, is an infringer of copyright. 314 Thus, any activity that falls within the scope of the exclusive rights of the copyright owner is an infringement and the infringer is liable, unless it is authorized by the copyright owner or is excused by a defense (such as fair use) or an exemption. 315 For purposes of this discussion of infringement, the lack of such authorization, defense or exemption is generally presumed. Copyright infringement is determined without regard to the intent or the state of mind of the infringer; "innocent" infringement is infringement nonetheless. 316 Moreover, although the exclusive rights refer to such rights with respect to "copies" (plural) of the work, 317 there is no question that under the Act the making of even a single unauthorized copy may constitute an infringement. 318 Courts generally use the term "copying" as shorthand for a violation of any of the exclusive rights of the copyright owner (not just the reproduction right). Courts usually require a copyright owner to prove ownership of the copyrighted work and "copying" by the defendant to prevail in an infringement action. Since there is seldom direct evidence of copying (witnesses who actually saw the defendant copy the work, for instance), a copyright owner may prove copying through circumstantial evidence establishing that the defendant had access to the original work and that the two works are substantially similar. Other indications of copying, such as the existence of common errors, have also been accepted as evidence of infringement. 319 The copying of the copyrighted work must be copying of protected expression and not just ideas; 320 likewise, the similarity between the two works must be similarity of protected elements (the expression), not unprotected elements (the facts, ideas, etc.). The portion taken must also be more than ÃÃdeÄÄ ÃÃminimisÄÄ. The similarity between the two works need not be literal (ÃÃi.e.ÄÄ, phrases, sentences or paragraphs need not be copied verbatim); substantial similarity may be found even if none of the words or brush strokes or musical notes are identical. 321 Various tests have been developed to determine whether there has been sufficient non-literal copying to constitute substantial similarity between a copyrighted work and an allegedly infringing work. 322 Judge Learned Hand articulated the well-known "abstractions test," where the expression and the idea are, in essence, treated as ends of a continuum, with infringement found if the allegedly infringing work crosses the line delineating the two. 323 Such a line, as Judge Hand recognized, is not fixed in stone; indeed, as he put it, its location must "inevitably be ÃÃadÄÄ ÃÃhoc ÄÄ. . . ." 324 The "pattern" test has also been suggested, where infringement is found if the "pattern" of the work is taken (in a play, for instance, the "sequence of events, and the development of the interplay of characters"). 325 The "subtractive" test -- which dissects the copyrighted work, disregards the noncopyrightable elements, and compares only the copyrightable elements of the copyrighted work to the allegedly infringing work -- has been the traditional method for determining substantial similarity. 326 Following the 1970 Ninth Circuit decision in ÃÃRoth Greeting Cards v. United Card CoÄÄ., 327 the "totality" test became popular for determining substantial similarity. The totality test compares works using a "total concept and feel" standard to determine whether they are substantially similar. Although chiefly used by the Ninth Circuit in the 1970s and 1980s, 328 the test was used by other circuits as well. The Ninth Circuit further defined an "extrinsic/intrinsic" test in proof of substantial similarity in ÃÃSid & Marty Krofft Television Productions, Inc. v. McDonald's CorpÄÄ. 330 The intrinsic portion of the test measures whether an observer "would find the total concept and feel of the works" to be substantially similar. 331 The extrinsic portion of the test, meanwhile, is an objective analysis of similarity based on "specific criteria that can be listed and analyzed." 332 Thus, this test requires substantial similarity "not only of the general ideas but of the expressions of those ideas as well." 333 More recently, however, both the Ninth and Second Circuits have moved away from the totality test, particularly with respect to computer applications. In ÃÃData East USA, IncÄÄ.Ãà v. Epyx, IncÄÄ., 334 the Ninth Circuit rediscovered "analytic dissection of similarities" in the substantial similarity determination of video games. 335 Similarly, the Second Circuit, in ÃÃComputer Associates International, IncÄÄ.Ãà v. Altai, IncÄÄ., 336 fashioned an "abstraction-filtration-comparison test" for a computer program that combined Judge Learned Hand's "abstraction" test (to separate ideas from expression) and "filtration" reminiscent of traditional "subtraction" analysis in distinguishing protectible from non-protectible material. In addition to the evolution of substantial similarity tests, there is disagreement as to the appropriate "audience" for determining substantial similarity. The "ordinary observer test" -- alluded to in ÃÃArnstein v. Porter 338 and followed in a number of Second Circuit decisions 339 -- considers the question of substantial similarity from the viewpoint of the "average lay observer." 340 The Fourth Circuit, however, set forth a modified test in Dawson v. Hinshaw Music IncÄÄ., 341 requiring the ordinary observer to be the "intended" audience for the particular work. Relying on decisions by both the Ninth and Seventh Circuits, 342 the court in ÃÃDawsonÄÄ stated: Ð  Ð[i]f the lay public fairly represents the intended audience, the court should apply the lay observer formulation of the ordinary observer test. However, if the intended audience is more narrow in that it possesses specialized expertise, . . . the court's inquiry should focus on whether a member of the intended audience would find the two works to be substantially similar. 343 Ð ÜÜ ÐThe challenge of this test, especially in more advanced technologies, is determining when, if ever, a work is not directed to an audience possessing specialized expertise, and at what point a work once intended for a specialized audience becomes accepted by the general public. The ability to manipulate works in digital form raises an issue with respect to infringement of the reproduction and derivative works rights. A copyrighted photograph, for instance, can be manipulated in the user's computer in such a way that the resulting work is not substantially similar to the copyrighted work (in fact, it may bear little or no resemblance to the copyrighted work upon which it was based). The initial input of the copyrighted work into the user's computer may be an infringement of the copyright owner's reproduction right, but the infringing (or noninfringing) nature of the resulting work is less clear. Although courts traditionally rely on a "substantial similarity" test to determine infringement liability -- including with regard to the derivative works right -- neither the meaning of "derivative work" nor the statutory standard for infringement appears to require an infringing derivative work to be substantially similar. 344 ÃÃÑ#XPú\  PQÿXP#ÑÐ ° Ðb. Infringing Importation ÄÄÑ#XPú\  PQÿXP#ÑÐ ÜÜ ÐThe exclusive right to distribute copies or phonorecords includes the right to limit the importation of copies or phonorecords of a work acquired outside the United States into the U.S. without the authority of the copyright owner. 345 Such unauthorized importation, whether it be of pirated items (ÃÃi.e.ÄÄ, "copies or phonorecords made without any authorization of the copyright owner") 346 or "gray market" products (ÃÃi.e.ÄÄ, those copies or phonorecords legally produced overseas for foreign distribution, but not authorized for the U.S. market), 347 is an infringement of the distribution right. 348 There are three exceptions to the importation right, which include a "suitcase" exception that exempts importation for the private use of the importer of one copy of a work at a time or of articles in the personal baggage of travelers entering the United States. 349 The applicability of the importation provisions to the transmission of works into the United States via the NII (or GII) may be debated. Nevertheless, the importation right is an outgrowth of the distribution right, both of which refer to "copies or phonorecords." 350 A data stream can contain a copyrighted work in the form of electronic impulses, but those impulses do not fall within the definition of "copies" or "phonorecords." Therefore, it may be argued that the transmission of a reproduction of a copyrighted work via international communication links fails to constitute an "importation" under the current law, just as it is less than clear that a domestic transmission of a reproduction of a work constitutes a distribution of a copy under a literal reading of the Copyright Act. 351 ÃÃÑ#XPú\  PQÿXP#ÑÐ ° Ðc. Contributory and Vicarious Liability ÄÄÑ#XPú\  PQÿXP#ÑÐ ÜÜ ÐDirect participation in infringing activity is not a prerequisite for infringement liability, as the Copyright Act grants to copyright owners not only the right to exercise the exclusive rights, but also the right "to authorize" the exercise of those rights. The inclusion of the right "to authorize" was "intended to avoid any questions as to the liability of contributory infringers" -- those who do not directly exercise the copyright owner's rights, but "authorize" others to do so. 352 Other than the reference to a copyright owner's right "to authorize" exercise of the exclusive rights, however, the Copyright Act does not mention or define "contributory infringement" or "vicarious liability," the standards for which have developed through case law. 353 If someone has the "right and ability" to supervise the infringing action of another, and that right and ability "coalesce with an obvious and direct financial interest in the exploitation of copyrighted materials -- even in the absence of actual knowledge" that the infringement is taking place -- the "supervisor" may be held vicariously liable for the infringement. 354 Vicarious liability is based on a connection to the direct infringer (not necessarily to the infringing activity). The best known copyright cases involving vicarious liability are the "dance hall" cases, where vicarious liability was found when dance hall owners allowed the unauthorized public performance of musical works by the bands they hired, even when the owners had no knowledge of the infringements and had even expressly warned the bands not to perform copyrighted works without a license from the copyright owners. 355 "Contributory infringement" may be found when "one who, with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another." 356 Contributory infringement is based on a connection to the infringing activity (not necessarily to the direct infringer). A contributory infringer may be liable based on the provision of services or equipment related to the direct infringement. 357 à ÃÐÐServices Ä ÄÐÐLiability may be based on the provision of services related to the infringement. Courts have found contributory infringement liability, for instance, when a defendant chose the infringing material to be used in the direct infringer's work, 358 and vicarious liability when a defendant was responsible for the day-to-day activities where the infringement took place. 359 à ÃÐÐEquipment Ä ÄÐÐInfringement liability may also be based on the provision of equipment or other instrumentalities or goods used in or related to the infringement. 360 However, the Supreme Court in ÃÃSony CorpÄÄ.Ãà v. Universal City Studios, IncÄÄ., 361 a 5 to 4 decision, held that the manufacturer of videocassette recorders was not a contributory infringer for providing the equipment used in the unauthorized reproduction of copyrighted works. Borrowing a patent law principle, the Court reasoned that manufacturers of staple articles of commerce that are capable of substantial noninfringing uses should not be held liable as contributory infringers. 362 The Court held: Ð  Ð[T]he sale of copying equipment, like the sale of other articles of commerce, does not constitute contributory infringement if the product is widely used for legitimate, unobjectionable purposes. Indeed, it need merely be capable of substantial noninfringing uses. 363 Ð ÜÜ ÐThe Court determined that the key question was whether the videocassette recorder was "capable of commercially significant noninfringing uses." 364 The Court also held that in an action for contributory infringement against a manufacturer of copying devices, "the copyright holder may not prevail unless the relief that he seeks affects only his programs, or unless he speaks for virtually all copyright holders with an interest in the outcome." 365 Other cases against producers or providers of the instrumentalities of infringement since ÃÃSonyÄÄ generally have not been successful. 366 However, the court in the recent ÃÃSegaÄÄ case 367 issued a preliminary injunction against a BBS operator who sold special copiers, the "only substantial use" of which was to copy Sega's copyrighted video games. 368 The court found that Sega established a ÃÃprimaÄÄ ÃÃfacieÄÄ case of contributory infringement by the BBS operator based on the operator's "advertising, sale and distribution" of the video game copiers. 369 ÃÃÑ#XPú\  PQÿXP#ÑÐ ° Ðd. On-Line Service Provider Liability ÄÄÑ#XPú\  PQÿXP#ÑÐ ÜÜ ÐThere is a view that on-line service providers, such as bulletin board operators, should be exempt from liability or given a higher standard for liability, such as imposing liability only in those cases where infringement was willful and repeated or where it was proven that the service provider had both "actual knowledge" of the infringing activity and the "ability and authority" to terminate such activity. The latter proposed standard would combine the contributory infringement standard with the requirements for vicarious liability and apply it to all infringements (including direct infringements) of the service provider. Altering the standards of liability for infringement would be a significant departure from current copyright principles and law and would result in a substantial derogation of the rights of copyright owners. It is a difficult issue, with colorable arguments on each side. 370 Copyright law imposes different standards of liability for direct, contributory and vicarious liability. Direct infringers are held to a standard of strict liability. Liability for direct infringement is, therefore, generally determined without regard to the intent of the infringer. 371 However, the Copyright Act gives courts the discretion to consider the innocent intent of the infringer in determining the amount of damages to be awarded. 372 Related infringers -- those found to be contributory infringers or vicariously liable -- are not held to strict liability, but rather to a higher threshold for liability. 373 Arguments made by service providers wishing exemption or a higher standard for liability include: that the volume of material on a service provider's system is too large to monitor or screen; that even if a service provider is willing and able to monitor the material on its system, it cannot always identify infringing material; that failure to shield on-line service providers will impair communication and availability of information; that exposure to liability for infringement will drive service providers out of business, causing the NII to fail; and that the law should impose liability only on those who assume responsibility for the activities their subscribers (and, presumably, they) engage in on their system. It is estimated by some that trillions of bits representing millions of messages and files travel through networks each day. Of course, only a percentage of those appear on any given service provider's system. Nevertheless, it is still virtually impossible for operators of large systems to contemporaneously review every message transmitted or file uploaded. On-line service providers are not alone in this position. Millions of photographs are taken to photo finishers each day by individual consumers. It is virtually impossible for these service providers to view any of those works before they are reproduced from the undeveloped film. Yet, they operate under strict liability standards. 374 Likewise, book sellers, record stores, newsstands and computer software retailers cannot possibly read all the books, listen to all the records, review all the newspapers and magazines or analyze all the computer programs that pass through their establishments for possible infringements. Yet, they may be held strictly liable as distributors if the works or copies they deal in are infringing. Further, while it may be argued that a bit is a bit and infringing bits are indistinguishable from authorized ones, and that discovery of infringing material may be made more difficult if the title or other identifying information is removed or altered, on-line service providers can certainly investigate and take appropriate action when notified of the existence of infringing material on their systems and thus limit their liability for damages to those for innocent infringement. Again, this problem has been a part of the cost of doing business for many other distributors of material that is provided to them by others. 375 Clearly, on-line service providers play an integral role in the development of the NII and facilitate and promote the free exchange of ideas. 376 But that has not been grounds for removing or reducing liability for copyright infringement. One can perform these functions without infringing or facilitating the infringement of the copyrighted expression of others. On-line service providers have a business relationship with their subscribers. They -- and, perhaps, only they -- are in the position to know the identity and activities of their subscribers and to stop unlawful activities. 377 And, although indemnification from their subscribers may not reimburse them to the full extent of their liability and other measures may add to their cost of doing business, they are still in a better position to prevent or stop infringement than the copyright owner. Between these two relatively innocent parties, the best policy is to hold the service provider liable. The on-line services provide subscribers with the capability of uploading works because it attracts subscribers and increases usage -- for which they are paid. Service providers reap rewards for infringing activity. It is difficult to argue that they should not bear the responsibilities. We are not aware that cost/benefit analyses have prompted service providers to discontinue such services. The risk of infringement liability is a legitimate cost of engaging in a business that causes harm to others, and that risk apparently has not outweighed the benefits for the more than 60,000 bulletin board operators currently in business. 378 There has been tremendous growth in the on-line service industry over the past several years, and it shows no signs of reversing the trend under current standards of liability. Other entities have some of the same costs of doing business, have instituted practices and taken appropriate precautions to minimize their risk of liability, such as indemnification agreements and insurance. The Supreme Court has stated: Ð  ÐIntention to infringe is not essential under the Act. And knowledge of the particular selection to be played or received is immaterial. One who hires an orchestra for a public performance for profit is not relieved from a charge of infringement merely because he does not select the particular program to be played. Similarly, when he tunes in on a broadcasting station, for his own commercial purposes, he necessarily assumes the risk that in doing so he may infringe the performing rights of another. 379 Ð ÜÜ ÐDuring the deliberations preceding enactment of the 1976 general revision of the Copyright Act, changes to the standards of liability were "considered and rejected." 380 For instance, Congress was asked to alter the standard for vicarious liability for business owners whose independent contractors directly infringed the public performance right in copyrighted works (such as owners of dance halls). 381 Ð  ÐA well-established principle of copyright law is that a person who violates any of the exclusive rights of the copyright owner is an infringer, including persons who can be considered related or vicarious infringers . . . . The committee has decided that no justification exists for changing existing law, and causing a significant erosion of the public performance right. 382 Ð ÜÜ ÐCongress also determined that the innocent infringer provision, which allows reduction of damages for innocent infringers "is sufficient to protect against unwarranted liability in cases of occasional or isolated innocent infringement, and it offers adequate insulation to users, such as broadcasters and newspaper publishers, who are particularly vulnerable to this type of infringement suit." 383 Congress believed that "by establishing a realistic floor for liability, the provision preserves its intended deterrent effect; and it would not allow an infringer to escape simply because the plaintiff failed to disprove the defendant's claim of innocence." 384 Commentators have supported Congress' decision: Ð  ÐInnocent intent should no more constitute a defense in an infringement action than in the case of conversion of tangible personalty. In each case the injury to a property interest is worthy of redress regardless of the innocence of the defendant. Moreover, a plea of innocence in a copyright action may often be easy to claim and difficult to disprove. Copyright would lose much of its value if third parties such as publishers and producers were insulated from liability because of their innocence as to the culpability of the persons who supplied them with the infringing material. 385 Ð ÜÜ ÐInfringement may be alleged against service providers, such as BBS operators, in NII-related cases. As noted earlier, the court in ÃÃPlayboy 386 found the BBS operator directlyÄÄ liable for the display of the unauthorized copies on the service, as well as the distribution of unauthorized copies to subscribers. The court held: Ð  ÐThere is irrefutable evidence of direct copyright infringement in this case. It does not matter that [the operator] 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 . . . . 387 Ð ÜÜ ÐIn ÃÃSega Enterprises LtdÄÄ.Ãà v. MAPHIAÄÄ, 388 the court issued a preliminary injunction against the BBS operator, finding a ÃÃprimaÄÄ ÃÃfacieÄÄ case was established for both ÃÃdirectÄÄ infringement, based on the BBS operator's permitting the uploading of the copyrighted games onto the BBS, and ÃÃcontributoryÄÄ infringement, based on the operator's "role in copying [Sega's copyrighted video games], including provision of facilities, direction, knowledge and encouragement." 389 At least two other relevant cases are pending -- one against a commercial on-line service provider 390 and another against an uploading subscriber, a BBS operator and an Internet access provider. 391 The Working Group believes it is -- at best -- premature to reduce the liability of any type of service provider in the NII environment. On-line service providers currently provide a number of services. With respect to the allowance of uploading of material by their subscribers, they are, in essence, acting as an electronic publisher. In other instances, they perform other functions. No one rule may be appropriate. If an entity provided only the wires and conduits -- such as the telephone company, it would have a good argument for an exemption if it was truly in the same position as a common carrier and could not control who or what was on its system. 392 The same could be true for an on-line service provider who unknowingly transmitted encrypted infringing material. It would be unfair -- and set a dangerous precedent -- to allow one class of distributors to self-determine their liability by refusing to take responsibility. This would encourage intentional and willful ignorance. Whether or not they choose to reserve the right to control activities on their systems, they have that right. Service providers expect compensation for the use of their facilities -- and the works thereon -- and have the ability to disconnect subscribers who take their services without payment. They have the same ability with respect to subscribers who break the law. Exempting or reducing the liability of service providers prematurely would choke development of marketplace tools that could be used to lessen their risk of liability and the risk to copyright owners, including insuring against harm caused by their customers, 393 shifting responsibility for infringement to the infringing subscriber through indemnification and warranty agreements, licensing (including collective license agreements), educating their subscribers about infringement and using technological protections, such as tracking mechanisms. Circumstances also vary greatly among service providers. A bulletin board is simply a computer that the owner allows to be accessed by others using their computers and modems. One needs only a personal computer, a modem, a phone line, and some software to go into business -- at a cost of less than $2,000. There are small, non-profit and large, commercial operators. There are those that try to prevent and react when notified and those that encourage infringing activity. Different service providers play different roles -- and those roles are changing and being created virtually every day. At this time in the development and change in the players and roles, it is not feasible to identify ÃÃaÄÄ ÃÃprioriÄÄ those circumstances or situations under which service providers should have reduced liability. However, it is reasonable to assume that such situations could and should be identified through discussion and negotiation among the service providers, the content owners and the government. We strongly encourage such actions in the interest of providing certainty and clarity in this emerging area of commerce. Implementation of preventative measures, compliance with the law, and development of technological mechanisms to guard against infringement must be encouraged. Service providers should have incentive to make their subscribers more aware of copyright law and to react promptly and appropriately to notice by copyright owner that infringing material is available on their systems. Service providers should make clear that infringing activity is not tolerated on the system and reserve the right to remove infringing material or disconnect the subscriber who participated in the placement of it on the system. ÃÃÑ#XPú\  PQÿXP#ÑÐ ° Ðe. Civil Remedies ÄÄÑ#XPú\  PQÿXP#ÑÐ ÜÜ ÐVarious remedies are available to copyright owners in infringement actions. A copyright owner may seek a preliminary or permanent injunction to prevent or restrain infringement. 394 Courts generally grant permanent injunctions where liability is established and there is a threat of continuing infringement. 395 Courts may also order the impounding of all copies or phonorecords at any time an action is pending. 396 As part of a final judgment, the court may order the destruction (or any other "reasonable disposition") of the infringing copies or phonorecords. 397 At any time before final judgment is rendered, a copyright owner may elect to recover actual damages and profits of the infringer or be awarded statutory damages. 398 Actual damages may be awarded in the amount of the copyright owner's losses plus any profits of the infringer attributable to the infringement (that are not taken into account in the calculation of the losses). 399 Statutory damages may be awarded in an amount between $500 to $20,000 per work infringed. 400 If an infringer can show that he or she was not aware and had no reason to believe that the activity constituted an infringement, the court may find there was an innocent infringement. 401 Such a finding is a factual determination, and does not absolve the defendant of liability for the infringement. 402 It does, however, give the court discretion to reduce the amount of damages awarded to the copyright owner. 403 If a copyright owner can show that the infringement was willful, the court may increase statutory damages up to a maximum of $100,000. 404 An infringement may be found to be willful if the infringer had knowledge that the activity constituted infringement or recklessly disregarded the possibility of infringement. 405 Courts have discretion to allow the recovery of full costs by or against any party other than the United States or its officer. 406 Courts may also award reasonable attorney's fees to the prevailing party under certain circumstances. 407 ÃÃÑ#XPú\  PQÿXP#ÑÐ ° Ðf. Criminal Offenses ÄÄÑ#XPú\  PQÿXP#ÑÐ ÜÜ ÐCriminal sanctions are levied against infringers if the infringement was willful and for purposes of commercial advantage or private financial gain. 408 Criminal proceedings must begin within three years after the criminal action arose. Where there is a conviction, the court must order the forfeiture and destruction or other disposition of all infringing copies and "all implements, devices, or equipment" used in the manufacture of the infringing copies. 409 A recent court decision demonstrates that the current law is insufficient to prevent flagrant copyright violations in the NII context. In ÃÃUnited States v. LaMacchiaÄÄ, 410 a university student provided clandestine BBS locations on the Internet for the receipt and distribution of unauthorized copies of commercially published, copyrighted software. Because he sought no profit from his actions -- actions that caused substantial economic harm to copyright owners -- he could not be charged under the current criminal provisions of the copyright law, and the court dismissed an indictment charging him with wire fraud, on the ground that his acts did not violate the wire fraud statute. 411 (There would appear, nevertheless, to be every reason to believe that he had committed many civil infringements.) The Copyright Act also makes certain non-infringements criminal acts, including: ÐÔîFžö N ¦þV®^¶f!¾#&ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ„ÿ(ÔÐÐ ž° ÐÁ€Á-ÁÁthe placement, with fraudulent intent, of a copyright notice that a person knows to be false on any article; 412 Á€Á-ÁÁthe public distribution or importation for public distribution, with fraudulent intent, of any article containing a copyright notice the distributor or importer knows to be false; 413 Á€Á-ÁÁthe removal or alteration, with fraudulent intent, of any notice of copyright on a copy of a copyrighted work; 414 and Á€Á-ÁÁfalse representation, with knowledge, of a material fact in an application for copyright registration or in any written statement filed in connection with an application. 415 ÃÃÑ#XPú\  PQÿXP#ÑÐÔÂrÊ" z Ò*‚Ú2Šâ: ’"ê$B'ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿE(ÔÐÐ ° Ðg. Defenses ÄÄÑ#XPú\  PQÿXP#ÑÐ ÜÜ ÐThe Supreme Court has stated that "[a] successful defense of a copyright infringement action may further the policies of the Copyright Act every bit as much as a successful prosecution of an infringement claim by the holder of the copyright." 416 There are a number of legal and equitable defenses available to defendants in copyright infringement actions. Fair use is the most common of the defenses. 417 Others include misuse of copyright by the copyright owner, 418 abandonment of copyright, 419 estoppel, collateral estoppel, laches, ÃÃres judicataÄÄ, acquiescence, and unclean hands. Generally, a claim of innocent infringement is not a defense against a finding of infringement. An innocent infringer is liable for the infringement, but a court may reduce -- or, in some instances, remit altogether -- the amount of damages. 420 However, under certain, specified circumstances, a good faith reliance on a presumption that the term of protection had expired is a complete defense to an infringement action. 421 As noted earlier, certain uses do not rise to the level of infringement, such as reproduction of a ÃÃdeÄÄ ÃÃminimisÄÄ portion of a work. 422 In those cases, the plaintiff will not be able to sustain its burden of proof and no defense will be necessary. 423 In other cases, a defendant may successfully assert that the activity is noninfringing due to the existence of a license -- statutory, negotiated or implied. 424 All of these defenses are available in the NII environment. For instance, one or more of these defenses, such as fair use or the existence of an implied license, may be successful where a copyright owner's posting to an automatic electronic mail distribution list ("listserv") is reproduced and distributed to the subscribers of that same listserv in connection with a response to or comment on the posting. à ÃÑ#XPú\  PQÿXP#ÑÐ Ü° Ð9. International Implications Ä ÄÃÃÐ ° Ða. Background ÄÄÑ#XPú\  PQÿXP#ÑÐ ÜÜ ÐOther countries -- including Australia, Canada, Finland, France, Germany, Japan, Singapore, Sweden, the United Kingdom -- and the European Union are conducting their own studies on their planning for implementation of their national information infrastructures. At the February 1995 G-7 Ministerial Meeting on the Global Information Infrastructure (GII), the Ministers noted that unless rules for the effective protection of intellectual property are taken into account from the outset, the development of the international information superhighway will be severely hindered. How disparate domestic information infrastructures will evolve into a GII will depend on the rules of the road, and one of the most important sets of rules will be those ensuring protection for the works of intellectual property that move through international channels and into the emerging national information infrastructures. As a result, Ministers endorsed the need to work in international fora, including the World Intellectual Property Organization (WIPO), to achieve standards for the adequate and effective protection of intellectual property in international electronic commerce. Development of the GII will make copyright laws and international copyright rules a concern for every user. When the globe is blanketed with digital information dissemination systems, a user in one country will be able to manipulate information resources in another country in ways that may violate that country's copyright laws. Indeed, it may be difficult to determine where and when possible infringements may take place because, under the present level of development, a user in France can access a database in the United States and have a copy downloaded to a computer in Sweden. Whose copyright law would apply to such a transaction? Because copyright laws are territorial, and the standards of protection embodied in the international conventions leave room for national legislative determinations, acts that may constitute infringement in one country may not be an infringement in another country. The complexity that such a system creates will make "electronic commerce" over the information superhighways difficult unless the United States moves promptly to identify needs for protection and initiates efforts to work toward a new level of international copyright harmonization. U.S. copyright industries are significant contributors to the United States' current trade accounts, reducing our balance of payments deficit by some $45.8 billion in 1993. Inadequacies in the present system of intellectual property protection for copyrights and neighboring 425 or related rights, and the consequent losses to these industries from piracy and from trade barriers arising from differences in forms of protection, have been estimated by industry to cost them $15 to 17 billion annually. Improved protection for copyrights and neighboring rights would contribute to reducing these losses and improving the balance of payments. 426 An important aspect of the participation of foreign entities through a GII in the U.S. domestic information infrastructure is the provision of adequate and effective intellectual property protection in the country wishing to participate. To the extent that participation in the NII can be linked to the provision of intellectual property protection, it will promote the ability of U.S. businesses to use the NII and the GII to disseminate works to foreign consumers via other countries' information infrastructures. If commercial enterprises are to make full use of the capabilities of the NII to communicate and deliver information and entertainment products, there must be assurances that their intellectual property rights will be protected effectively under strong copyright laws in all countries participating in a GII. In considering linkages, careful consideration will have to be given to obligations under international intellectual property treaties and other international agreements, such as the North American Free Trade Agreement (NAFTA) and the World Trade Organization (WTO) Agreement on the Trade-Related Aspects of Intellectual Property (TRIPs Agreement), especially in view of the various intellectual property and market access provisions in those agreements. ÃÃÑ#XPú\  PQÿXP#ÑÐ ° Ðb. International Framework ÄÄÑ#XPú\  PQÿXP#ÑÐ ÜÜ ÐIn the 1970's, then-U.S. Register of Copyrights Barbara Ringer observed that if Justice Story considered copyright to be the metaphysics of the law, then international copyright is its cosmology. That message is brought home to us in 1995 by the need to evaluate the applicability of copyright in the context of the complexities of international commerce in information and entertainment products via advanced information infrastructures. First, one must understand that there is no such thing as an international copyright, but rather, there is an international system that sets norms for protection to be implemented in national laws. Several international treaties link together the major trading nations and establish both minimum standards for protecting, under their own laws, each others' copyrighted works and the basis upon which protection is to be extended (ÃÃe.g.ÄÄ, national treatment). The situation is further complicated because there are two major legal traditions applicable to the protection of what the United States regards as copyrighted works. To understand the complexities of the international copyright law system and the international treaties, it is necessary to have a basic appreciation of these two major legal regimes. 427 The United States and other countries that follow the Anglo-American or common law legal tradition have "copyright" systems in which the principal focus is on promoting the creation of new works for the public benefit by protecting the author's economic rights. This is seen as part of the basic "social contract" between the State and its citizens. This theory is reflected in the patent and copyright clause in Article 1, Section 8, clause 8 of the U.S. Constitution. The thesis is that providing such protection will induce the creation of more works which will "promote the progress of science" and redound to the public benefit. History has validated this principle which benefits the public as well as creators of copyrighted works. Countries that follow the civil law tradition, however, regard authors' rights as natural human rights, or part of one's right of personality. As a part of this tradition, in addition to the protection of the author's economic rights, the protection of the author's "moral rights" is an essential part of the system. 428 Moral rights, as reflected in Article 6ÃÃbis ÄÄof the Berne Convention, include the right of an author to be named as the author of a work and the right to object to uses of the work which could bring dishonor or discredit on the author's reputation. Often, in civil law systems, moral rights reflect a part of the author's personality and are non-transferable, and may be not waivable. Economic rights, in some instances, may be subordinated to moral rights. Under these systems, only works which are original, in that they reflect the personality of the author, are entitled to authors' rights protection. Productions that do not meet this originality requirement, but still merit some protection, are protected under a system of "neighboring rights." Needless to say, with such divergent theoretical bases, the copyright and the authors' rights systems are sometimes in conflict. One of these areas of conflict is in the nature and level of rights for owners of neighboring rights. Neighboring rights are similar to the rights protected by copyright or authors' rights and are applied to protect the rights of producers of phonograms, performers and broadcasters. Under the copyright system, many of the rights covered under neighboring rights are protected as copyright rights. For example, under the U.S. copyright law, sound recording producers and performers are regarded as joint authors of sound recordings. Under ÃÃdroitÄÄ ÃÃd'auteurÄÄ (or authors' rights) systems, such producers' and performers' rights would be protected as neighboring rights. Neighboring rights, while similar in economic character to authors' rights, may be protected at a lower level than authors' rights and are entirely separate and distinct from the higher-level rights granted to authors. ÃÃÑ#XPú\  PQÿXP#ÑÐ ° Ðc. International Treaties and Agreements à ÃÄÄÑ#XPú\  PQÿXP#ÑÐÐÐ ÜÜ ÐThe World Intellectual Property Organization (WIPO) Ä ÄÐÐWIPO is responsible for the administration of, and activities concerning revisions to, the international intellectual property treaties. 429 The principal WIPO copyright and neighboring rights conventions include the Berne Convention for the Protection of Literary and Artistic Works (Paris 1971) (Berne Convention), 430 the International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations (Rome Convention), 431 and the Geneva Convention for the Protection of Producers of Phonograms Against the Unauthorized Reproduction of their Phonograms (Geneva Phonograms Convention). 432 UNESCO 433 and WIPO jointly administer the Universal Copyright Convention (Paris 1971), 434 which is a lower-level copyright convention that was negotiated in the years following World War II largely to bring the United States into the world of international copyright. Virtually all of the members of the Universal Copyright Convention are also members of the Berne Convention, and by the terms of the conventions the Berne Convention governs relations between members of both. The Berne Convention is the principal international copyright convention and includes the most detailed provisions. In 1989, the United States joined the Berne Convention, which is the largest copyright convention. 435 While it is generally regarded as providing adequate international standards of protection, some believe that it should be updated to account for advances in electronic communications and information processing technology. Its members come from the world's major legal traditions -- the Anglo-American common law copyright system and the European civil law ÃÃdroit d'auteurÄÄ system. However, despite its level of detail, as previously noted, and in part because it must accommodate differing legal traditions, in some areas its standards may be insufficient to deal with the world of digital dissemination of copyrighted works. The principal treaty for the protection of neighboring rights, the Rome Convention, was adopted in 1961, and is considered by many to include standards that are inadequate for dealing with the problems raised by current technological advances and the level of trade in the products and subject matter affected by its operation. It provides for the protection of producers of phonograms against unauthorized reproduction of their phonograms, for performers to prevent certain reproductions and fixations of their performances and it provides limited rights for broadcasting organizations. The Rome Convention requires that these rights endure for a period of 20 years. It also provides for protection against certain "secondary uses" of phonograms, such as broadcasting, but it contains the ability for members to reserve, or decline to implement, this right. The United States is not a signatory to the Rome Convention. The Geneva Phonograms Convention provides for the protection of phonograms against unauthorized reproduction and distribution for a minimum term of 20 years. It does not require signatories to provide a performance right in sound recordings. The United States belongs to the Geneva Phonograms Convention. WIPO has convened a Committee of Experts on a Possible Protocol to the Berne Convention to account for developments since the 1971 revision of the Convention, and a Committee of Experts on a Possible New Instrument for the Protection of Performers and Producers of Phonograms to consider how to provide improved rights for performers and producers of phonograms. à ÃÐÐThe World Trade Organization (WTO) Ä ÄÐÐIn addition to the traditional WIPO forum, other international fora now have a significant role in intellectual property policy formulation. The TRIPs Agreement, concluded during the recent Uruguay Round Negotiations, is administered by the World Trade Organization (WTO). The TRIPs Agreement sets significant standards for the protection of copyright and related rights. Perhaps most importantly, it contains provisions to ensure that parties to the TRIPs Agreement fully implement obligations under it. After defining the relationship between the TRIPs Agreement and the Berne Convention, the TRIPs Agreement reiterates the basic principle of copyright protection -- that protection extends only to expression and not to ideas, methods of operation, or mathematical concepts. 436 Article 10 of the TRIPs Agreement confirms that all types of computer programs are "literary works" under the Berne Convention, and requires each WTO country to protect them as such. It also requires copyright protection for compilations of data or other material that are original by reason of their selection or arrangement. Article 11 of the TRIPs Agreement requires member countries to provide exclusive rights for authors or their successors in title to authorize or to prohibit commercial rental to the public of originals or copies of their copyrighted works for at least computer programs and cinematographic works. The obligation as to rental rights for cinematographic works need not be implemented unless rental has led to widespread copying that is having a material effect on the author's exclusive right of reproduction. Article 12 of the TRIPs Agreement provides minimum standards for the term of protection for copyrighted works. The term of protection for most works is the life of the author plus 50 years, but whenever the term of protection is not linked to the life of a person, it must be a minimum of fifty years, except for works of applied art or photographs. Article 9(2) of the Berne Convention bars imposition of limitations on, or exceptions to, the reproduction right except when such limits or exceptions do not conflict with a normal exploitation of the work and do not unreasonably prejudice the legitimate interests of the right holder. Article 13 of the TRIPs Agreement widens the scope of this provision to all exclusive rights in copyright and related rights, thus narrowly circumscribing the limitations and exceptions that WTO member countries may impose. 437 Article 14 of the TRIPs Agreement goes beyond the obligations of the Rome Convention and the Geneva Phonograms Convention and requires member countries to provide sound recording producers a 50ÀVÀyear term of protection and the rights to authorize or prohibit the direct or indirect reproduction and commercial rental of their sound recordings. However, a WTO member country that on April 15, 1994, had a system of payment of equitable remuneration to compensate for rental of recordings is permitted to keep that system. 438 The Agreement requires WTO countries to make it possible for performers to prevent unauthorized sound recording or reproduction of their live performances. Broadcasting organizations are to be accorded similar rights, although member countries have the option of providing protection consistent with the Rome Convention or providing owners of copyright in works broadcast the right to prevent the same acts. The Agreement also makes Article 18 of the Berne Convention regarding copyright protection of existing works applicable to sound recordings. ÃÃÑ#XPú\  PQÿXP#ÑÐ ° Ðd. Copyright Compared to Authors' Rights ÄÄÑ#XPú\  PQÿXP#ÑÐ ÜÜ ÐCountries with common-law copyright systems such as the United States, and countries with authors' rights systems such as those in Europe, have in some cases defined the rights of certain categories of right holders differently. For instance, European performers, both in audiovisual works and in sound recordings, enjoy certain statutory rights that U.S. performers do not. In the United States, these performers rights are guaranteed under contractual or collective bargaining agreements between the audiovisual producers and the performers' unions. Broadcasters have been concerned that harmonization of protection along European lines might have implications for the establishment of performance rights in sound recordings. A consequence of this divergence is that U.S. performers and producers have been denied the ability to share in remuneration for the use of their products and performances in some countries. ÃÃÑ#XPú\  PQÿXP#ÑÐ ° Ðe. National Treatment ÄÄÑ#XPú\  PQÿXP#ÑÐ ÜÜ ÐThe principle of national treatment is the cornerstone of the great international intellectual property treaties -- Berne and Paris. It also has been the keystone of international trade treaties, such as the General Agreement on Tariffs and Trade and the recently established WTO. It is of enormous significance to our copyright industries. As a general matter, the principle of national treatment means that under a nation's laws, a foreigner enjoys no lesser rights and benefits than a citizen of that nation receives, subject to the specific terms of the relevant international conventions. In copyright terms, it means, for example, that a German work for which copyright enforcement is sought in the United States would be treated under U.S. law exactly as if it were a U.S. work. Some argue, however, that intellectual property rights should be granted only on the basis of reciprocity. The concept of "material reciprocity" means that the United States should grant a right to a foreigner only if his or her country grants U.S. citizens the same right. Under this scenario, the work of a German citizen would only be able to obtain protection under the U.S. law to the extent that German law provided the same, or at least equivalent, protection to works of a U.S. citizen. à ÃÐÐThe Berne Convention Ä ÄÐÐArticle 5(1) and 5(2) of the Berne Convention establish the principle of national treatment for works protected by copyright. 439 Under Article 5(1), there is an obligation to grant to nationals of countries of the Berne Union national treatment in respect of the rights specifically covered by the Convention. This point is not disputed. 440 However, with respect to any new rights which may be hereafter granted, some have taken the position that the national treatment obligation applies only to the minimum rights in the Convention. 441 à ÃÐÐThe Rome Convention Ä ÄÐÐThe fundamental problem with the Rome Convention is that, while it generally imposes a national treatment obligation, it permits a number of reservations and exceptions that allow a Member to avoid that obligation for important rights otherwise provided for in the Convention. Article 3.1 of the TRIPs Agreement provides that "[i]n respect of performers, producers of phonograms and broadcasting organizations, this obligation [national treatment] only applies in respect of the rights provided under this Agreement." 442 It also provides that a Member may avail itself of the "possibilities provided in . . . paragraph 1(b) of Article 16 of the Rome Convention . . ." relating to reciprocity for the broadcasting right in respect of phonograms. 443 à ÃÐÐThe TRIPs Agreement Ä ÄÐÐAdditionally, the TRIPs Agreement includes a national treatment obligation. 444 In respect of copyright the TRIPs national treatment provision incorporates the standards of the Berne Convention, but in respect of neighboring rights, it allows members to impose the exceptions to national treatment permitted by the Rome Convention. 445 Permitting such exceptions can lead to problems in the implementation of a GII. à ÃÐÐThe NAFTA Ä ÄÐÐThe NAFTA includes a very broad national treatment provision that does not include the possibility of making the broad exceptions provided for under the TRIPs agreement. 446 ÃÃÑ#XPú\  PQÿXP#ÑÐ ° Ðf. Private Copying Royalty Systems ÄÄÑ#XPú\  PQÿXP#ÑÐ ÜÜ ÐThe manner in which portions of the audio and video private copying royalties collected in some European countries are distributed to claimants may prove to be an impediment to future development of the GII if a similar approach is adopted in respect of digital information dissemination systems. To illustrate, France's Law of July 3, 1985 (1985 Law) establishes a system of neighboring rights protection for performers, audiovisual communication enterprises, producers of phonograms and producers of videograms. The 1985 Law, ÃÃinter aliaÄÄ, grants specified categories of right holders an entitlement to equitable remuneration in respect of the private copying of their works. Some of the 1985 law's provisions are based on reciprocity and thus discriminate against, for example, foreign motion picture interests. Consequently, those provisions may be inconsistent with France's obligations under the Berne Convention and the Universal Copyright Convention, at least to the extent that they apply to Berne or UCC protected subject matter and rights. If this pattern is followed in implementing future legislation, serious impediments to the development of the GII may arise. ÃÃÑ#XPú\  PQÿXP#ÑÐ ° Ðg. Moral Rights ÄÄÑ#XPú\  PQÿXP#ÑÐ ÜÜ ÐThe author's moral rights are provided for under Article 6ÃÃbisÄÄ of the Berne Convention which requires recognition of the right of an author to be named as the author of a work (the right of paternity) and the right for an author to object to uses of a work which would bring dishonor or discredit on his or her reputation (the right of integrity). 447 The controversy over moral rights was one of the reasons that kept the United States out of the Berne Convention for over a century. However, during that time our legal regime evolved and when the United States finally joined Berne, the Congress determined that no changes to U.S. law were necessary to comply with the moral rights provisions of Article 6ÃÃbisÄÄ. Congress found that the existing panoply of remedies available under U.S. common law, various state statutes and Federal laws provided sufficient moral rights protection. These findings were explicitly stated in the Berne Convention Implementing Act. 448 When the Congress was convinced that enhanced protection for moral rights was necessary, legislation was passed. 449 For the United States, the question is what should be the scope of moral rights under our law. What is the appropriate role for Federal and state legislation? There are even serious Constitutional questions about the possible scope of moral rights legislation that could be part of our Federal copyright law. Such rights would have to be seen as promoting the progress of science and useful arts. They would have to be viewed as part of the Constitutional ÃÃquid pro quoÄÄ of providing protection in order to promote creativity. Some have argued that such a justification may prove difficult to make. ÁÁEven among Berne members, the nature and scope of moral rights varies considerably from country to country, but regardless of their scope and extent, moral rights are typically not transferable and sometimes, may not be waived. The fact that these rights are non-waivable may create difficulties for the commercialization of works in the GII environment. A current report of the multimedia study committee of the Japanese Institute for Intellectual Property suggests that there may be a need either to permit the specific waiver of the right of integrity or to limit its application in the digital world. 450 ÃÃÑ#XPú\  PQÿXP#ÑÐ ° Ðh. Conflict of Laws ÄÄÑ#XPú\  PQÿXP#ÑÐ ÜÜ ÐConflict of laws issues may arise in GII-related copyright infringement actions. Resolution of these issues determines what country's law the court should apply. If the infringer and the infringement are in the United States, the U.S. Copyright Act would apply. However, different situations may present themselves which will raise conflict issues. For instance, users in country A, where certain actions are not considered copyright infringements, may use works located on servers in country B, where such actions are. Which country's law controls the resolution of a copyright infringement dispute -- the country from which a copyrighted work is uploaded or to which it is downloaded, or the country where the host server is located? In the case of direct transmissions, which country's law applies -- the country of origin of the transmission or the transmitter, or the country of the reception? It may be that rights of the copyright owner are exercised in each country. These issues, however, may be no more problematic than the current conflict issues that arise due to the use of telephones, fax machines or modems in international commerce. ÃÃÑ#XPú\  PQÿXP#ÑÐ ° Ði. Harmonization of International Systems ÄÄÑ#XPú\  PQÿXP#ÑÐ ÜÜ ÐThere is little dispute that worldwide high-speed digital communications networks will have an enormous effect on the way in which works of authorship will be created, stored, communicated to the public, distributed and paid for. The communication revolution is now bringing new opportunities and new challenges to creators and users of intellectual property. The full implementation of the NII and the GII will have an immense effect on our economy, and implementation of such systems internationally will have an equally broad impact on world-wide commerce. The United States must be committed to finding the means to preserve the integrity of intellectual property rights in the materials that will flow in the commerce created in this environment. This is a daunting challenge in the context of the U.S. domestic market. It is an even greater challenge to lay an international groundwork which will ensure adequate and effective protection throughout the world. As we move toward a world where dissemination of entertainment and information products through on-demand delivery services operating through interactive digital information communications networks is the norm, it may be necessary to harmonize levels of protection under disparate systems of copyright, authors' rights and neighboring rights, and consideration should be given to ways to bridge the gaps among these systems. If the GII is to flourish, then the intellectual property rights that will undergird the economic structure supporting these infrastructures must unequivocally be granted in national legislation fully on the basis of national treatment for ÃÃallÄÄ rights and benefits. However, there is some controversy over the scope of the national treatment obligation under the Berne Convention and its application to what some may regard as newly created rights and subject matter. Similar questions arise under other international copyright and neighboring rights conventions as will be later discussed. The United States is committed to making progress in WIPO toward improving international protection for works protected by copyright and authors rights and the subject matter of neighboring rights. Such progress is essential, especially in view of the needs to deal with the intellectual property issues associated with the emerging GII. The transition into a world-wide information society demands both a narrowing of the focus on specific issues in the cases of the Berne Protocol and the New Instrument, and the expansion of the WIPO efforts to encompass the digital world in both areas. In the emerging world of the GII with its digital distribution systems and multimedia works, distinctions among the rights of authors, producers and performers that are the basis for the separation of copyright and neighboring rights are rapidly becoming irrelevant. This new world of information superhighways will mean economic growth, jobs, and exports for all economies to the benefit of authors, producers and performers. Governments need to consider carefully the implications of the inevitable development of the GII for their national economies and their copyright systems. The work in WIPO is relevant to the rapidly emerging digital world of the GII in order to set sound policy, and select the essential elements of the present Berne Protocol and New Instrument texts and work toward reaching international agreement on them. Discussions on a Berne Protocol and New Instrument afford an opportunity to consider what enforcement norms, beyond the broadly applicable disciplines clearly established in the TRIPs text, will be necessary if rightsholders are to be adequately protected in the NII/GII environment. Thus, rather than replicate the TRIPs enforcement provisions -- which would be redundant and would create the very real possibility of conflicting norms -- work on a Berne Protocol and New Instrument should focus on issues not addressed in TRIPs, such as protection of rights management information, the use of technical security measures and the prohibition of devices and services whose primary purpose or effect is to defeat technical security measures. One of the most important issues for international norm setting is to define the nature of a dissemination of a work or a transmission of a work in digital form. Is it a public performance of the work or a reproduction and distribution? Can it be all at the same time? How do rules concerning the right of importation apply in a digital environment? Just as these questions are critical in the domestic context, they are equally acute in the context of international treaties and harmonization of levels of protection. The right to distribute copies of a work by transmission should be included both in the Berne Protocol and the New Instrument, perhaps as a separate right, as an aspect of a distribution right, as part of a right of communication to the public, or an aspect of the reproduction right. While this is an issue that needs much further discussion, the United States believes that such a right is an important part of the Berne Protocol and New Instrument which would be aimed at meeting the needs of the emerging GII. Provisions to prohibit decoders and anti-copy prevention devices and services also should be included in the Berne Protocol and the New Instrument. 451 The Protocol and the New Instrument should also include a prohibition of the fraudulent inclusion of rights management information and the fraudulent removal or alteration of such information. 452 To permit the effective development of the GII, national treatment must be the basis for protection in any intellectual property agreement. At an absolute minimum, national treatment must apply to the minimum obligations established in any agreement in WIPO. The author or rights holder should be able to realize fully the economic benefits flowing from the free exercise of his or her rights in any country party to the Protocol or New Instrument. The United States continues to believe that, in respect of any work, this is required by Article 5 of the Berne Convention. To do otherwise in either a Berne Protocol or another agreement on copyright protection would be contrary to Article 20 because it would be a derogation of rights existing under Berne and would not be an Agreement to "grant to authors more extensive rights than those granted by the Convention, or contain other provisions not contrary to this Convention" as provided for under Article 20. 453 To the extent that it has been agreed that the principles of the New Instrument should follow those of the Berne Convention, to do otherwise in respect of related rights would be contrary to the letter and the spirit of the Convention. U.S. copyright legislation has granted rights that some other nations may regard as new rights beyond those set forth in the Berne Convention -- for example, rental rights in computer programs, sound recordings, and musical works embodied in sound recordings -- and has done so exclusively on the basis of national treatment. The United States has instituted a system of royalties on blank digital audio recording media and digital audio recorders. Benefits from these rights have all been granted on the basis of full national treatment. The United States believes that this is consistent with our obligations under the Berne Convention and other international intellectual property and trade treaties and agreements. The author or rights holder should be able to realize fully the economic benefits flowing from the free exercise of his or her rights in any country participating in a GII. This is required by Article 5 of the Berne Convention. To do otherwise in either a Berne Protocol or another agreement on copyright protection would be contrary to Article 20 because it would be a derogation of rights existing under Berne and not be an Agreement to "grant to authors more extensive rights than those granted by the Convention, or contain other provisions not contrary to this Convention" as provided for under Article 20. To protect new works or to grant new rights in respect of new or presently protected works on the basis of reciprocity, would be contrary to the letter and the spirit of the Convention. As the GII continues to develop through the international interconnection of NIIs, rules must be formulated to protect the economic rights of providers of entertainment and information products. Such rules should be based on principles of national treatment along the lines of the following: ÐÔîFžö N ¦þV®^¶f!¾#&ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ„ÿ(ÔÐÐ ž° ÐÁ€Á1.ÁÁEach country participating in the GII must accord to nationals of another country participating in the GII no less favorable treatment than it accords to its own nationals with regard to all rights and benefits now, or hereafter, granted under its domestic laws in respect of literary and artistic works or fixations 454 embodying such works. Á€Á2.ÁÁBenefits must include the same possibility to exploit and enjoy rights in the national territory of a country participating in the GII as the respective country grants to its own nationals. Á€Á3.ÁÁNo country participating in the GII may, as a condition of according national treatment, require rights holders to comply with any formalities in order to acquire rights in respect of literary and artistic works or fixations embodying such works. ÐÔÂrÊ" z Ò*‚Ú2Šâ: ’"ê$B'ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ(ÔÐÐ ÜÜ ÐIn addition to these issues of general concern, there are issues that are applicable specifically to the Berne Protocol and to the New Instrument. Following the Supreme Court decision in the ÃÃFeistÄÄ case, 455 there is increasing concern that many valuable, factually-oriented databases may be denied copyright protection, or that courts may determine infringement in ways that severely limit the scope of copyright protection for data bases. Providing for a ÃÃsuiÄÄ ÃÃgenerisÄÄ unfair extraction right to supplement copyright protection may prove to be useful in view of legal developments in various national laws and should be given serious consideration. How a right, such as the unfair extraction right proposed in the EU database directive, could protect such databases should be carefully evaluated. Additionally, the issue of multimedia works will take on an important international dimension. If these are regarded at the international level as works in a new, separate category, the issue of their coverage under the existing conventions and the rule of national treatment will be open to debate. If, however, as current discussions seem to indicate, they are subsumed into the existing categories of works, establishing meaningful rules internationally will be simplified. Further study to determine what existing rights should be clarified or what other rights may need to be adapted to the emerging digital environment are underway both in domestic and international fora. However, some issues merit identification here, and one of those is the level of protection to be accorded to sound recordings. Many believe that the time has come to bring protection for the performers and producers of sound recordings into line with the protection afforded to the creators of other works protected under the Berne Convention. This includes providing high-level standards for rights and benefits granted on the basis of national treatment. This is necessary for a number of reasons. First, there is no just reason to accord a lower level of protection to one special class of creative artists. Second, the extent of international trade in sound recordings makes it imperative that standards of protection be harmonized at a high level. Third, and perhaps most importantly, the digital communications revolution -- the creation of advanced information infrastructures -- is erasing the distinctions among different categories of protected works and sound recordings and the uses made of them. Concerns also have been raised over the extent and scope of moral rights in the world of digital communications. Some believe that the ability to modify and restructure existing works and to create new multimedia works makes strengthening international norms for moral rights more important than ever before. Others take the view that any changes to international norms for the protection of moral rights must be carefully considered in the digital world. The United States agrees with this view. Careful thought must be given to the scope, extent and especially the waivability of moral rights in respect of digitally fixed works, sound recordings and other information products. There are issues such as digital fixation, storage and delivery that will need to be taken into account in the New Instrument. There are also questions concerning the scope of rights and the right owners that might be covered by the New Instrument. To the extent possible, definitions in the New Instrument should be identical to those in the Berne Protocol. Otherwise, differences in phrasing could lead to differences in interpretation, and jeopardize the "bridging" of the New Instrument with the Berne Convention and the Protocol. Many of these issues are critical to the United States and other countries. To attain the needed level of protection internationally, ways to span the differences between the continental ÃÃdroitÄÄ ÃÃd'auteurÄÄ and neighboring rights systems and the Anglo-American copyright systems must be developed. An essential element of this effort will be to harmonize levels of protection by establishing standards that can be implemented through either system. à ÃÑ#XPú\  PQÿXP#ÑÐÐÐ Ü° ÐEndnotes Ä ÄÃÃÐÐ30ÁÁÃÃSeeÄÄ U.S. Const., art. I, ÀÀ 8, cl. 8. 31ÁÁOn August 18, 1787, James Madison submitted to the delegates to the Constitutional Convention a list of powers to be granted Congress, which included the power "To secure to literary authors their copyrights for a limited time" and "To encourage, by premiums and provisions, the advancement of useful knowledge and discoveries." At the same time, Charles Pinckney submitted a list which included the power "To grant patents for useful inventions" and "To secure to authors exclusive rights for a certain time." On September 5, the clause "To promote the progress of science and the useful arts, by securing for limited times, to authors and inventors, the exclusive right to their respective writings and discoveries" was agreed to unanimously. On September 17, 1787, the draft was signed by the delegates to the convention with no substantive changes. ÃÃSeeÄÄ ÃÃDebates on the Adoption of the Federal ConstitutionÄÄ as reported by James Madison. The clause was finally ratified in its present form in 1788. George Washington signed the first copyright law on May 31, 1790. 32ÁÁThe Federalist No. 43 (James Madison). 33ÁÁÃÃGoldstein v. CaliforniaÄÄ, 412 U.S. 546, 555 (1973). 34ÁÁÃÃHarper & Row, Publishers, IncÄÄ.Ãà v. Nation EnterprisesÄÄ, 471 U.S. 539, 558 (1985) (hereinafter ÃÃHarper & RowÄÄ). ÃÃSee also id.ÄÄ at 546 ("'monopoly created by copyright thus rewards the individual author in order to benefit the public'"). 35ÁÁÃÃFogerty v. Fantasy, IncÄÄ., 114 S. Ct. 1023, 1029 (1994) (quoting ÃÃSonyÄÄ, ÃÃsupraÄÄ note 22, at 429). 36ÁÁÃÃFeist Publication, IncÄÄ.Ãà v. Rural Telephone Service CoÄÄ., 499 U.S. 340, 349-50 (1991) (citations omitted) (hereinafter ÃÃFeistÄÄ). 37ÁÁÃÃMazer v. SteinÄÄ, 347 U.S. 201, 219 (1954). 38ÁÁÃÃSonyÄÄ, ÃÃsupraÄÄ note 22, at 429. 39ÁÁÃÃHarper & RowÄÄ, ÃÃsupraÄÄ note 34, at 545-46 (citing ÃÃTwentieth Century Music CorpÄÄ.Ãà v. AikenÄÄ, 422 U.S. 151, 156 (1975)). 40ÁÁÃÃUnited States v. Paramount Pictures, IncÄÄ., 334 U.S. 131, 158 (1948). 41ÁÁÃÃWashingtonian Publishing CoÄÄ.Ãà v. PearsonÄÄ, 306 U.S. 30, 36 (1939). 42ÁÁÃÃId. ÄÄ43ÁÁÃÃTwentieth Century Music CorpÄÄ.Ãà v. AikenÄÄ, 422 U.S. 151, 156 (1975). 44ÁÁH.R. Rep. No. 2222, 60th Cong., 2d Sess., 7 (1909) (report accompanying the Copyright Act of 1909, the first comprehensive revision of the copyright laws). 45ÁÁÃÃSeeÄÄ discussion of term of protection ÃÃinfraÄÄ pp. 59-60 and fair use and other limitations on an author's exclusive rights ÃÃinfraÄÄ pp. 73-100. 46ÁÁÃÃSeeÄÄ discussion of unprotected subject matter ÃÃinfraÄÄ pp. 32-35. 47ÁÁHouse Report at 56, ÃÃreprintedÄÄ ÃÃinÄÄ 1976 U.S.C.C.A.N. 5669. 48ÁÁÃÃFogerty, supra ÄÄnote 35, at 1030. 49ÁÁ17 U.S.C. ÀÀ 102(a) (1988 & Supp. V 1993). The Copyright Act specifically excludes from protectible subject matter any "idea, procedure, process, system, method of operation, concept, principle or discovery" even if it meets the criteria for protection. ÃÃSeeÄÄ 17 U.S.C. ÀÀ 102(b) (1988). The Copyright Act also preempts any grant of equivalent rights for works of authorship within the specified subject matter. Section 301 provides: ÃÃÐ rr ÐOn and after January 1, 1978, all legal or equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright as specified by section 106 in works of authorship that are fixed in a tangible medium of expression and come within the subject matter of copyright as specified by sections 102 and 103, whether created before or after that date and whether published or unpublished, are governed exclusively by this title. Thereafter, no person is entitled to any such right or equivalent right in any such work under the common law or statutes of any State. ÄÄÐ Ü° Ð17 U.S.C. ÀÀ 301(a)Ãà (1988). ÄÄ50ÁÁMany courts consider creativity to be an element of originality. For purposes of discussion, we examine originality and creativity as separate requirements. 51ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 102(a) (1988 & Supp. V 1993). The statutory qualification is derived from Congress' limited Constitutional authority to grant copyright protection to "authors" for their "writings." ÃÃSeeÄÄ U.S. Const., art. I, ÀÀ 8, cl. 8. 52ÁÁÃÃFeistÄÄ, ÃÃsupraÄÄ note 36, at 345 ("vast majority of works make the grade quite easily, as they possess some creative spark"). 53ÁÁCopyright protection literally begins when, for instance, the ink dries on the paper. There are no prerequisites, such as registration or affixation of a copyright notice, for obtaining or enjoying copyright protection. 54ÁÁ17 U.S.C. ÀÀ 101 (1988) (definition of "fixed"). 55ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 102(a) (1988 & Supp. V 1993). 56ÁÁ17 U.S.C. ÀÀ 101 (1988) (definition of "copies"). 57ÁÁ17 U.S.C. ÀÀ 101 (1988) (definition of "phonorecords"). 58ÁÁHouse Report at 53, ÃÃreprintedÄÄ ÃÃinÄÄ 1976 U.S.C.C.A.N. 5666-67. This Report generally uses the term "copy" or "copies" to refer to copies ÃÃandÄÄ phonorecords except in those instances where the distinction is relevant. 59ÁÁHouse Report at 52, ÃÃreprintedÄÄ ÃÃinÄÄ 1976 U.S.C.C.A.N. 5665-66. 60ÁÁÃÃSeeÄÄ ÃÃid. ÄÄ61ÁÁÃÃSee, e.g., Stern Electronics, IncÄÄ.Ãà v. KaufmanÄÄ, 669 F.2d 852, 855 (2d Cir. 1982) (putting work in "memory devices" of a computer "satisf[ies] the statutory requirement of a 'copy' in which the work is 'fixed'"). 62ÁÁÃÃSee, e.g., Atari Games Corp. v. OmanÄÄ, 888 F.2d 878 (D.C. Cir. 1989). 63ÁÁUnfixed broadcasts are not within the subject matter of Federal copyright law. Therefore, protection of such works is not preempted and may be provided by state statutory or common law. ÃÃSeeÄÄ 17 U.S.C. ÀÀ 301 (1988 & Supp. V 1993). 64ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 101 (1988) (definition of "fixed"); ÃÃseeÄÄ ÃÃalsoÄÄ ÃÃBaltimore Orioles, IncÄÄ.Ãà v. Major League Baseball Players AssocÄÄ., 805 F.2d 663, 668 (7th Cir. 1986) (telecasts that are videotaped at the same time that they are broadcast are fixed in tangible form), ÃÃcertÄÄ. ÃÃdeniedÄÄ, 480 U.S. 941 (1987); ÃÃNational Football League v. McBee & Bruno's, IncÄÄ., 792 F.2d 726, 731-32 (8th Cir. 1986) ("the legislative history [of the Copyright Act] demonstrates a clear intent on the part of Congress to resolve, through the definition of 'fixation' . . ., the status of live broadcasts, using -- coincidentally but not insignificantly -- the example of a live football game"). It is understood that the "fixation" must be made or authorized by the author. 65ÁÁ17 U.S.C. ÀÀ 101 (1988) (definition of "fixed"). 66ÁÁHouse Report at 53, ÃÃreprintedÄÄ ÃÃinÄÄ 1976 U.S.C.C.A.N. 5666-67. 67ÁÁÃÃSeeÄÄ ÃÃAdvanced Computer Services of Michigan IncÄÄ.Ãà v. MAI Systems CorpÄÄ., 845 F. Supp. 356, 363 (E.D. Va. 1994) (conclusion that program stored only in RAM is sufficiently fixed is confirmed, not refuted, by argument that it "disappears from RAM the instant the computer is turned off"; if power remains on (and the work remains in RAM) for only seconds or fractions of a second, "the resulting RAM representation of the program arguably would be too ephemeral to be considered 'fixed'"); ÃÃTriad Systems CorpÄÄ.Ãà v. Southeastern Express CoÄÄ., 1994 U.S. Dist. LEXIS 5390, at *15-19 (N.D. Cal. March 18, 1994) ("[C]opyright law is not so much concerned with the temporal 'duration' of a copy as it is with what that copy does, and what it is capable of doing, while it exists. 'Transitory duration' is a relative term that must be interpreted and applied in context."). 68ÁÁÃÃSeeÄÄ ÃÃWheaton v. PetersÄÄ, 33 U.S. (1 Peters) 591, 662-63 (1834). 69ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 104 (1988 & Supp. V 1993). Prior to 1978, certain unpublished works, particularly dramatic works and musical compositions, could obtain Federal copyright protection through registration with the Copyright Office. Since 1978, all otherwise eligible unpublished works are protected under Federal law. ÃÃSeeÄÄ 17 U.S.C. ÀÀ 104(a) (1988 & Supp. V 1993). 70ÁÁHouse Report at 129, ÃÃreprintedÄÄ ÃÃinÄÄ 1976 U.S.C.C.A.N. 5745. 71ÁÁ17 U.S.C. ÀÀ 407 (1988). "[T]he owner of copyright or of the exclusive right of publication in a work published in the United States shall deposit, within three months after the date of publication -- (1) two complete copies of the best edition; or (2) if the work is a sound recording, two complete phonorecords of the best edition, together with any printed or other visually perceptible material published with such phonorecords." 17 U.S.C. ÀÀ 407(a) (1988). The deposit requirements are not conditions of copyright protection, but failure to deposit copies of a published work may subject the copyright owner to significant fines. ÃÃSeeÄÄ 17 U.S.C. ÀÀ 407(a), (d) (1988). 72ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 408(b) (1988) ("the material deposited for registration shall include -- (1) in the case of an unpublished work, one complete copy or phonorecord; (2) in the case of a published work, two complete copies or phonorecords of the best edition; (3) in the case of a work first published outside the United States, one complete copy or phonorecord as so published; (4) in the case of a contribution to a collective work, one complete copy or phonorecord of the best edition of the collective work"). 73ÁÁThe first factor of the fair use analysis -- the nature of the copyrighted work -- generally weighs against a finding of fair use if the work is unpublished. ÃÃSeeÄÄ ÃÃHarper & RowÄÄ, ÃÃsupraÄÄ note 34. In 1992, Congress was prompted to amend Section 107 by the near determinative weight courts were giving to the unpublished nature of a work. ÃÃSeeÄÄ Act of October 24, 1992, Pub. L. 102-492, 1992 U.S.C.C.A.N. (106 Stat.) 3145 (adding to the fair use provisions, "The fact that a work is unpublished shall not itself bar a finding of fair use if such finding is made upon consideration of all the above factors."). 74ÁÁ17 U.S.C. ÀÀ 104(a) (1988 & Supp. V 1993); House Report at 58, ÃÃreprintedÄÄ ÃÃin ÄÄ1976 U.S.C.C.A.N. 5671 (Section 104(a) "imposes no qualification of nationality and domicile with respect to unpublished works"); ÃÃseeÄÄ ÃÃalsoÄÄ 17 U.S.C. ÀÀ 104(b) (1988 & Supp. V 1993) (national origin requirements for published works). 75ÁÁ17 U.S.C. ÀÀ 405 (1988 & Supp. V 1993). For such works, failure to include a copyright notice risks total loss of copyright protection. ÃÃSeeÄÄ ÃÃid.ÄÄ Works published after March 1, 1989 (the effective date of the Berne Implementation Act) may (but are not required to) bear a copyright notice identifying the year of publication and the name of the copyright owner. ÃÃSeeÄÄ 17 U.S.C. ÀÀ 401 (1988 & Supp. V 1993). 76ÁÁÃÃSeeÄÄ ÃÃgenerallyÄÄ 17 U.S.C. ÀÀÀÀ 107 - 120 (1988 & Supp. V 1993). ÃÃSee, e.g., ÄÄ17 U.S.C. ÀÀ 118 (1988 & Supp. V 1993) (compulsory license is available for the use of certain published works in connection with noncommercial broadcasting). 77ÁÁ17 U.S.C. ÀÀ 101 (1988) (definition of "publication"). 78ÁÁÃÃSeeÄÄ House Report at 138, ÃÃreprintedÄÄ ÃÃinÄÄ 1976 U.S.C.C.A.N. 5754. ÃÃSeeÄÄ ÃÃalsoÄÄ discussion of transmissions and the "distribution" of copies ÃÃinfraÄÄ pp. 67-69, 217-20. 79ÁÁÃÃSee, e.g., Salinger v. Random House, IncÄÄ., 811 F.2d 90 (2d Cir.), ÃÃsupplementedÄÄ, ÃÃreh'gÄÄ ÃÃdeniedÄÄ, 818 F.2d 252, ÃÃcertÄÄ. ÃÃdeniedÄÄ, 484 U.S. 890 (1987) (copyrighted letters did not lose unpublished status by placement in library); ÃÃWPOW, IncÄÄ.Ãà v. MRLJ EnterprisesÄÄ, 584 F. Supp. 132 (D.D.C. 1984) (filing of work with federal agency did not constitute publication). 80ÁÁÃÃSeeÄÄ 1 M. Nimmer & D. Nimmer, Nimmer on Copyright ÀÀ 4.04 (1994) (hereinafter Nimmer on Copyright). In a couple of aspects, the concept of publication was broadened to include the authorization of offers to distribute copies in a commercial setting and the distribution to certain middlemen, such as retailers, motion picture exhibitors and television stations. ÃÃSeeÄÄ ÃÃParamount Pictures CorpÄÄ.Ãà v. RubinowitzÄÄ, 217 U.S.P.Q. 48, 50 (E.D.N.Y. 1981) (discussing evolution of definition of publication); ÃÃNational Broadcasting Co., Inc. v. SonnebornÄÄ, 630 F. Supp. 524, 532-33 (D. Conn. 1985). 81ÁÁÃÃSeeÄÄ 1 Nimmer on Copyright ÀÀ 4.13[B]; ÃÃKunycia v. Melville Realty Co. IncÄÄ., 755 F. Supp. 566, 574 (S.D.N.Y. 1990). 82ÁÁÃÃSeeÄÄ ÃÃWhite v. KimmellÄÄ, 193 F.2d 744, 746-47 (9th Cir. 1952). Before the notice requirement was eliminated, the Copyright Act generally provided for the invalidation of the copyright in a work if copies of the work were distributed to the public, under the authority of the copyright owner, without a copyright notice. In virtually all instances where limited publication was applied, the distribution was noncommercial in nature. 83ÁÁÃÃSeeÄÄ ÃÃAcademy of Motion Picture Arts and Sciences v. Creative House Promotions, IncÄÄ., 944 F.2d 1446, 1451-54 (9th Cir. 1991) (distribution of personalized Oscar statuettes to select group of distinguished artists constituted limited publication); ÃÃLish v. Harper's Magazine FoundÄÄ., 807 F. Supp. 1090, 1102 (S.D.N.Y. 1992) (letter distributed to members of class remained unpublished). 84ÁÁÃÃSeeÄÄ 37 C.F.R. ÀÀ 202.1(a) (1994); ÃÃseeÄÄ ÃÃalso, e.g., Takeall v. PepsiCo IncÄÄ., 29 U.S.P.Q.2d 1913, 1918 (4th Cir. 1993) (unpublished) (holding phrase "You Got the Right One, Uh-Huh" is not copyrightable and, thus, was not infringed by commercial using phrase "You Got the Right One Baby, Uh-Huh"). While short phrases may not be copyrightable standing alone, they may be protected as part of a larger, copyrighted work. ÃÃSee, e.g.,ÄÄ ÃÃDawn AssocsÄÄ.Ãà v. LinksÄÄ, 203 U.S.P.Q. 831, 835 (N.D. Ill. 1978) (holding phrase "When there is no room in hell . . . the dead will walk the earth" to be an integral part of a copyrighted advertisement, and defendant's unauthorized use of it demonstrated likelihood of success on the merits of infringement suit); ÃÃGrand Upright Music LtdÄÄ.Ãà v. Warner Bros. Records, IncÄÄ., 780 F. Supp. 182, 183-85 (S.D.N.Y. 1991) (finding lyric "alone again" to be protected as part of a copyrighted work and infringed by defendant rap artist's "sampling"). Short phrases may also be eligible for trademark protection if used to identify goods or services. 85ÁÁIn ÃÃMazer v. SteinÄÄ, the Supreme Court held that works of art which are incorporated into the design of useful articles, but which can stand by themselves as art works separate from the useful articles, are copyrightable. ÃÃSeeÄÄ 347 U.S. 201, 214-17 (1954). ÃÃSeeÄÄ ÃÃalsoÄÄ 17 U.S.C. ÀÀ 101 (defining "useful article" as "an article having an intrinsic utilitarian function that is not merely to portray the appearance of the article or to convey information); 17 U.S.C. ÀÀ 101 (in the definition of "pictorial, graphic, and sculptural works" noting that "the design of a useful article . . . shall be considered a pictorial, graphic, or sculptural work only if, and only to the extent that, such design incorporates pictorial, graphic, or sculptural features that can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article"). The House Report indicates that the required separability may be physical or conceptual. ÃÃSeeÄÄ House Report at 55, ÃÃreprintedÄÄ ÃÃin ÄÄ1976 U.S.C.C.A.N. 5668; ÃÃseeÄÄ ÃÃalsoÄÄ ÃÃKieselstein-Cord v. Accessories By Pearl, IncÄÄ., 632 F.2d 989, 993 (2d Cir. 1980). 86ÁÁ17 U.S.C. ÀÀ 102(b) (1988); ÃÃseeÄÄ ÃÃFeistÄÄ, ÃÃsupraÄÄ note 36, at 359 ("facts contained in existing works may be freely copied"); ÃÃHarper & RowÄÄ, ÃÃsupraÄÄ note 34, at 547 ("no author may copyright facts or ideas"). 87ÁÁThe ideas are not protected; the expression is. ÃÃBaker v. SeldonÄÄ, 101 U.S. 99, 103 (1879); ÃÃBeal v. Paramount Pictures CorpÄÄ., 20 F.3d 454, 458-59 (11th Cir.), ÃÃcertÄÄ. ÃÃdeniedÄÄ, 115 S. Ct. 675 (1994); ÃÃseeÄÄ ÃÃalsoÄÄ ÃÃHarper & RowÄÄ, ÃÃsupraÄÄ note 34, at 547-48 ("copyright is limited to those aspects of the work -- termed 'expression' -- that display the stamp of the author's originality"). The line between idea and expression is not easy to draw. The distinction is not that one is fixed and the other is not -- they are both fixed in the copyrighted work of authorship. At some point, the idea becomes detailed enough to constitute expression. Judge Learned Hand explained: Ð rr ÐUpon any work . . . a great number of patterns of increasing generality will fit equally well, as more and more of the incident is left out. The last may perhaps be no more than the most general statement of what the [work] is about, and at times might consist only of its title; but there is a point in this series of abstractions where they are no longer protected, since otherwise the [author] could prevent the use of his "ideas," to which, apart from their expression, his property is never extended. ÃÃÐ Ü° ÐNichols v. Universal Pictures CorpÄÄ., 45 F.2d 119, 121 (2d Cir. 1930). 88ÁÁÃÃHarper & RowÄÄ, ÃÃsupraÄÄ note 34, at 548. 89ÁÁÃÃFeistÄÄ, ÃÃsupraÄÄ note 36, at 349-50 (citing ÃÃHarper & RowÄÄ, ÃÃsupraÄÄ note 34, at 556-57). 90ÁÁÃÃFeistÄÄ, ÃÃsupraÄÄ note 36, at 349-50. 91ÁÁ17 U.S.C. ÀÀ 105 (1988). There are limited exceptions to this noncopyrightability provision. For instance, the Secretary of Commerce is authorized to secure copyright on behalf of the United States "in all or any part of any standard reference data which he prepares or makes available" under the Standard Reference Data Program. ÃÃSeeÄÄ 15 U.S.C. ÀÀ 290(e) (1988). Works of the U.S. Postal Service, such as designs on postage stamps, are also copyrightable by the Postal Service. ÃÃSeeÄÄ House Report at 60, ÃÃreprintedÄÄ ÃÃinÄÄ 1976 U.S.C.C.A.N. 5674 ("the Postal Service could . . . use the copyright law to prevent the reproduction of postage stamp designs for private or commercial non-postal services"). Copyright interests transferred to the U.S. Government by assignment, bequest or otherwise may be held and enforced by it. ÃÃSeeÄÄ 17 U.S.C. ÀÀ 105 (1988). 92ÁÁA work of the U.S. Government is a work "prepared by an officer or employee of the United States Government as part of that person's official duties." 17 U.S.C. ÀÀ 101 (definition of "work of the United States Government"). Although the wording of this definition is not identical to that of a "work made for hire," the concepts "are intended to be construed in the same way." House Report at 58, ÃÃreprintedÄÄ ÃÃinÄÄ 1976 U.S.C.C.A.N. 5672. ÃÃSeeÄÄ discussion of works made for hire ÃÃinfraÄÄ notes 134-36 and accompanying text. 93ÁÁÃÃSeeÄÄ House Report at 59, ÃÃreprintedÄÄ ÃÃinÄÄ 1976 U.S.C.C.A.N. 5672. 94ÁÁ17 U.S.C. ÀÀ 102(a) (1988 & Supp. V 1993). 95ÁÁ17 U.S.C. ÀÀ 101 (1988) (definition of "literary works"). 96ÁÁFollowing the recommendation of CONTU, Congress amended the Copyright Act in 1980 to recognize that computer programs are protected works. ÃÃSeeÄÄ Act of December 12, 1980, Pub. L. 96-517, 1980 U.S.C.C.A.N. (94 Stat.) 3015, 3028. "Computer programs" are defined as a "set of statements or instructions to be used directly or indirectly in a computer in order to bring about a certain result." ÃÃSeeÄÄ 17 U.S.C. ÀÀ 101 (1988 & Supp. V 1993). 97ÁÁÃÃSeeÄÄ House Report at 54, ÃÃreprintedÄÄ ÃÃinÄÄ 1976 U.S.C.C.A.N. 5667. 98ÁÁCongress did not define the term "musical work" in the statute based on the assumption that the term had a "fairly settled" meaning. ÃÃSeeÄÄ House Report at 53, ÃÃreprintedÄÄ ÃÃinÄÄ 1976 U.S.C.C.A.N. 5666-67. 99ÁÁA phonorecord generally embodies two works -- a musical work (or, in the case of spoken word recordings, a literary work) and a sound recording. Musical works available through services on the NII may also be the subject of Musical Instrument Digital Interface ("MIDI") recordings. A MIDI is a data stream between a musical unit in a computer and a music-producing instrument. The data stream instructs the instrument, such as a synthesizer, on what notes to play. 100ÁÁÃÃSeeÄÄ H. Abrams, The Law of Copyright ÀÀ 204[C][3][b][iv] (1993). The term "dramatic works" is not defined in the Act. ÃÃSeeÄÄ House Report at 53, ÃÃreprintedÄÄ ÃÃinÄÄ 1976 U.S.C.C.A.N. 5666-67. 101ÁÁCongress also declined to define the terms "pantomimes" and "choreographic works," again relying on "fairly settled meanings." ÃÃSeeÄÄ House Report at 53, ÃÃreprintedÄÄ ÃÃinÄÄ 1976 U.S.C.C.A.N. 5666-67. 102ÁÁ17 U.S.C. ÀÀ 101 (1988) (definition of "pictorial, graphic, and sculptural works"). 103ÁÁÃÃMazer v. SteinÄÄ, 347 U.S. 201, 214-17 (1954); ÃÃseeÄÄ ÃÃsupraÄÄ note 85. 104ÁÁ17 U.S.C. ÀÀ 101 (1988) (definition of "audiovisual works"). 105ÁÁ17 U.S.C. ÀÀ 101 (1988) (definition of "motion pictures"). 106ÁÁÃÃSeeÄÄ House Report at 56, ÃÃreprintedÄÄ ÃÃinÄÄ 1976 U.S.C.C.A.N. 5669. 107ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 101 (1988) (definition of "sound recordings"). 108ÁÁThe sounds accompanying an audiovisual work are specifically excluded from the definition of sound recordings. ÃÃSeeÄÄ ÃÃid. ÄÄ109ÁÁ17 U.S.C. ÀÀ 101 (Supp. V 1993) (definition of "architectural work"). The category of architectural works was added in 1990 by the Architectural Works Copyright Protection Act, Public Law 101-650, 1990 U.S.C.C.A.N. (104 Stat.) 5089, 5133. 110ÁÁÃÃId. ÄÄ111ÁÁ17 U.S.C. ÀÀ 101 (1988) (definition of "compilation"). A "collective work," which is one kind of "compilation," is "a work, such as a periodical issue, anthology, or encyclopedia, in which a number of contributions, constituting separate and independent works in themselves, are assembled into a collective whole." 17 U.S.C. ÀÀ 101 (1988) (definition of "collective work"). 112ÁÁ17 U.S.C. ÀÀ 101 (1988) (definition of "derivative work"). 113ÁÁÃÃSeeÄÄ ÃÃid. ÄÄ114ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 103(a) (1988). 115ÁÁ17 U.S.C. ÀÀ 103(b) (1988). 116ÁÁÃÃId. ÄÄ117ÁÁÃÃSeeÄÄ ÃÃFeistÄÄ, ÃÃsupraÄÄ note 36, at 350-51 (alphabetical "arrangement" of comprehensive list of telephone subscribers not sufficiently "original" and therefore noncopyrightable); ÃÃseeÄÄ ÃÃalsoÄÄ ÃÃsupraÄÄ pp. 32-34 (discussion of the noncopyrightability of facts). 118ÁÁÃÃSeeÄÄ ÃÃFeistÄÄ, ÃÃsupraÄÄ note 36, at 354 ("to accord copyright protection on this basis alone distorts basic copyright principles in that it creates a monopoly in public domain materials without the necessary justification of protecting and encouraging the creation of 'writings' by 'authors'"). 119ÁÁThe embodiment of two or more different types of works in one medium is not a new concept. For instance, a book may contain both a literary work and pictorial works. A compact disc may contain a musical work and a sound recording. 120ÁÁA true "multimedia" work would be one in which several material objects, such as a book, a videocassette and an audiocassette, are bundled into one product. 121ÁÁÃÃSeeÄÄ discussion of compilations ÃÃsupraÄÄ pp. 40-41. 122ÁÁWhile expressly protected under the Copyright Act, the category of "compilations" is not a particularly useful subject matter category. Works in any of the eight enumerated categories of protectible subject matter outlined above may take the form of a compilation, and a protectible compilation must fit into one or more of the subject matter categories. "A compilation or derivative work is copyrightable if it represents an 'original work of authorship' ÃÃandÄÄ falls within one or more of the categories listed in section 102." House Report at 57, ÃÃreprintedÄÄ ÃÃinÄÄ 1976 U.S.C.C.A.N. 5670 (emphasis added). 123ÁÁThe list "sets out the general area of copyrightable subject matter, but with sufficient flexibility to free the courts from rigid or outmoded concepts of the scope of particular categories." House Report at 53, ÃÃreprintedÄÄ ÃÃinÄÄ 1976 U.S.C.C.A.N. 5666. 124ÁÁHouse Report at 53, ÃÃreprintedÄÄ ÃÃinÄÄ 1976 U.S.C.C.A.N. 5666. Indeed, Congress amended the Copyright Act in 1990 to add "architectural works" as a category of protectible works. ÃÃSeeÄÄ ÃÃsupraÄÄ note 109. 125ÁÁIt should be noted that the Copyright Office classifies works into four broad categories for purposes of registration: nondramatic literary works, works of performing arts, works of visual arts, and sound recordings. ÃÃSeeÄÄ 37 C.F.R. ÀÀ 202.3(b)(i)-(iv) (1994). The Copyright Office notes that in cases "where a work contains elements of authorship in which copyright is claimed which fall into two or more classes, the application should be submitted in the class most appropriate to the type of authorship that predominates in the work as a whole." ÃÃSeeÄÄ 37 C.F.R. ÀÀ 202.3(b)(2) (1994). However, the Copyright Act makes clear that the Copyright Office classification of works for purposes of registration "has no significance with respect to the subject matter of copyright or the exclusive rights provided." ÃÃSeeÄÄ 17 U.S.C. ÀÀ 408(c)(1) (1988); ÃÃseeÄÄ ÃÃalsoÄÄ House Report at 153, ÃÃreprintedÄÄ ÃÃinÄÄ 1976 U.S.C.C.A.N. 5769 ("[i]t is important that the statutory provisions setting forth the subject matter of copyright be kept entirely separate from any classification of copyrightable works for practical administrative purposes"). 126ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 106(4),(5) (1988 & Supp. V 1993). The public performance right is limited to literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works. The public display right is limited to literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work. ÃÃId. ÄÄ127ÁÁÃÃSee, e.g., ÄÄ17 U.S.C. ÀÀ 108(h) (1988) (limitation not applicable to musical works, pictorial, graphic or sculptural works, or motion pictures or other audiovisual works other than audiovisual works dealing with news); 17 U.S.C. ÀÀ 109(b) (Supp. V 1993) (certain limitations not applicable to sound recordings and musical works embodied in sound recordings or to computer programs); 17 U.S.C. ÀÀ 110(4) (1988) (limitation applicable only to nondramatic literary or musical works); 17 U.S.C ÀÀ 110(8) (1988) (limitation applicable only to nondramatic literary works); 17 U.S.C. ÀÀ 110(9) (1988) (limitation applicable only to dramatic literary works); 17 U.S.C. ÀÀ 112(a) (1988) (limitation not applicable to motion pictures or other audiovisual works); 17 U.S.C. ÀÀ 113 (1988 & Supp. V 1993) (limitation applicable only to pictorial, graphic, or sculptural works); 17 U.S.C. ÀÀ 114 (1988) (limitation applicable only to sound recordings); 17 U.S.C. ÀÀ 115 (1988) (limitation applicable only to nondramatic musical works); and 17 U.S.C. ÀÀ 120 (Supp. V 1993) (limitation applicable only to architectural works). 128ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 101 (1988) (definition of "literary works") (emphasis added). 129ÁÁThe definition of "sound recordings" explicitly excludes from the category of sound recordings musical, spoken or other sounds "accompanying a motion picture or other audiovisual work . . . ." ÃÃSeeÄÄ 17 U.S.C. ÀÀ 101 (1988) (definition of "sound recordings"). The definition of "audiovisual works" also expressly includes any "accompanying sounds." ÃÃSeeÄÄ 17 U.S.C. ÀÀ 101 (1988) (definition of "audiovisual works"). 130ÁÁAudiovisual works are "works that consist of a series of related images which are intrinsically intended to be shown by the use of machines or devices such as projectors, viewers, or electronic equipment . . . ." 17 U.S.C. ÀÀ 101 (1988) (definition of "audiovisual works"). 131ÁÁCategories are "overlapping in the sense that a work falling within one class may encompass works coming within some or all of the other categories." House Report at 53, ÃÃreprintedÄÄ ÃÃinÄÄ 1976 U.S.C.C.A.N. 5666. 132ÁÁ17 U.S.C. ÀÀ 201(a) (1988). 133ÁÁÃÃId.ÄÄ A "joint work" is "a work prepared by two or more authors with the intention that their contributions be merged into inseparable or interdependent parts of a unitary whole." 17 U.S.C. ÀÀ 101 (1988) (definition of "joint work"). 134ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 201(b) (1988). This legal conclusion may only be altered by the parties in a written instrument signed by them expressly agreeing otherwise. ÃÃId. ÄÄ135ÁÁThe Copyright Act does not define "employee." In 1989, the Supreme Court held that an employment relationship determination for copyright purposes should be made by reference to the "general common law of agency." ÃÃSeeÄÄ ÃÃCommunity for Creative Non-Violence v. ReidÄÄ, 490 U.S. 730, 740-41 (1989). The central question in an agency law inquiry is whether the hiring party has the "right to control the manner and means by which the product is accomplished." ÃÃId.ÄÄ at 751. The factors to be considered include the skill required, the source of the instrumentalities and tools used in creating the work, where the work was created, the duration of the relationship between the parties, whether the hiring party has the right to assign additional projects to the hired party, the method of payment, the extent of the hired party's discretion over when and how long to work, the hired party's role in hiring and paying assistants, whether the hiring party is in business and whether the work is part of the regular business of the hiring party, the provision of employee benefits, and the tax treatment of the hired party. ÃÃId.ÄÄ at 751-52. The Court did not specify any factors that should be weighed more heavily than others, but made clear that an "employee" under the Copyright Act is not limited to a formal, salaried employee. 136ÁÁTo qualify as a work made for hire under the second prong, the work must be specially ordered or commissioned for use as (1) a contribution to a collective work, (2) part of an audiovisual work, (3) a translation, (4) a supplementary work, (5) a compilation, (6) an instructional text, (7) a test, (8) answer material for a test or (9) an atlas. 17 U.S.C. ÀÀ 101 (1988) (definition of "work made for hire"). 137ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 202 (1988). 138ÁÁÃÃId. ÄÄ139ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 201(d)(1) (1988) ("ownership of a copyright may be transferred in whole or in part by any means of conveyance or by operation of law, and may be bequeathed by will or pass as personal property by the applicable laws of intestate succession"). 140ÁÁ17 U.S.C. ÀÀ 204(a) (1988). An exclusive license is considered a transfer of copyright and, therefore, must be in writing. Although an exclusive license may be limited in time, place or scope, it nevertheless extends the benefits of copyright ownership with respect to the rights granted to the licensee for the duration of the license. The rights of a copyright owner may also be licensed on a nonexclusive basis to one or more licensees. The Copyright Act does not require nonexclusive licenses to be in writing. 141ÁÁ17 U.S.C. ÀÀ 101 (1988) (definition of "transfer of copyright ownership"). With the exception of transfers by operation of law, all transfers of copyright ownership must be in writing. 17 U.S.C. ÀÀ 204(a) (1988) ("transfer of copyright ownership, other than by operation of law, is not valid unless an instrument of conveyance, or a note or memorandum of the transfer, is in writing and signed by the owner of the rights conveyed or such owner's duly authorized agent"). 142ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 204(a) (1988). 143ÁÁÃÃSeeÄÄ discussion of the exclusive rights of a copyright owner ÃÃinfraÄÄ pp. 63-72. 144ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 201(d)(2) (1988); 17 U.S.C. ÀÀ 101 (1988) (definition of "copyright owner"). 145ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 203(a) (1988); ÃÃseeÄÄ ÃÃalsoÄÄ 17 U.S.C. ÀÀ 304(c) (1988 & Supp. V 1993). 146ÁÁ17 U.S.C. ÀÀ 203(a)(5) (1988) ("[t]ermination of the grant may be effected notwithstanding any agreement to the contrary, including an agreement to make a will or to make any future grant"). 147ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 203(a) (1988). 148ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 501(b) (1988) ("legal or beneficial owner of an exclusive right under a copyright is entitled . . . to institute an action for any infringement of that particular right committed while he or she is the owner of it"). In certain circumstances, television broadcast stations and others are treated as legal or beneficial owners and may bring actions for infringement by cable systems and satellite carriers. ÃÃSeeÄÄ 17 U.S.C. ÀÀ 501(c), (d), (e) (1988). 149ÁÁHowever, like exclusive licenses, nonexclusive licenses may be terminated 35 years after the effective date of the license. ÃÃSeeÄÄ 17 U.S.C. ÀÀÀÀ 203(a) (1988), 304(c) (1988 & Supp. V 1993). 150ÁÁFor example, a user could decide to participate in a licensing program covering all copies made, for a nominal fee per copy, rather than to indulge in the record-keeping necessary to determine which copies are subject to a licensing fee and which are fair use. Copyright owners may not be allowed, however, to seek to increase the term of protection without implicating the doctrine of copyright misuse. ÃÃCfÄÄ. ÃÃSaturday Evening Post CoÄÄ.Ãà v. Rumbleseat Press, Inc.ÄÄ, 816 F.2d 1191, 1200 (7th Cir. 1987) (claims of misuse must be judged by antitrust standards); ÃÃLasercomb America, IncÄÄ.Ãà v. ReynoldsÄÄ, 911 F.2d 970, 979 (4th Cir. 1990) (contract purporting to license copyright for 99 years rendered copyright owner guilty of copyright misuse). The doctrine of copyright misuse might be implicated in other situations where the scope of protection is significantly expanded. 151ÁÁHouse Report at 79, ÃÃreprintedÄÄ ÃÃinÄÄ 1976 U.S.C.C.A.N. 5693. 152ÁÁÃÃSee, e.g., Harper BrosÄÄ.Ãà v. KlawÄÄ, 232 F. 609 (S.D.N.Y. 1916) (license to dramatize "Ben Hur" in a play did not include right to produce a movie, but licensor enjoined from producing movie because licensee's right to produce a play would be harmed by licensor's production of a movie); ÃÃL.C. Page & CoÄÄ.Ãà v. Fox Film CorpÄÄ., 83 F.2d 196 (2d Cir. 1936) (grant of exclusive "moving picture" rights embraced technical improvements in movies that might be developed during the term of the license; thus, license held to cover "talkies"); ÃÃBartsch v. Metro-Goldwyn-Mayer, IncÄÄ., 391 F.2d 150 (2d Cir.), ÃÃcertÄÄ. ÃÃdeniedÄÄ, 393 U.S. 826 (1968) (1930 license of film rights in a play, when television was a known technology but its full impact not yet realized, included television rights; as experienced businessman, licensor had reason to know of new technology's potential and had burden of negotiating exception). 153ÁÁÃÃSee, e.g., ÄÄ17 U.S.C. ÀÀ 111 (1988 & Supp. V 1993). The cable compulsory license was enacted to reduce the need for negotiations among thousands of program copyright owners and hundreds of cable systems for the right to retransmit the copyrighted programs that are included in the broadcast signals retransmitted by cable systems. 154ÁÁÃÃSeeÄÄ discussion of on-line transactions ÃÃinfraÄÄ pp. 53-59. 155ÁÁÃÃSeeÄÄ discussion ÃÃinfraÄÄ pp. 191-92, 235-36. 156ÁÁLibrary subscription costs for print journals have for many years been two or more times those for individual subscriptions. This additional cost has been assumed by some to permit use of the material by the library's patrons. Licenses would serve to convert this assumption to explicit terms that could be negotiated, avoiding misunderstandings and litigation. 157ÁÁÃÃSeeÄÄ ÃÃgenerallyÄÄ Information Infrastructure Task Force, Committee on Applications and Technology, ÃÃPutting the Information Infrastructure to Work,ÄÄ 25-40 (May 1994). 158ÁÁÃÃSeeÄÄ discussion ÃÃinfraÄÄ pp. 192-94; ÃÃseeÄÄ ÃÃgenerallyÄÄ Uniform Commercial Code, Art. 4A (1990); K. Epper, ÃÃMoney Creators: Point of Sale Pioneer Setting Sail on the Internet,ÄÄ The American Banker 14 (Feb. 10, 1995). 159ÁÁB. Wright, The Law of Electronic Commerce 235 (1991 & Supp. 1994) (hereinafter Wright). 160ÁÁÃÃSeeÄÄ J. Calamari & J. Perillo, The Law of Contracts 25 (3d ed. 1987) (hereinafter Calamari & Perillo). 161ÁÁIn ÃÃCorinthian Pharmaceutical v. Lederle LaboratoriesÄÄ, the court found that the "automated, ministerial act" of a seller issuing an electronic order tracking number to a purchaser's on-line purchase order did ÃÃnotÄÄ constitute assent or acceptance by the seller. ÃÃSeeÄÄ 724 F. Supp. 605, 610 (S.D. Ind. 1989); ÃÃseeÄÄ ÃÃalsoÄÄ Wright, ÃÃsupraÄÄ note 159, at 236 (1991); Electronic Messaging Task Force, ÃÃThe Commercial Use of Electronic Data Interchange -- A Report and Model Trading Partner AgreementÄÄ, A.B.A. Sec. Bus. Law, ÃÃreprinted fromÄÄ 45 Bus. Law 1647 (1990) (hereinafter A.B.A. Report or A.B.A. Model Agreement). 162ÁÁÃÃSeeÄÄ ÃÃStep-Saver Data Systems, Inc. v. Wyse TechnologyÄÄ, 939 F.2d 91 (3d Cir. 1991). 163ÁÁÃÃSeeÄÄ ÃÃid.ÄÄ at 96 n.7. 164ÁÁÃÃSeeÄÄ ÃÃStandard Oil Co. v. PerkinsÄÄ, 347 F.2d 379, 385 n.5 (9th Cir. 1965). 165ÁÁÃÃCompareÄÄ D. Johnson & K. Marks, ÃÃMapping Electronic Data Communications onto Existing Legal Metaphors: Should We Let Our Conscience (and Our Contracts) be Our Guide?ÄÄ, 38 Vill. L. Rev. 487, 488-89 (1993) ÃÃwithÄÄ Note, ÃÃOffers Users Can't Refuse: Shrink-Wrap License Agreements as Enforceable Adhesion ContractsÄÄ, 10 Cardozo L. Rev. 2105, 2120 (1989). 166ÁÁÃÃSeeÄÄ Restatement (Second) of Contracts ÀÀ 211 (1981). 167ÁÁÃÃCompareÄÄ ÃÃStep-SaverÄÄ, ÃÃsupraÄÄ note 162, at 99 ÃÃwithÄÄ ÃÃArizona Retail Systems v. Software LinkÄÄ, 831 F. Supp. 759 (D. Ariz. 1993). 168ÁÁÃÃSeeÄÄ ÃÃStep-SaverÄÄ, ÃÃsupraÄÄ note 162, at 99; ÃÃseeÄÄ ÃÃalsoÄÄ J. Peys, ÃÃComment, Commercial Law -- The Enforceability of Computer "Box-Top" License Agreements Under the U.C.C.ÄÄ, 7 Whittier L. Rev. 881, 885-92 (1985). 169ÁÁÃÃSeeÄÄ Ill. Rev. Stat. ch. 29, para. 801-08 (1986); La. Rev. Stat. ÀÀÀÀ 51:1961-66 (1987). The Louisiana statute was declared partially invalid in a controversial decision in ÃÃVault CorpÄÄ.Ãà v. Quaid Software, LtdÄÄ. because the court found that it impinged on "rights" under the U.S. copyright laws, and was therefore preempted. ÃÃSeeÄÄ 847 F.2d 255, 270 (5th Cir. 1988). 170ÁÁÃÃSeeÄÄ Restatement (Second) of Contracts ÀÀ 131 (1981). Signed writings are also required for exclusive licenses and assignments under the Copyright Act. ÃÃSeeÄÄ 17 U.S.C. ÀÀ 204 (1988). 171ÁÁÃÃSeeÄÄ Wright, ÃÃsupraÄÄ note 159, at 274 (1991). 172ÁÁÃÃSeeÄÄ U.C.C. ÀÀ 1-102(2)(b) (1990). 173ÁÁU.C.C. ÀÀ 2-204 (1990). 174ÁÁÃÃId.ÄÄ at ÀÀ 2-206 (1990). 175ÁÁÃÃSeeÄÄ U.C.C. ÀÀ 2-207 (1990). 176ÁÁThe U.C.C. contains a Statute of Frauds which raises the same questions as common law concerning whether a purely electronic contract can meet the writing and signature requirements. However, the U.C.C. Statute of Frauds includes exceptions to the requirements -- for specially manufactured goods not suitable for sale to others which the seller has begun to manufacture, and for goods that have been received and accepted. ÃÃSeeÄÄ U.C.C. ÀÀ 2-201(2), (3) (1990). 177ÁÁÃÃSeeÄÄ U.C.C. ÀÀ 1-205(1), (2) (1990). 178ÁÁÃÃSeeÄÄ U.C.C. ÀÀÀÀ 2-105(2), 716(3) (1990). ÃÃSeeÄÄ D. Frisch, ÃÃSymposium: The Revision of the Uniform Commercial CodeÄÄ, 35 Wm. & Mary L. Rev. 1691, 1729 (1994). 179ÁÁÃÃSeeÄÄ U.C.C. ÀÀ 1-102 (1990). ÃÃButÄÄ ÃÃseeÄÄ Calamari & Perillo, ÃÃsupraÄÄ note 160, at 16; ÃÃStep SaverÄÄ, ÃÃsupraÄÄ note 162, at 94; ÃÃAdvent Systems Ltd. v. Unisys Corp.ÄÄ, 925 F.2d 670 (3d Cir. 1991). 180ÁÁÃÃSeeÄÄ ÃÃsupraÄÄ notes 160-71 and accompanying text. 181ÁÁÃÃSeeÄÄ R. Nimmer, ÃÃSymposium: The Revision of Article 2 of the Uniform Commercial Code,ÄÄ 35 Wm. & Mary L. Rev. 1337, 1341-50 (1994). 182ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 301 (1988). 183ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 302(a) (1988). The terms of protection for works created before January 1, 1978 (the effective date of the 1976 revisions to the Copyright Act) are set forth in Sections 303 and 304 of the Act. ÃÃSeeÄÄ 17 U.S.C. ÀÀÀÀ 303, 304 (1988 & Supp. V 1993). Bills introduced in the 104th Congress would extend by 20 years the term of protection for all works. ÃÃSeeÄÄ S. 483, 104th Cong., 1st Sess. (1995); H.R. 989, 104th Cong., 1st Sess. (1995). A directive adopted by the Council of Ministers of the European Union requires all EU member states to provide a term of protection for copyrighted works of life of the author plus 70 years. Although a number of member states have yet to enact legislation extending terms, the obligations of the directive were to go into effect on July 1, 1995. ÃÃSeeÄÄ Council Directive 7831/93 of 13 July 1993 on Harmonizing the Term of Protection of Copyright and Certain Related Rights. 184ÁÁ17 U.S.C. ÀÀ 302(b) (1988). 185ÁÁ17 U.S.C. ÀÀ 302(c) (1988). The term for anonymous or pseudonymous works differs if the identity of one or more of the authors is revealed before the end of the term of protection. ÃÃSeeÄÄ ÃÃid. ÄÄ186ÁÁThe public domain is the legal status of works whose term of copyright protection has ended or which are not protected for other reasons, such as the noncopyrightability of the subject matter. 187ÁÁÃÃSeeÄÄ Act of October 31, 1988, Pub. L. 100-568, 1988 U.S.C.C.A.N. (102 Stat.) 2853, 2857. Copyright notice is still required on copies and phonorecords of works publicly distributed prior to March 1, 1989, the effective date of the Act. 188ÁÁ17 U.S.C. ÀÀ 401(a) (1988) (emphasis added). The copyright owner of a sound recording may also place a notice of copyright on publicly distributed phonorecords of the sound recording. 17 U.S.C. ÀÀ 402(b) (1988). 189ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀÀÀ 401(b), 402(b) (1988). 190ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 407 (1988). 191ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 407(c) (1988); ÃÃseeÄÄ ÃÃalsoÄÄ 37 C.F.R. ÀÀ 202.19(e) (1994). 192ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 407(d) (1988). 193ÁÁ17 U.S.C. ÀÀ 408(a) (Supp. V 1993). 194ÁÁ17 U.S.C. ÀÀ 411(a) (Supp. V 1993). Registration is required before a suit for infringement may be brought for works of U.S. origin and for foreign works from countries which are not members of the Berne Convention. 195ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 408 (a), (b) (1988 & Supp. V 1993). Only one copy of the work is required for certain types of works, including unpublished works. 196ÁÁ17 U.S.C. ÀÀ 408(b) (1988). 197ÁÁ17 U.S.C. ÀÀ 410(c) (1988); ÃÃBibbero Systems, IncÄÄ.Ãà v. Colwell Systems, IncÄÄ., 893 F.2d 1104, 1106 (9th Cir. 1990). The weight to be accorded a certificate when registration has been made more than five years from the date of first publication is within the discretion of the court. 17 U.S.C. ÀÀ 410(c) (1988). 198ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 412 (1988 & Supp. V 1993). 199ÁÁThe Berne Convention prohibits member states from conditioning copyright protection for works of Berne nationals on the compliance with formalities. ÃÃSeeÄÄ Article 5 of the Berne Convention ÃÃinfraÄÄ note 439. 200ÁÁ17 U.S.C. ÀÀ 106 (1988 & Supp. V 1993). Section 106(A) grants additional rights for certain works of visual art in single copies or limited editions. The development of the NII does not raise unique issues with respect to those rights. ÃÃSeeÄÄ 17 U.S.C. ÀÀ 106(A) (Supp. V 1993). 201ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 101 (1988) (definitions of "copies" and "phonorecords"). 202ÁÁIn 1978, the ÃÃCONTU Final ReportÄÄ noted, "[T]he application of principles already embodied in the language of the [current] copyright law achieves the desired substantive legal protection for copyrighted works which exist in machine-readable form. The introduction of a work into a computer memory would, consistent with the [current] law, be a reproduction of the work, one of the exclusive rights of the copyright proprietor." ÃÃCONTU Final ReportÄÄ at 40. ÃÃSeeÄÄ ÃÃalsoÄÄ ÃÃMAI Systems CorpÄÄ.Ãà v. Peak Computer, IncÄÄ., 991 F.2d 511, 519 (9th Cir. 1993), ÃÃcertÄÄ. ÃÃdeniedÄÄ, 114 S. Ct. 671 (1994); ÃÃVault CorpÄÄ.Ãà v. Quaid Software LtdÄÄ., 847 F.2d 255, 260 (5th Cir. 1988); ÃÃAdvanced Computer Services v. MAI Systems CorpÄÄ., 845 F. Supp. 356 (E.D. Va. 1994); ÃÃTriad Systems CorpÄÄ.Ãà v. Southeastern Express CoÄÄ., 1994 U.S. Dist. LEXIS 5390 (N.D. Cal. March 18, 1994); 2 Nimmer on Copyright ÀÀ 8.08[A] (1994). 203ÁÁThat copying has occurred does not necessarily mean that infringement has occurred. When copying is (1) authorized by the copyright owner, (2) exempt from liability as a fair use, (3) otherwise exempt under the provisions of Sections 108-119 or Chapter 10 of the Copyright Act, or (4) of such a small amount as to be ÃÃdeÄÄ ÃÃminimisÄÄ, then there is no infringement liability. 204ÁÁÃÃSee, e.g., MAI Systems CorpÄÄ.Ãà v. Peak Computer, Inc.ÄÄ, 991 F.2d 511, 519 (9th Cir. 1993). (While this court's determination with respect to fair use may be open to question, its holding that booting a PC involves copying the operating system seems quite unexceptional.) 205ÁÁFor example, if an author transfers a file (such as a manuscript) to a publisher with an Internet account, copies will typically, at a minimum, be made (a) in the author's Internet server, (b) in the publisher's Internet server, (c) in the publisher's local area network server, and (d) in the editor's microcomputer. It has been suggested that such "copying" of files in intermediate servers is only of transitory duration and consequently not covered by the reproduction right. However, it is clear that if the "copy" exists for more than a period of transitory duration, the reproduction right is implicated. Whether such reproduction is an infringement would be a separate determination. 206ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 106(2) (1988). "A 'derivative work' is a work based upon one or more preexisting works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other form in which a work may be recast, transformed, or adapted. A work consisting of editorial revisions, annotations, elaborations, or other modifications which, as a whole, represent an original work of authorship, is a 'derivative work.'" 17 U.S.C. ÀÀ 101 (1988) (definition of "derivative work"). 207ÁÁ17 U.S.C. ÀÀ 109(a) (1988). ÃÃSeeÄÄ discussion ÃÃinfraÄÄ pp. 90-95. 208ÁÁÃÃSeeÄÄ discussion of rental rights for computer programs and sound recordings ÃÃinfraÄÄ p. 91. 209ÁÁFurthermore, with respect to international distributions, Section 602 of the Copyright Act makes unauthorized importations a violation of the distribution right. ÃÃSeeÄÄ discussion ÃÃinfraÄÄ pp. 107-09. 210ÁÁThe 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." 211ÁÁ839 F. Supp. 1552 (M.D. Fla. 1993). 212ÁÁÃÃId.ÄÄ at 1556. 213ÁÁWhether such reproduction was legally performed by the subscriber, the BBS operator, or both is not clear. 214ÁÁOwners 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. ÃÃSeeÄÄ 17 U.S.C. ÀÀ 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). ÃÃSeeÄÄ discussion of multimedia works ÃÃsupraÄÄ pp. 41-45. 215ÁÁÃÃSeeÄÄ discussion of contributory infringement and vicarious liability ÃÃinfraÄÄ pp. 109-14. 216ÁÁ857 F. Supp. 679 (N.D. Cal. 1994). 217ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 106(4) (1988). 218ÁÁ"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. ÀÀ 101 (1988) (definition of "perform"). 219ÁÁTo perform or display a work "publicly" means -- Ð rr Ð(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. Ð Ü° Ð17 U.S.C. ÀÀ 101 (1988) (definition of "publicly"). 220ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 110 (1988). 221ÁÁThe current law addresses only transmissions of "performances" and "displays." 222ÁÁÃÃSee, e.g., Columbia Pictures IndusÄÄ.Ãà v. Redd Horne, Inc.ÄÄ, 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); ÃÃColumbia Pictures IndusÄÄ.Ãà v. Aveco, Inc.ÄÄ, 800 F.2d 59 (3d Cir. 1986) (same result where customers also rented rooms for viewing); ÃÃOn Command Video CorpÄÄ.Ãà v. Columbia Pictures IndusÄÄ., 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). 223ÁÁ17 U.S.C. ÀÀ 101 (1988 & Supp. V 1993) (definition of "display"). 224ÁÁÃÃSeeÄÄ discussion of ÃÃPlayboyÄÄ case ÃÃsupraÄÄ pp. 68-69 and ÃÃinfra ÄÄpp. 81, 120-21. 225ÁÁOf course, to the extent that such lists or menus are protectible under the Copyright Act, the authors of such lists would have the exclusive right to publicly display them. 226ÁÁThe copyright law's legislative history, describing the introduction of the display right, distinguishes displays "on a screen or tube" from reproductions. This language, written before the advent of the personal computer, applies easily to displays with which Congress was familiar in 1976 (those rendered by broadcast television receivers), but is inapplicable to digital "browsing" where the law itself clearly -- without resort to explanatory Congressional language -- defines such acts as implicating the display ÃÃandÄÄ reproduction rights. 227ÁÁAlthough sometimes referred to as "rights" of the users of copyrighted works, "fair use" and other exemptions from infringement liability are actually limitations on the rights of the copyright owners. Thus, as a technical matter, users are not granted affirmative "rights" under the Copyright Act; rather, copyright owners' rights are limited by exempting certain uses from liability. It has been argued, however, that the Copyright Act would be unconstitutional if such limitations did not exist, as they reduce First Amendment and other concerns. Others have argued that fair use is an anachronism with no role to play in the context of the NII. 228ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 107 (1988 & Supp. V 1993). The judicially created doctrine, although now codified in the Copyright Act, has been described as "so flexible as virtually to defy definition." ÃÃSeeÄÄ ÃÃTime IncÄÄ.Ãà v. Bernard Geis AssocÄÄ., 293 F. Supp. 130, 144 (S.D.N.Y. 1968). 229ÁÁÃÃCampbell v. Acuff-Rose Music, IncÄÄ., 114 S. Ct. 1164, 1177 (1994). As an affirmative defense, the burdens of persuasion and coming forward with evidence both must be carried by defendants to avoid liability (ÃÃi.e.,ÄÄ a copyright owner need not prove an accused use not fair, but, rather, the defendant must prove its fairness). 230ÁÁÃÃId. ÄÄ231ÁÁÃÃSeeÄÄ ÃÃid. ÄÄ232ÁÁ17 U.S.C. ÀÀ 107 (1988 & Supp. V 1993). 233ÁÁÃÃHarper & RowÄÄ, ÃÃsupraÄÄ note 34, at 561. 234ÁÁJustice Story stated that courts should "look to the nature and the objects of the selections made, the quantity and value of the material used, and the degree in which the use may prejudice the sale, or diminish the profits, or supersede the objects, of the original work." ÃÃFolsom v. MarshÄÄ, 9 F. Cas. 342, 348 (C.C.D. Mass. 1841) (No. 4,901). 235ÁÁÃÃSeeÄÄ ÃÃSonyÄÄ, ÃÃsupraÄÄ note 22, at 456 (videotaping by individuals at home of off-the-air television broadcast programming for purpose of "time-shifting" -- as distinguished from "librarying" -- held fair use). 236ÁÁÃÃSeeÄÄ ÃÃStewart v. AbendÄÄ, 495 U.S. 207, 216 (1990) (theatrical and television distribution of motion picture over objection of owner of renewal copyright in underlying short story held infringing); ÃÃHarper & RowÄÄ, ÃÃsupraÄÄ note 34, at 569 ("Nation" magazine's scoop of "Time" magazine's first serial rights in President Ford's memoirs held infringing, notwithstanding newsworthiness of the account of the Nixon pardon set out therein). 237ÁÁÃÃSeeÄÄ ÃÃCampbellÄÄ, ÃÃsupraÄÄ note 229, at 1177-79 (parodic lyrics of popular song not ÃÃperÄÄ ÃÃseÄÄ unfair by virtue of commercial purpose of parody; case remanded for further factual determination). 238ÁÁÃÃSeeÄÄ 464 U.S. at 451. The subsequent ÃÃCampbellÄÄ decision indicates that the presumption is strongest in cases of "mere duplication" and weakest when a second commercial comer makes a transformative use and creates a derivative work. ÃÃSeeÄÄ ÃÃCampbellÄÄ, ÃÃsupraÄÄ note 229, at 1177. 239ÁÁCongress has expressly declined to enact a specific exemption from copyright liability for educational uses. ÃÃSeeÄÄ House Report at 66-67, ÃÃreprintedÄÄ ÃÃinÄÄ 1976 U.S.C.C.A.N. 5680. Cases holding reproduction of an entire work as a fair use are few.ÄÄÃà ÄÄÃÃIn ÃÃHaberman v. Hustler Magazine, IncÄÄ., 626 F. Supp. 201, 212 (D. Mass. 1986) a magazine's reproduction of an artist's post cards was found to be fair use because there was no market harm. ÄÄÃÃ240ÁÁThe consequences of denying a fair use defense in certain legitimate educational contexts are far smaller than in the commercial context. Under the provisions of Section 504(c)(2), statutory damages (damages that may be imposed without proof of the quantum of actual harm to the copyright owner) may not be imposed against a nonprofit educational institution, its employees or agents -- when acting within the scope of their employment -- in respect of copying that they performed with reasonably based grounds for believing the copying was fair use. 17 U.S.C. ÀÀ 504(c)(2) (1988). 241ÁÁÃÃMarcus v. RowleyÄÄ, 695 F.2d 1171 (9th Cir. 1983). 242ÁÁÃÃEncyclopaedia Britannica Educ. CorpÄÄ.Ãà v. CrooksÄÄ, 558 F. Supp. 1247 (W.D.N.Y. 1983). 243ÁÁÃÃBasic Books, IncÄÄ.Ãà v. Kinko's Graphics CorpÄÄ., 758 F. Supp. 1522 (S.D.N.Y. 1991). 244ÁÁÃÃSeeÄÄ ÃÃTwin Peaks Prods., IncÄÄ.Ãà v. Publications Int'l, LtdÄÄ., 996 F.2d 1366, 1376 (2d Cir. 1993). 245ÁÁÃÃSeeÄÄ ÃÃNew Era Publications Int'l, ApS v. Henry Holt & CoÄÄ., 873 F.2d 576 (2d Cir. 1989), ÃÃcertÄÄ. ÃÃdeniedÄÄ, 493 U.S. 1094 (1990). 246ÁÁÃÃSeeÄÄ ÃÃNational Rifle Ass'n v. Handgun Control Fed'nÄÄ, 15 F.3d 559, 562 (6th Cir. 1994). 247ÁÁÃÃSeeÄÄ ÃÃNew Era Publications Int'l, ApS v. Carol Publishing GroupÄÄ, 904 F.2d 152, 157 (2d Cir. 1990). 248ÁÁÃÃSeeÄÄ ÃÃHarper & RowÄÄ, ÃÃsupraÄÄ note 34, at 569 (taking of some 300 words held infringing). 249ÁÁ3 Nimmer on Copyright ÀÀ 13.05[A] (1993) (footnotes omitted). 250ÁÁÃÃSeeÄÄ ÃÃStewart v. AbendÄÄ, ÃÃsupraÄÄ note 236, at 238. 251ÁÁÃÃCf.ÄÄ ÃÃAmerican Geophysical Union v. Texaco, IncÄÄ., 37 F.3d 881, 895 (2d Cir. 1994) ("analysis under the fourth factor must focus on the effect of [defendant's] photocopying upon the potential market for or value of these individual articles"); ÃÃSalinger v. Random House, Inc.ÄÄ, 811 F.2d 90, 99 (2d Cir.), ÃÃcertÄÄ. ÃÃdeniedÄÄ, 484 U.S. 890 (1987) (protecting potential market for author's letters notwithstanding author's profound disinclination ever to publish them). 252ÁÁÃÃSeeÄÄ ÃÃSonyÄÄ, ÃÃsupraÄÄ note 22, at 443-47 (plaintiffs "failed to carry their burden with regard to [the harm of] time-shifting . . . . Harm from time-shifting is speculative and, at best, minimal"). 253ÁÁÃÃSeeÄÄ ÃÃHarper & RowÄÄ, ÃÃsupraÄÄ note 34, at 562. 254ÁÁÃÃSeeÄÄ ÃÃStewart v. AbendÄÄ, ÃÃsupraÄÄ note 236, at 238. 255ÁÁÃÃSeeÄÄ ÃÃCampbellÄÄ, ÃÃsupraÄÄ note 229, at 1173. 256ÁÁThe inability of our common law system to provide guidance covering every possible permutation of behavior is not necessarily a weakness. By permitting courts to reach decisions on a case-by-case basis, our system permits both necessary gap-filling and jurisprudential evolution without requiring repeated pleas to Congress for additional elaboration. 257ÁÁÃÃSeeÄÄ ÃÃsupraÄÄ notes 210-16 and accompanying text (discussing ÃÃPlayboyÄÄ and ÃÃMAPHIAÄÄ decisions). 258ÁÁÃÃPlayboyÄÄ, ÃÃsupraÄÄ note 211, at 1558. 259ÁÁÃÃMAPHIAÄÄ, ÃÃsupraÄÄ note 216. 260ÁÁÃÃMAPHIAÄÄ, ÃÃsupraÄÄ note 216, at 688. 261ÁÁÃÃSeeÄÄ ÃÃinfraÄÄ pp. 83-84. 262ÁÁ802 F. Supp. 1 (S.D.N.Y. 1992), ÃÃaff'd,ÄÄ 37 F.3d 881, 892 (2d Cir. 1994). The Court of Appeals noted, with respect to Texaco's argument that such photocopying was "reasonable and customary," that "whatever validity this argument might have had before the advent of . . . photocopying licensing . . . the argument today is insubstantial." This suggests that, together with Section 108's proscription on most "systematic" photocopying (discussed below), the precedential value of ÃÃWilliams & Wilkins Co. v. United StatesÄÄ, 487 F.2d 1345 (Ct. Cl. 1973) (Federal libraries not liable for infringement where no licensing option existed as between full price subscription to scientific journals and holding of fair use) may be reduced. 263ÁÁExisting guidelines cover certain copying by and for teachers in the classroom context, the copying of music for educational purposes, the copying of relatively recent journal articles by one library for another, and the off-air videotaping of educational broadcast materials. 264ÁÁÃÃSeeÄÄ House Report at 68-74, ÃÃreprintedÄÄ ÃÃinÄÄ 1976 U.S.C.C.A.N. 5681-88. 265ÁÁÃÃSeeÄÄ discussion of the Working Group's proposed amendments to Section 108 ÃÃinfraÄÄ pp. 225-27. 266ÁÁThe laws of economics and physics protect producers of equipment and tangible supplies to a greater extent than copyright owners. A university, for example, has little choice but to pay to acquire photocopy equipment, computers, paper and diskettes. It may, however, seek subsidization from copyright owners by arguing that its copying and distribution of their works should, as a fair use, not be compensated. 267ÁÁHereinafter, the term "library" will be used to refer to a library or archives, or any of its employees acting within the scope of their employment. 268ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 108(a) (1988). Section 108 limitations are ÃÃadditionalÄÄ exemptions provided specifically for certain libraries. Libraries, of course, may also take advantage of fair use privileges or any other exemptions to the Copyright Act (ÃÃseeÄÄ 17 U.S.C. ÀÀ 108(f)(4) (1988)), but the exemptions in Section 108 generally exceed fair use. ÃÃSeeÄÄ ÃÃgenerallyÄÄ ÃÃReport of the Register of Copyrights on Library Reproduction of Copyrighted WorksÄÄ (1983). 269ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 108(a) (1988). 270ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 108(g) (1988). 271ÁÁ17 U.S.C. ÀÀ 108(h) (1988). 272ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 108(b) (1988). 273ÁÁHouse Report at 75, ÃÃreprintedÄÄ ÃÃinÄÄ 1976 U.S.C.C.A.N. 5689. 274ÁÁ17 U.S.C. ÀÀ 108(c) (1988); ÃÃseeÄÄ House Report at 75, ÃÃreprintedÄÄ ÃÃinÄÄ 1976 U.S.C.C.A.N. 5689. 275ÁÁ17 U.S.C. ÀÀ 108(d) (1988). 276ÁÁÃÃId. ÄÄ277ÁÁ17 U.S.C. ÀÀ 108(e) (1988). 278ÁÁÃÃId. ÄÄ279ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 108(f)(3) (1988). 280ÁÁ17 U.S.C. ÀÀ 108(g)(2) (1988). 281ÁÁÃÃSeeÄÄ H.R. Rep. No. 1733, 94th Cong., 2d Sess. 72-73 (1976), ÃÃreprintedÄÄ ÃÃinÄÄ 1976 U.S.C.C.A.N. 5810, 5813-14 (hereinafter Conference Report). 282ÁÁÃÃId.ÄÄ at 72, ÃÃreprintedÄÄ ÃÃinÄÄ 1976 U.S.C.C.A.N. 5813. 283ÁÁÃÃSeeÄÄ discussion ÃÃsupraÄÄ pp. 87-88. 284ÁÁÃÃSeeÄÄ discussion ÃÃsupraÄÄ pp. 87-88. 285ÁÁÃÃSeeÄÄ ÃÃT.B. Harms CoÄÄ.Ãà v. Jem Records, IncÄÄ., 655 F. Supp. 1575, 1582 (D.N.J. 1987); ÃÃColumbia Pictures Indus., IncÄÄ.Ãà v. Aveco, IncÄÄ., 612 F. Supp. 315, 319-20 (M.D. Pa. 1985), ÃÃaff'dÄÄ, 800 F.2d 59 (3d Cir. 1986). 286ÁÁ17 U.S.C. ÀÀ 109(a) (1988). 287ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 109(b)(1)(A) (Supp. V 1993). The prohibition with respect to record rental does not apply to nonprofit libraries or nonprofit educational institutions for nonprofit purposes. ÃÃId.ÄÄ In addition, a nonprofit educational institution may transfer possession of a lawfully made copy of a computer program to another nonprofit educational institution or to faculty, staff and students. ÃÃId.ÄÄ Nonprofit libraries may also lend a computer program for nonprofit purposes if each copy has a copyright warning affixed to the package. 17 U.S.C. ÀÀ 109(b)(2)(A) (Supp. V 1993). The prohibition with respect to computer program rental does not apply to a computer program "which is embodied in a machine or product and which cannot be copied during the ordinary operation or use of the machine or product" or "a computer program embodied in or used in conjunction with a limited purpose computer that is designed for playing video games and may be designed for other purposes." 17 U.S.C. ÀÀ 109(b)(1)(B) (Supp. V 1993). 288ÁÁK. Corsello, ÃÃThe Computer Software Rental Amendments Act of 1990: Another Bend in the First Sale DoctrineÄÄ, 41 Cath. U. L. Rev. 177, 192 (1991). 289ÁÁÃÃSeeÄÄ H.R. Rep. No. 98-987, 98th Cong., 2d Sess. 2 (1984), ÃÃreprintedÄÄ ÃÃinÄÄ 1984 U.S.C.C.A.N. 2898, 2899 (justifying the Record Rental Amendment of 1984). 290ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 109(a) (1988) ("the owner of a particular copy or phonorecord . . . is entitled . . . to sell or otherwise dispose of the possession of that copy or phonorecord"); House Report at 79, ÃÃreprintedÄÄ ÃÃinÄÄ 1976 U.S.C.C.A.N. 5693 (under the first sale doctrine in Section 109 "the copyright owner's exclusive right of public distribution would have no effect upon anyone who owns 'a particular copy or phonorecord lawfully made under this title' and who wishes to transfer it to someone else . . .") ÃÃSeeÄÄ ÃÃalso, e.g., Columbia Pictures IndusÄÄ.Ãà v. Redd Horne, Inc.ÄÄ, 749 F.2d 154, 159 (3d Cir. 1984) ("first sale doctrine prevents the copyright owner from controlling the future transfer of a particular copy once its material ownership has been transferred"). 291ÁÁHouse Report at 79, ÃÃreprintedÄÄ ÃÃinÄÄ 1976 U.S.C.C.A.N. 5693 (under the first sale doctrine, "the owner of the physical copy or phonorecord cannot reproduce or perform the copyrighted work publicly without the copyright owner's consent"). 292ÁÁIf the reproduction is lawful under another provision of the Copyright Act, the transmission would likely not be an infringement. ÃÃSeeÄÄ ÃÃinfraÄÄ p. 95. 293ÁÁÃÃSeeÄÄ House Report at 79, ÃÃreprintedÄÄ ÃÃinÄÄ 1976 U.S.C.C.A.N. 5693. 294ÁÁ17 U.S.C. ÀÀ 109(c) (1988). 295ÁÁSection 109(e) reversed the decision in ÃÃRed Baron-Franklin Park, IncÄÄ.Ãà v. Taito CorpÄÄ., 883 F.2d 275 (4th Cir. 1989), ÃÃcertÄÄ. ÃÃdeniedÄÄ, 493 U.S. 1058 (1990), which held that video games could not be operated in an arcade without the permission of the copyright owner because such operation entailed violation of the copyright owner's exclusive rights to perform and display the work publicly. Section 109(e), however, does not allow the public display or performance of any other work of authorship embodied in the audiovisual game if the copyright owner of the game is not also the copyright owner of the other work. ÃÃSeeÄÄ 17 U.S.C. ÀÀ 109(e) (Supp. V 1993). 296ÁÁÃÃSeeÄÄ discussion of rental rights with regard to phonorecords and copies of computer programs ÃÃsupraÄÄ notes 287-89 and accompanying text. 297ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 110(1) (1988). 298ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 110(2) (1988). 299ÁÁSection 117 of the Copyright Act provides: ÃÃÐ rr ÐNotwithstanding the provisions of section 106, it is not an infringement for the owner of a copy of a computer program to make or authorize the making of another copy or adaptation of that computer program provided: ÐÔÂîFžö N ¦þV®^¶f!¾#&ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ„ÿ(ÔÐ(1)ÁÁthat such a new copy or adaptation is created as an essential step in the utilization of the computer program in conjunction with a machine and that it is used in no other manner, or (2)ÁÁthat such new copy or adaptation is for archival purposes only and that all archival copies are destroyed in the event that continued possession of the computer program should cease to be rightful. ÄÄÐÔÂrÊ" z Ò*‚Ú2Šâ: ’"ê$B'ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿg(ÔÐÐ Ü° Ð17 U.S.C. ÀÀ 117Ãà (1988 & Supp. V 1993). Any identical copies made in accordance with Section 117 "may be leased, sold, or otherwise transferred, along with the copy from which such copies were prepared, only as part of the lease, sale, or other transfer of all rights in the program." Adaptations made may be transferred only with the authorization of the owner of the copyright in the original program. ÃÃId. ÄÄÄÄ300ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 110(3) (1988). 301ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 110(6) (1988). 302ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 110(7) (1988). 303ÁÁÃÃSeeÄÄ17 U.S.C. ÀÀ 110(8), (9) (1988). 304ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 110(10) (1988). 305ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 110(5) (1988). 306ÁÁÃÃSee, e.g., ÄÄthe decision in ÃÃTwentieth Century Music CorpÄÄ.Ãà v. AikenÄÄ, 422 U.S. 151 (1975), which was essentially codified in Section 110(5) (owner of a small food establishment exempt from infringement liability for the performance of copyrighted works via a radio and four small ceiling speakers). ÃÃSeeÄÄ ÃÃalsoÄÄ ÃÃSailor Music v. The Gap Stores, IncÄÄ., 516 F. Supp. 923 (S.D.N.Y.), ÃÃaff'dÄÄ, 668 F.2d 84 (2d Cir. 1981), ÃÃcertÄÄ. ÃÃdeniedÄÄ, 456 U.S. 945 (1982); ÃÃRodgers v. Eighty Four Lumber CoÄÄ., 617 F. Supp. 1021 (W.D. Pa. 1985); ÃÃSpringsteen v. Plaza Roller Dome, IncÄÄ., 602 F. Supp. 1113 (M.D.N.C. 1985). 307ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 112(a) (1988). This limitation of the copyright owner's reproduction right is applicable only if: ÃÃÐÔÂîFžö N ¦þV®^¶f!¾#&ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ„)(ÔÐÐ rr Ð(1)ÁÁthe copy or phonorecord is retained and used solely by the transmitting organization that made it, and no further copies or phonorecords are reproduced from it; and (2)ÁÁthe copy or phonorecord is used solely for the transmitting organization's own transmissions within its local service area, or for purposes of archival preservation or security; and (3)ÁÁunless preserved exclusively for archival purposes, the copy or phonorecord is destroyed within six months from the date the transmission program was first transmitted to the public. ÃÃÐÔÂrÊ" z Ò*‚Ú2Šâ: ’"ê$B'ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ7(ÔÐÐ Ü° ÐId. ÄÄÄÄ308ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀÀÀ 111, 119 (1988 & Supp. V 1993). These provisions are referred to as "compulsory licenses" because under such provisions, copyright owners are compelled to grant the licenses. No license agreements are signed and the terms of such licenses are set forth in the statute; the copyright owner cannot object to the use of the work and must be satisfied with the license fees collected under the statute, which are distributed among all of the affected copyright owners by arbitrators impaneled by the Librarian of Congress. 309ÁÁThe Copyright Office issued a regulation in 1992 stating that a cable system is a facility that both receives and transmits signals from within the same state. ÃÃSeeÄÄ 37 C.F.R. ÀÀ 201.17(k) (1994). This ruling makes clear that Section 111 should not be applicable to any entities other than community-based cable systems. Moreover, in ÃÃSatellite Broadcast Networks, IncÄÄ.Ãà v. OmanÄÄ, 17 F.3d 344 (11th Cir.), ÃÃcertÄÄ. ÃÃdeniedÄÄ, 115 S. Ct. 88 (1994), the 11th Circuit upheld the regulation, finding it valid, enforceable and to be used by courts when determining whether a facility qualifies as a cable system. Since facilities used to transmit works through the NII will generally be inherently capable of receiving and transmitting outside any particular state, these facilities will not qualify for the cable compulsory license. 310ÁÁA "satellite carrier" is defined as "an entity that uses facilities of a satellite service licensed by the Federal Communications Commission to establish and operate a channel of communications for point-to-multipoint distribution of television station signals . . . ." ÃÃSeeÄÄ 17 U.S.C. ÀÀ 119(d)(6). Unless the NII transmission occurs through a satellite service licensed by the FCC for the statutorily prescribed purposes, the compulsory license provisions would not be applicable. 311ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 116 (Supp. V 1993). This compulsory license may only be invoked if private negotiations fail to produce a consensual license. 312ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 118 (1988 & Supp. V 1993). 313ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 115 (1988). 314ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 501(a) (Supp. V 1993). Anyone who "trespasses into [the copyright owner's] exclusive domain by using or authorizing the use of the copyrighted work in one of the five ways set forth in the statute" is an infringer of the copyright. ÃÃSonyÄÄ, ÃÃsupraÄÄ note 22, at 433. 315ÁÁÃÃSeeÄÄ discussion of the scope of the exclusive rights ÃÃsupraÄÄ at pp. 63-72. For instance, activities such as loading a work into a computer, scanning a printed work into a digital file, uploading or downloading a work between a user's computer and a BBS or other server, and transmitting a work from one computer to another may be infringements (in those cases, of the reproduction right). ÃÃSee, e.g., MAI Systems CorpÄÄ.Ãà v. Peak Computer, IncÄÄ., 991 F.2d 511 (9th Cir. 1993) (the turning on of the computer, thereby causing the operating system to be copied into RAM, constituted an infringing reproduction of the copyrighted software); ÃÃAdvanced Computer Services v. MAI Systems CorpÄÄ., 845 F. Supp. 356 (E.D. Va. 1994) (loading software into computer's random access memory constituted infringing reproduction); ÃÃseeÄÄ ÃÃalsoÄÄ 2 Nimmer on Copyright ÀÀ 8.08 at 8-103 (1993) ("input of a work into a computer results in the making of a copy, and hence . . . such unauthorized input infringes the copyright owner's reproduction right"). 316ÁÁThe innocence or willfulness of the infringing activity may be relevant with regard to the award of statutory damages. ÃÃSeeÄÄ 17 U.S.C. ÀÀ 504(c) (1988); ÃÃseeÄÄ ÃÃalsoÄÄ discussion of remedies ÃÃinfraÄÄ pp. 130-33. 317ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 106 (1988 & Supp. V 1993). 318ÁÁÃÃSeeÄÄ House Report at 61, ÃÃreprintedÄÄ ÃÃinÄÄ 1976 U.S.C.C.A.N. 5674 ("references to 'copies or phonorecords' are intended [in Section 106(1)-(3)] and throughout the bill to include the singular"; "the right 'to reproduce the copyright work in copies or phonorecords' means the right to produce ÃÃaÄÄ material object in which the work is duplicated, transcribed, imitated, or simulated . . . "). Further evidence of the intent of Congress to make even a single act of unauthorized reproduction an infringement is found in specific exemptions created for certain single-copy uses. ÃÃSee, e.g., ÄÄ17 U.S.C. ÀÀÀÀ 108(a), 108(f)(2), 112(a) (1988); ÃÃseeÄÄ ÃÃalsoÄÄ ÃÃTexacoÄÄ, ÃÃsupraÄÄ note 251, at 17. 319ÁÁÃÃSee, e.g., Rockford Map Publishers, Inc. v. Directory Serv. CoÄÄ., 224 U.S.P.Q. 851 (C.D. Ill. 1984), ÃÃaff'dÄÄ, 768 F.2d 145 (7th Cir. 1985), ÃÃcert. deniedÄÄ, 474 U.S. 1061 (1986); ÃÃSub-Contractors Register, Inc. v. McGovern's Contractors & Builders Manual, IncÄÄ., 69 F. Supp. 507, 509 (S.D.N.Y. 1946). It is common for publishers of directories and other compilations to deliberately insert mistakes into the work (such as periodically adding a fictitious name, address and phone number in a telephone directory) to detect and help establish copying. ÃÃSeeÄÄ 2 H. Abrams, The Law of Copyright ÀÀ 14.02[B][3][c], at 14-19 to 20 (1993). 320ÁÁThis should be implied in the requirement that there be copying of the copyrighted work. Ideas and facts, of course, are not copyrightable. In the case of compilations, such as databases, if enough facts are copied, the copyrighted expression (the selection, arrangement or coordination of the facts) may be copied and infringement may be found. ÃÃSeeÄÄ ÃÃCONTU Final ReportÄÄ at 42 ("The use of one item retrieved from such a work -- be it an address, a chemical formula, or a citation to an article -- would not . . . conceivably constitute infringement of copyright. The retrieval and reduplication of any substantial portion of a data base, whether or not the individual data are in the public domain, would likely constitute a duplication of the copyrighted element of a data base and would be an infringement."). 321ÁÁÃÃSeeÄÄ ÃÃDonald v. Zack Meyer's T.V. Sales & ServiceÄÄ, 426 F.2d 1027, 1030 (5th Cir. 1970) ("paraphrasing is equivalent to outright copying"), ÃÃcertÄÄ. ÃÃdeniedÄÄ, 400 U.S. 992 (1971); ÃÃDavis v. E.I. DuPont de Nemours & CoÄÄ., 240 F. Supp. 612, 621 (S.D.N.Y. 1965) ("paraphrasing is tantamount to copying in copyright law"); ÃÃseeÄÄ ÃÃgenerallyÄÄ 3 Nimmer on Copyright ÀÀ 13.03[A] at 13-28 to 13-58 (1993). Nimmer identifies two bases upon which courts impose liability for less than 100 percent verbatim copying: (1) "fragmented literal similarity" (where words, lines or paragraphs are copied virtually word-for-word, although not necessarily verbatim) and (2) "comprehensive nonliteral similarity" (where the "fundamental essence or structure" of a work is copied); ÃÃseeÄÄ ÃÃalsoÄÄ P. Goldstein, Copyright ÀÀ 7.2.1 at 13-17 (1989). Goldstein identifies three types of similarity: (1) where the infringing work "tracks" the original work "in every detail," (2) "striking similarity" (where a brief portion of both works is "so idiosyncratic in its treatment as to preclude coincidence") and (3) similarities that "lie beneath the surface" of the works ("[i]ncident and characterization in literature, composition and form in art, and rhythm, harmony and musical phrases in musical composition"). ÃÃId.ÄÄ at 13 (citations omitted). 322ÁÁFor analyses of the various tests that have been used, ÃÃseeÄÄ 3 Nimmer on Copyright ÀÀ 13.03[A] at 13-28 to -58 (1993); M. Leaffer, Understanding Copyright Law ÀÀÀÀ 9.5 - 9.7 at 268-76 (1989). 323ÁÁÃÃSeeÄÄ ÃÃNichols v. Universal Pictures, CorpÄÄ., 45 F.2d 119, 121 (2d Cir. 1930). 324ÁÁÃÃSee Peter Pan Fabrics Inc. v. Martin Weiner CorpÄÄ., 274 F.2d 487 (2d Cir. 1960). 325ÁÁÃÃSeeÄÄ Z. Chaffee, ÃÃReflections on the Law of Copyright: IÄÄ, 45 Columbia L. Rev. 503, 513 (1945). 326ÁÁÃÃSeeÄÄ ÃÃUniversal Athletic Sales CoÄÄ.Ãà v. SalkeldÄÄ, 511 F.2d 904, 908-09 (3d Cir.), ÃÃcert.ÄÄ ÃÃdeniedÄÄ, 423 U.S. 863 (1975) (subtracting all but the "stick figures" from chart as non-protectible subject matter); ÃÃAlexander v. HaleyÄÄ, 460 F. Supp 40, 46 (S.D.N.Y. 1978) (finding "alleged infringements display no similarity at all in terms of expression or language, but show at most some similarity of theme or setting. These items, the skeleton of creative work rather than the flesh, are not protected by the copyright laws."). 327ÁÁÃÃSeeÄÄ 429 F.2d 1106 (9th Cir. 1970). 328ÃÃÁÁSee, e.g., Sid & Marty Krofft Television Prods., Inc. v. McDonald's CorpÄÄ., 562 F.2d 1157 (9th Cir. 1977); ÃÃMcCulloch v. Albert E. Price, IncÄÄ., 823 F.2d 316 (9th Cir. 1987). 329ÁÁÃÃSee, e.g., Reyher v. Children's Television WorkshopÄÄ, 533 F.2d 87 (2d Cir. 1976); ÃÃAtari, IncÄÄ.Ãà v. North American Philips Consumer Electronics CorpÄÄ., 672 F.2d 607 (7th Cir.), ÃÃcertÄÄ. ÃÃdeniedÄÄ, 459 U.S. 880 (1982); ÃÃAtari Games CorpÄÄ.Ãà v. OmanÄÄ, 888 F.2d 878 (D.C. Cir. 1989); ÃÃWhelan Assocs., IncÄÄ.Ãà v. Jaslow Dental Lab., IncÄÄ., 797 F.2d 1222 (3d Cir. 1986), ÃÃcertÄÄ. ÃÃdeniedÄÄ, 479 U.S. 877 (1987). 330ÁÁ562 F.2d 1157 (9th Cir. 1977). 331ÁÁÃÃSeeÄÄ ÃÃPasillas v. McDonald's CorpÄÄ., 927 F.2d 440, 442 (9th Cir. 1991). 332ÁÁÃÃSeeÄÄ ÃÃBrown Bag Software v. Symantec CorpÄÄ., 960 F.2d 1465, 1475 (9th Cir. 1992). 333ÁÁÃÃKrofftÄÄ, ÃÃsupraÄÄ note 330, at 1164. 334ÁÁ862 F.2d 204 (9th Cir. 1988). 335ÁÁÃÃSeeÄÄ ÃÃalsoÄÄ ÃÃApple Computer, IncÄÄ.Ãà v. Microsoft CorpÄÄ., 35 F.3d 1435, 1445 (9th Cir. 1994) (approving of district court's use of analytical dissection and agreeing with other courts' use of the "same analysis although articulated differently"). 336ÁÁ982 F.2d 693 (2d Cir. 1992). ÃÃSeeÄÄ ÃÃAutoskill IncÄÄ.Ãà v. National Educational Support Systems, IncÄÄ., 994 F.2d 1476, 1490-91 (10th Cir. 1993). 337ÁÁOther circuits have applied this test. ÃÃSeeÄÄ ÃÃEngineering Dynamics, IncÄÄ.Ãà v. Structural Software, IncÄÄ., 26 F.3d 1335, 1343 (5th Cir. 1994);Ãà Gates Rubber CoÄÄ.Ãà v. Bando Chemical Indus., LtdÄÄ., 9 F.3d 823, 834 (10th Cir. 1993). 338ÁÁ154 F.2d 464 (2d Cir. 1946). 339ÁÁÃÃSee, e.g., Peter Pan Fabrics, IncÄÄ.Ãà v. Martin Weiner CorpÄÄ., 274 F.2d 487 (2d Cir. 1960); ÃÃIdeal Toy CorpÄÄ.Ãà v. Fab-Lu LtdÄÄ., 360 F.2d 1021 (2d Cir. 1966); ÃÃEden Toys, IncÄÄ.Ãà v. Marshall Field & CoÄÄ., 675 F.2d 498 (2d Cir. 1982). 340ÁÁÃÃIdeal Toy CorpÄÄ. at 1023 n.2. 341ÁÁ905 F.2d 731 (4th Cir. 1990). 342ÁÁÃÃSeeÄÄ ÃÃAliotti v. R. Dakin & CoÄÄ., 831 F.2d 898, 902 (9th Cir. 1987) (holding that perceptions of children must be considered in substantial similarity analysis because they are intended market for product); ÃÃAtari, IncÄÄ.Ãà v. North American Philips Consumer Electronics CorpÄÄ., 672 F.2d 607, 619 (7th Cir.), ÃÃcertÄÄ. ÃÃdeniedÄÄ, 459 U.S. 880 (1982) (holding that "[v]ideo games, unlike an artist's painting, . . . appeal to an audience that is fairly undiscriminating insofar as their concern about more subtle differences in artistic expression"). 343ÁÁÃÃDawsonÄÄ, ÃÃsupraÄÄ note 341, at 736. 344ÁÁAn infringer is anyone who violates "any of the exclusive rights" of the copyright owner. 17 U.S.C. ÀÀ 501(a) (Supp. V 1993). One of the exclusive rights is "to prepare derivative works based upon the copyrighted work." 17 U.S.C. ÀÀ 106(2) (1988). A "derivative work" is a work "based upon one or more preexisting works, such as a . . . condensation, or any other form in which a work may be recast, transformed, or adapted." 17 U.S.C. ÀÀ 101 (1988) (definition of "derivative work"). The Ninth Circuit has suggested that "a work is not derivative unless it has been substantially ÃÃcopiedÄÄ from the prior work." ÃÃSeeÄÄ ÃÃLitchfield v. SpielbergÄÄ, 736 F.2d 1352, 1357 (9th Cir. 1984) (emphasis added). It is unclear, however, whether the court is suggesting that a derivative work must be substantially ÃÃsimilarÄÄ to the prior work or that it simply must incorporate in some form a portion of the prior work, as noted in the legislative history. ÃÃSeeÄÄ House Report at 62, ÃÃreprintedÄÄ ÃÃinÄÄ 1976 U.S.C.C.A.N. 5675. The court noted that there is "little available authority" on infringement of the derivative works right. ÃÃSeeÄÄ ÃÃLitchfieldÄÄ at 1357. 345ÁÁ17 U.S.C. ÀÀ 602(a) (1988). 346ÁÁHouse Report at 169-70, ÃÃreprintedÄÄ ÃÃinÄÄ 1976 U.S.C.C.A.N. 5785. 347ÁÁÃÃId.ÄÄ (Section 602 covers "unauthorized importation of copies or phonorecords that were lawfully made"). 348ÁÁÃÃSeeÄÄ ÃÃT.B. Harms CoÄÄ.Ãà v. Jem Records, IncÄÄ., 655 F. Supp. 1575 (D.N.J. 1987); ÃÃParfums Givenchy, IncÄÄ.Ãà v. C&C Beauty Sales, IncÄÄ., 832 F. Supp. 1378 (C.D. Cal. 1993). Courts are divided as to whether the first sale doctrine limits the ability of copyright owners to enforce the importation rights (as it does with respect to the domestic distribution right). ÃÃCompareÄÄ ÃÃBMG Music v. PerezÄÄ, 952 F.2d 318, 319 (9th Cir. 1991) (first sale doctrine does not circumscribe importation rights under Section 602) ÃÃwithÄÄ ÃÃSebastian Int'l, IncÄÄ.Ãà v. Consumer Contacts (PTY) LtdÄÄ., 847 F.2d 1093, 1097 (3d Cir. 1988) (ÃÃcontraÄÄ). 349ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 602(a) (1988) (subsection does not apply to "(1) importation of copies or phonorecords under the authority or for the use of the Government of the United States or of any State or political subdivision of a State, but not including copies or phonorecords for use in schools, or copies of any audiovisual work imported for purposes other than archival use; (2) importation, for the private use of the importer and not for distribution, by any person with respect to no more than one copy or phonorecord of any one work at any one time, or by any person arriving from outside the United States with respect to copies or phonorecords forming part of such person's personal baggage; or (3) importation by or for an organization operated for scholarly, educational, or religious purposes and not for private gain, with respect to no more than one copy of an audiovisual work solely for its archival purposes, and no more than five copies or phonorecords of any other work for its library lending or archival purposes, unless the importation of such copies or phonorecords is part of an activity consisting of systematic reproduction or distribution, engaged in by such organization in violation of the provisions of section 108(g)(2)"); House Report at 170, ÃÃreprinted inÄÄ 1976 U.S.C.C.A.N. 5786. 350ÁÁÃÃSeeÄÄ discussion of transmissions and the distribution right ÃÃsupraÄÄ pp. 67-69. 351ÁÁÃÃSeeÄÄ discussion ÃÃinfraÄÄ pp. 213-21. 352ÁÁÃÃSeeÄÄ House Report at 61, ÃÃreprintedÄÄ ÃÃinÄÄ 1976 U.S.C.C.A.N. 5674. There must be a direct infringement upon which contributory infringement or vicarious liability is based. 353ÁÁThe concepts of contributory and vicarious liability are well-established in tort law. Contributory infringement of intellectual property rights was first codified in patent law. ÃÃSeeÄÄ 35 U.S.C. ÀÀ 271(c) (1988). 354ÁÁÃÃShapiro, Bernstein & CoÄÄ.Ãà v. H.L. Green CoÄÄ., 316 F.2d 304, 307 (2d Cir. 1963) (holding that company that leased floor space to phonograph record department was liable for record department's sales of "bootleg" records despite absence of actual knowledge of infringement, because of company's beneficial relationship to the sales). 355ÁÁÃÃSee, e.g., Dreamland Ball Room, Inc. v. Shapiro, Bernstein & CoÄÄ., 36 F.2d 354 (7th Cir. 1929); ÃÃFamous Music Corp. v. Bay State Harness Horse Racing & Breeding Ass'n, IncÄÄ., 554 F.2d 1213 (1st Cir. 1977); ÃÃKECA Music, Inc. v. Dingus McGee's CoÄÄ., 432 F. Supp. 72 (W.D. Mo. 1977). Indeed, the "cases are legion which hold the dance hall proprietor liable for the infringement of copyright resulting from the performance of a musical composition by a band or orchestra whose activities provide the proprietor with a source of customers and enhanced income. He is liable whether the bandleader is considered, as a technical matter, an employee or an independent contractor, and whether or not the proprietor has knowledge of the compositions to be played or any control over their selection." ÃÃShapiro, Bernstein & Co. v. H.L. Green CoÄÄ., 316 F.2d 304, 307 (2d Cir. 1963) (citing some 10 cases). 356ÁÁÃÃGershwin Publishing CorpÄÄ.Ãà v. Columbia Artists Management, IncÄÄ., 443 F.2d 1159, 1162 (2d Cir. 1971) (holding management firm's authorization of clients' performances of copyrighted compositions to be contributory infringement). 357ÁÁA library is exempted from liability for the unsupervised use of reproducing equipment located on its premises provided that the equipment displays a copyright law notice. 17 U.S.C. ÀÀ 108(f)(1) (1988). This exemption does not apply to the user of such equipment, and no other provider of equipment enjoys any statutory immunity. ÃÃSeeÄÄ 17 U.S.C. ÀÀ 108(f)(2) (1988). 358ÁÁÃÃSeeÄÄ ÃÃUniversal Pictures CoÄÄ.Ãà v. Harold Lloyd CorpÄÄ., 162 F.2d 354, 366 (9th Cir. 1947) (rejecting defendant's argument that as an employee, he was not responsible for his employer's decision to use infringing material, in light of defendant's personal selection and appropriation of the protected material). 359ÁÁÃÃSeeÄÄ ÃÃBoz Scaggs Music v. KND CorpÄÄ., 491 F. Supp. 908, 913 (D. Conn. 1980) (finding defendant liable based on own admission of responsibility and control over radio performances of protected works). 360ÁÁÃÃSee, e.g., Cable/Home Communication CorpÄÄ.Ãà v. Network Prods., IncÄÄ., 902 F.2d 829, 845-47 (11th Cir. 1990). 361ÁÁ464 U.S. 417 (1984). 362ÁÁÃÃId.ÄÄ at 440. 363ÁÁÃÃId.ÄÄ at 442. The Court cited two principles of patent law, but used only one as the appropriate analogy for copyright law: ÃÃÐ rr ÐThe Copyright Act does not expressly render anyone liable for infringement committed by another. In contrast, the Patent Act expressly brands anyone who "actively induces infringement of a patent" as an infringer, 35 U.S.C. ÀÀ 271(b), and further imposes liability on certain individuals labeled "contributory" infringers, ÀÀ 271(c). ÃÃÄÄÐ Ü° ÐId.ÄÄ at 434-35. Section 271(b) of the Patent Act provides, "Whoever actively induces infringement of a patent shall be liable as an infringer." 35 U.S.C. ÀÀ 271(b) (1988). Section 271(c) provides, "Whoever sells a component of a patented machine, manufacture, combination or composition, or a material or apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use, shall be liable as a contributory infringer." 35 U.S.C. ÀÀ 271(c) (1988). 364ÁÁÃÃSonyÄÄ, ÃÃsupraÄÄ note 361, at 442. "In order to resolve that question, we need not explore ÃÃallÄÄ the different potential uses of the machine and determine whether or not they would constitute infringement. Rather, we need only consider whether on the basis of the facts as found by the District Court a significant number of them would be noninfringing." ÃÃId.ÄÄ The Court declined to "give precise content" to the issue of how much use is needed to rise to the level of "commercially significant." ÃÃSeeÄÄ ÃÃid.ÄÄ ÃÃÁÁÄÄThe four dissenting Justices did not agree that the patent "staple article of commerce" doctrine of contributory infringement was applicable to copyright law. ÃÃSeeÄÄ ÃÃSonyÄÄ, ÃÃsupraÄÄ note 361, at 490-91 n.41 (Blackmun, J., dissenting) ("[t]he doctrine of contributory patent infringement has been the subject of attention by the courts and by Congress . . . and has been codified since 1952, . . . but was never mentioned during the copyright law revision process as having any relevance to contributory ÃÃcopyrightÄÄ infringement"); ÃÃseeÄÄ ÃÃalsoÄÄ ÃÃid.ÄÄ at 491 (disagreeing that "this technical judge-made doctrine of patent law, based in part on considerations irrelevant to the field of copyright . . . should be imported wholesale into copyright law. Despite their common constitutional source, . . . patent and copyright protections have not developed in a parallel fashion, and this Court in copyright cases in the past has borrowed patent concepts only sparingly.") Recognizing the "concerns underlying the 'staple article of commerce' doctrine," the dissent concluded that "if a ÃÃsignificantÄÄ portion of the product's use is ÃÃnoninfringingÄÄ, the manufacturers and sellers cannot be held contributorily liable for the product's infringing uses." ÃÃSeeÄÄ ÃÃid.ÄÄ at 491 (Blackmun, J., dissenting). 365ÁÁÃÃId.ÄÄ at 446. 366ÁÁÃÃSee, e.g., Vault CorpÄÄ.Ãà v. Quaid Software LtdÄÄ., 847 F.2d 255 (5th Cir. 1988) (seller of computer programs that defeat anti-copying protection is not liable as contributory infringer because programs can be used to enable user to make legal archival copies of copyrighted computer programs under Section 117, which the court found to be a substantial noninfringing use). ÃÃButÄÄ ÃÃseeÄÄ ÃÃRCA Records v. All-Fast Systems, IncÄÄ., 594 F. Supp. 335 (S.D.N.Y. 1984) (operator is liable for contributory infringement based on its provision of sound recording facilities where public could make unauthorized phonorecords). 367ÁÁÃÃSega Enterprises LtdÄÄ.Ãà v. MAPHIAÄÄ, 857 F. Supp. 679 (N.D. Cal. 1994). 368ÁÁÃÃSeeÄÄ ÃÃid.ÄÄ at 685. 369ÁÁÃÃSeeÄÄ ÃÃid.ÄÄ at 687. The court found that there was "no need to make archival copies of [Sega's] ROM game cartridges" because the "ROM cartridge format is not susceptible to breakdown" and Sega would replace defective cartridges. ÃÃSeeÄÄ ÃÃid.ÄÄ at 685. The court also found that it was unlikely that customers would buy the copiers, at a cost of $350, for the purpose of backing up Sega's video game programs, which sold for $30 to $70 each. ÃÃId.ÄÄ at 685. 370ÁÁFor detailed analyses of arguments on both sides of this liability issue, ÃÃseeÄÄ I. Trotter Hardy, ÃÃThe Proper Legal Regime for À@ÀCyberspace,À:ÀÄÄ 55 U. Pitt. L. Rev. 993 (1994). 371ÁÁThis differs from other bodies of law with which service providers, as well as broadcasters, newspaper publishers and others, come in contact. Defamation, for example, has a knowledge requirement for liability. This standard is the same whether in a conventional or NII environment. In ÃÃAuvil v. CBS "60 Minutes,"ÄÄ 800 F. Supp. 928 (E.D. Wash. 1992), the court held that a network affiliate which exercised no editorial control over the network broadcast (although it had the power to do so) served only as a conduit and was not liable for republishing defamatory statements. The court borrowed reasoning from book seller cases -- "one who only delivers or transmits defamatory material published by a third person is subject to liability if, but only if, he knows or had reason to know of its defamatory character" -- finding "no logical basis for imposing a duty of censorship on the visual media which does not likewise attach to the print chain of distribution." The court also found that the injured parties were not impaired by limiting conduit liability to those situations where culpability is established; "[t]he generating source, which in a national broadcast will generally be the deepest of the deep pockets, may still be called upon to defend." A similar result was reached in ÃÃCubby, IncÄÄ.Ãà v. CompuServe IncÄÄ., 776 F. Supp. 135 (S.D.N.Y. 1991), where the court held that libelous material uploaded to a bulletin board system by a subscriber did not subject the BBS operator to damages for libel. The court determined that a BBS was a "distributor" (akin to a public library or bookstore) rather than a "republisher," and thus the operator was liable only if it "knew or had reason to know of the allegedly defamatory . . . statements" that had been uploaded. 372ÁÁÃÃSeeÄÄ discussion of innocent infringement ÃÃinfraÄÄ p. 125. 373ÁÁÃÃSeeÄÄ discussion of contributory infringement and vicarious liability ÃÃsupraÄÄ pp. 109-14. 374ÁÁÃÃSeeÄÄ ÃÃOlan Mills, IncÄÄ.Ãà v. Linn Photo CoÄÄ., 23 F.3d 1345 (8th Cir. 1994). 375ÁÁÃÃSeeÄÄ P. Goldstein, Copyright, ÀÀ 1.15, at 45 (1989) ("The exercise of due diligence . . . can reduce, but never entirely exclude, the risk of a copyright infringement claim. Copyright law's rule of strict liability poses particularly hard problems for an intermediary, . . . which must accept on faith its author's representation that he originated the work."). 376ÁÁThe same can be said of other information providers and facilitators, such as book stores, photocopying services, photo finishers, broadcasters, etc. 377ÁÁThe subscriber may be unknown -- particularly in the case of anonymous messages -- to everyone but the service provider. 378ÁÁSome estimates of the number of BBS operators are as high as 100,000. 379ÁÁÃÃSeeÄÄ ÃÃBuck v. Jewell-LaSalle Realty CoÄÄ., 283 U.S. 191, 198-99 (1931) (citations omitted) (at the time, infringement of the public performance right required that the performance was "for profit"); ÃÃseeÄÄ ÃÃalsoÄÄ ÃÃABKCO Music, IncÄÄ.Ãà v. Harrisongs Music, LtdÄÄ., 722 F.2d 988, 999 (2d Cir. 1983) ("the problems of proof inherent in a rule that would permit innocent intent as a defense to copyright infringement could substantially undermine the protections Congress intended to afford copyright holders"). 380ÁÁÃÃSee, e.g., ÄÄHouse Report at 159-60, ÃÃreprintedÄÄ ÃÃinÄÄ 1976 U.S.C.C.A.N. 5775-76. Within the cable compulsory licensing provisions, one narrow exemption from liability was granted with respect to secondary transmissions by independent carriers that provided transmission capacity for the distribution of superstation signals to local cable operators. ÃÃSeeÄÄ 17 U.S.C. ÀÀ 111(a)(3) (1988). This exemption is only available if the primary transmission is made for reception by the public at large. If the primary transmission is limited to a particular segment of the public, such as subscribers to a service, the exemption does not apply and the standards for copyright liability are fully applicable. 381ÁÁÃÃSeeÄÄ cases cited ÃÃsupraÄÄ note 355. 382ÁÁHouse Report at 159-60, ÃÃreprintedÄÄ ÃÃinÄÄ 1976 U.S.C.C.A.N. 5775-76. 383ÁÁHouse Report at 163, ÃÃreprintedÄÄ ÃÃinÄÄ 1976 U.S.C.C.A.N. 5779. 384ÁÁÃÃId. ÄÄ385ÁÁ3 Nimmer on Copyright ÀÀ 13.08 at 13-291 (1994). ÃÃSeeÄÄ P. Goldstein, Copyright ÀÀ 9.4 at 162 (1989) ("the standard rationale for excluding innocence as a defense to copyright infringement is that, as between the copyright owner and the infringer, the infringer is better placed to guard against mistake"; "the strict liability rule should discipline an infringer, who might otherwise mistakenly conclude that his copying will not infringe the copyrighted work, to evaluate the legal consequences of his conduct more carefully"). 386ÁÁÃÃPlayboy Enterprises IncÄÄ.Ãà v. FrenaÄÄ, 839 F. Supp. 1552 (M.D. Fla. 1993). 387ÁÁÃÃId.ÄÄ at 1559. 388ÁÁÃÃSega Enterprises LtdÄÄ.Ãà v. MAPHIAÄÄ, 857 F. Supp. 679 (N.D. Cal. 1994). 389ÁÁÃÃId.ÄÄ at 686-87. With regard to the contributory liability issues, the court found that the BBS operator had knowledge of the uploading and downloading of unauthorized copies of Sega's copyrighted video games and that it solicited the copying of the games. ÃÃId.ÄÄ at 683. 390ÁÁÃÃSeeÄÄ ÃÃFrank Music CorpÄÄ.Ãà v. CompuServe IncÄÄ., Civil Action No. 93 Civ. 8153 (JFK) (S.D.N.Y.) (complaint filed Nov. 29, 1993). The Complaint alleges that defendant, by providing access to its BBS by subscribers, engaged in: (1) "permitting, facilitating and participating in the recording of performances of the [Plaintiffs' works] into, and storing such recordings in, CompuServe's computer database by permitting and enabling its paying subscribers to upload such performances thereto"; (2) "maintaining a storage of unauthorized recordings of [the Plaintiffs' works] (uploaded by its subscribers) in and as part of CompuServe's computer database"; and (3) "permitting, facilitating and participating in the recording (ÃÃi.eÄÄ., re-recording) of the performances of [the Plaintiffs' works] (theretofore stored in its computer database) by permitting and enabling its paying subscribers to download such recorded performances therefrom." Complaint at 6-7. In addition, the Plaintiffs allege that CompuServe had "control over the nature and content of materials stored in its Bulletin Board and downloaded therefrom"; that CompuServe "had actual knowledge of, or in the exercise of reasonable diligence could have determined, the nature and content of materials stored in its Bulletin Board and downloaded therefrom"; and that CompuServe "had actual notice, or in the exercise of reasonable diligence could have determined, that recordings of [the Plaintiffs' works] were uploaded (recorded) to, stored in, and downloaded (re-recorded) from its computer database." ÃÃSeeÄÄ Complaint at 7. 391ÁÁÃÃSeeÄÄ ÃÃReligious Technology Center v. NETCOMÄÄ, No. C95-20091 (N.D. Cal.) (verified first amended complaint filed March 3, 1995). 392ÁÁUnder the Communications Act of 1934, a common carrier is required to furnish service to the public upon reasonable request. ÃÃSeeÄÄ 47 U.S.C. ÀÀ 201. A common carrier is defined as "any person engaged as a common carrier for hire, in interstate or foreign communication by wire or radio . . . ." ÃÃSeeÄÄ 47 U.S.C. ÀÀ 153(h). The Supreme Court examined this somewhat circular definition and found that a common carrier in the communications context is one that "makes a public offering to provide [communications facilities] whereby all members of the public who choose to employ such facilities may communicate or transmit intelligence of their own design and choosing . . . ." ÃÃSeeÄÄ ÃÃFederal Communications Commission v. Midwest Video CorpÄÄ., 440 U.S. 689, 701 (1979) (citing Report and Order, ÃÃIndustrial Radiolocation Service, Docket No. 16106ÄÄ, 5 F.C.C.2d 197, 202 (1966)). 393ÁÁÃÃSeeÄÄ P. Goldstein, Copyright ÀÀ 1.15 at 45 (1989) ("[a]n intermediary can to some extent protect itself by shifting or sharing the risk of infringement through a warranty from the author that he originated the work in question or through an errors and omissions insurance policy"). 394ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 502 (1988). 395ÁÁÃÃSuperhype Publishing, IncÄÄ.Ãà v. VasiliouÄÄ, 838 F. Supp. 1220, 1226 (S.D. Ohio 1993). 396ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 503(a) (1988). 397ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 503(b) (1988). 398ÁÁ17 U.S.C. ÀÀ 504 (1988). Statutory damages generally are not available if the infringement occurred before the effective date of registration of the work, unless the infringement occurred after first publication and registration was made within three months of first publication. ÃÃSeeÄÄ 17 U.S.C. ÀÀ 412 (1988 & Supp. V 1993). 399ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 504(b) (1988). 400ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 504(c)(1) (1988). 401ÁÁ17 U.S.C. ÀÀ 504(c)(2) (1988). 402ÁÁÃÃD.C. Comics IncÄÄ.Ãà v. Mini Gift ShopÄÄ, 912 F.2d 29, 35 (2d Cir. 1990); ÃÃInnovative Networks, IncÄÄ.Ãà v. Satellite Airlines Ticketing, IncÄÄ., 871 F. Supp. 709, 721 (S.D.N.Y. 1995). However, the court must remit statutory damages if (1) the infringer "believed and had reasonable grounds for believing" that the use was a fair use, and (2) the infringer was a nonprofit educational institution, library or archives (or its employee or agent) and infringed the reproduction right or a public broadcasting entity (or a person who "as a regular part of the nonprofit activities" of a public broadcasting entity) that infringed by performing a published nondramatic literary work or reproducing a transmission program embodying a performance of such work. ÃÃSeeÄÄ 17 U.S.C. ÀÀ 504(c)(2) (1988). 403ÁÁÃÃSeeÄÄ17 U.S.C. ÀÀ 504(c)(2) (1988) ("where the infringer sustains the burden of proving, and the court finds, that such infringer was not aware and had no reason to believe that his or her acts constituted an infringement of copyright, the court . . . may reduce the award of statutory damages to a sum of not less than $200"); ÃÃD.C. Comics IncÄÄ., ÃÃsupraÄÄ note 402, at 35 (defendant's lack of business sophistication and absence of copyright notice on copies were basis for a finding of innocent infringement and statutory damages of only $200). A person who is misled and innocently infringes by relying on the lack of a copyright notice on a copy of a work that was lawfully publicly distributed before March 1, 1989, is not liable for any damages (actual or statutory) for infringements committed before actual notice of registration of the work is received. 17 U.S.C. ÀÀ 405(b) (1988). The court may allow, however, the recovery of any of the infringer's profits attributable to the infringement. ÃÃId. ÄÄ404ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 504(c)(2) (1988). 405ÁÁÃÃTwin Peaks Prods., IncÄÄ.Ãà v. Publications Int'l, LtdÄÄ., 996 F.2d 1366, 1382 (2d Cir. 1993); ÃÃVideo Views, IncÄÄ.Ãà v. Studio 21, LtdÄÄ., 925 F.2d 1010, 1020 (7th Cir.), ÃÃcertÄÄ. ÃÃdeniedÄÄ, 502 U.S. 861 (1991). 406ÁÁ17 U.S.C. ÀÀ 505 (1988). 407ÁÁÃÃId.ÄÄ; ÃÃseeÄÄ ÃÃalsoÄÄ ÃÃRoth v. PritikinÄÄ, 787 F.2d 54, 57 (2d Cir. 1986) (attorney's fees generally awarded to prevailing plaintiffs because Copyright Act is intended to encourage suits to redress infringement); ÃÃChi-boy Music v. Charlie Club, IncÄÄ., 930 F.2d 1224, 1230 (7th Cir. 1991) (attorney's fees and costs serve to deter infringement, dissuade defendant's disdain for copyright law, and encourage plaintiffs to bring colorable claims against infringers). No attorney's fees may be awarded for an infringement of copyright before its registration unless, in the case of published works, the infringement occurred after first publication and registration was made within three months of first publication. 17 U.S.C. ÀÀ 412 (1988 & Supp. V 1993). 408ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 506(a) (1988). 409ÁÁ17 U.S.C. ÀÀ 506(b) (1988). 410ÁÁ871 F. Supp. 535 (D. Mass. 1994). 411ÁÁThe indictment alleged that the resultant loss of revenue to the copyright owners was in excess of $1,000,000 over a period of approximately six weeks. 412ÁÁ17 U.S.C. ÀÀ 506(c) (1988). The penalties in Section 506(c) apply with regard to copyright notices or "words of the same purport." ÃÃId. ÄÄ413ÁÁÃÃId. ÄÄ414ÁÁ17 U.S.C. ÀÀ 506(d) (1988). 415ÁÁ17 U.S.C. ÀÀ 506(e) (1988). 416ÁÁÃÃSeeÄÄ ÃÃFogerty v. FantasyÄÄ, ÃÃsupraÄÄ note 35, at 1029. 417ÁÁÃÃSeeÄÄ discussion of the fair use defense ÃÃsupraÄÄ pp. 73-82. 418ÁÁÃÃSee F.E.L. Publications, Ltd. v. Catholic Bishop of ChicagoÄÄ, 754 F.2d 216, 220-22 (7th Cir. 1985); ÃÃbutÄÄ ÃÃsee Columbia Pictures Indus. v. Redd Horne, IncÄÄ., 749 F.2d 154, 161-62 (3d Cir. 1984). 419ÁÁÃÃSeeÄÄ ÃÃPacific & Southern Co., IncÄÄ.Ãà v. DuncanÄÄ, 572 F. Supp. 1186 (N.D. Ga. 1983), ÃÃaff'dÄÄ, 744 F.2d 1490 (11th Cir. 1984). 420ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 504(c)(2) (1988); ÃÃseeÄÄ ÃÃalsoÄÄ ÃÃsupraÄÄ pp. 125-26. If a proper copyright notice was affixed to the published copy to which the infringer had access, the court may not give any weight to a claim of innocent infringement in mitigation of damages, except in limited circumstances involving certain infringers (including nonprofit educational institutions and libraries) who violated certain exclusive rights and who believed, and had reasonable grounds for believing that the use was a fair use. ÃÃSeeÄÄ ÀÀÀÀ 401(d), 504(c)(2) (1988); ÃÃseeÄÄ ÃÃalsoÄÄ 17 U.S.C. ÀÀ 405(b) (1988) (effect on innocent infringers of omission of copyright notice on copies publicly distributed before March 1, 1989). 421ÁÁÃÃSeeÄÄ 17 U.S.C. ÀÀ 302(e) (1988) (after a period of 75 years from first publication of a work, or 100 years from its creation, whichever is shorter, a person who obtains from the Copyright Office a certified report that the records relating to the deaths of authors disclose nothing to indicate that the author is living, or died less than 50 years before, may presume that the author has been dead for at least 50 years, and good faith reliance on that presumption is a complete defense). 422ÁÁÃÃSee generallyÄÄ discussion of infringement ÃÃsupraÄÄ pp. 100-07. 423ÁÁFurther, no action will lie if the statute of limitations has run. ÃÃSeeÄÄ 17 U.S.C. ÀÀ 507 (1988). 424ÁÁA nonexclusive license may be implied from conduct. ÃÃSeeÄÄ ÃÃEffects AssocsÄÄ.ÃÃ, IncÄÄ.Ãà v. CohenÄÄ, 908 F.2d 555, 558 (9th Cir. 1990), ÃÃcertÄÄ. ÃÃdeniedÄÄ, 498 U.S. 1103 (1991); ÃÃMacLean Assocs., IncÄÄ.Ãà v. Wm. M. Mercer-Meidinger-Hansen, IncÄÄ., 952 F.2d 769, 779 (3d Cir. 1991); ÃÃseeÄÄ ÃÃalsoÄÄ 3 Nimmer on Copyright ÀÀ 10.03[A] at 10-38 (1994). Implied licenses, like oral licenses, are always nonexclusive in nature and may be limited in scope. ÃÃSeeÄÄ ÃÃOddo v. RiesÄÄ, 743 F.2d 630, 634 (9th Cir. 1984); ÃÃGilliam v. American Broadcasting CosÄÄ., 538 F.2d 14, 19-21 (2d Cir. 1976). Delivery of a copy of a work by the copyright owner to the moderator of a newsgroup may imply a license to reproduce and distribute copies of the work to the subscribers of that newsgroup, but may not be evidence of an implied license to reproduce and distribute copies to other newsgroups. 425ÁÁ"Neighboring rights" are discussed ÃÃinfraÄÄ p. 134. 426ÁÁÃÃSeeÄÄ S. Siwek & H. Furchtgott-Roth, International Intellectual Property Alliance, ÃÃCopyright Industries in the U.S. EconomyÄÄ (1995). 427ÁÁÃÃSeeÄÄ ÃÃgenerallyÄÄ S. Stewart, International Copyright and Neighbouring Rights (2d ed. 1989) (hereinafter Stewart). Stewart presents a summary of international copyright principles and synopses of the copyright laws of a number of countries. Stewart also identifies socialist copyright laws as a category. However, since the demise of the USSR, many of the former socialist countries have moved to enact modern copyright legislation. The copyright laws of the People's Republic of China and Russia follow the civil law model. 428ÁÁStewart at 6. In some common law countries, moral rights are protected by a combination of statutory provisions and common law. In the United States, for instance, this protection is found in Federal legislation, such as the Lanham Act and the Copyright Act, various state legislative provisions and the common law of privacy, defamation and the like. ÃÃSeeÄÄ ÃÃFinal Report of the Ad Hoc Working Group on U.S. Adherence to the Berne ConventionÄÄ, 10 Colum. VLA J.L. & Arts 513, 548-57 (1986); 2 Nimmer on Copyright ÀÀ 8D.02[A] at 8D-10 to -11 (1994). 429ÁÁThere are 155 members of the Convention Establishing the World Intellectual Property Organization (WIPO) as of July 1, 1995. Done at Stockholm on July 14, 1967; entered into force for the United States on August 25, 1970. 21 UST 1749; TIAS 6932; 828 UNTS 3.Ãà ÄÄWIPO also administers the Paris Convention for the Protection of Industrial Property (Stockholm 1967), which is not discussed in this Report. 430ÁÁBerne Convention (with Appendix) for the Protection of Literary and Artistic Works of September 9, 1886, completed at Paris on May 4, 1896, revised at Berlin on November 13, 1908, completed at Berne on March 20, 1914, revised at Rome on June 2, 1928, at Brussels on June 26, 1948, at Stockholm on July 14, 1967, and at Paris on July 24, 1971, amended at Paris on July 24, 1979. Done at Paris on July 24, 1971; entered into force for the United States on March 1, 1989. 431ÁÁThere were 48 members of the convention as of July 1, 1995, but the United States is not a member. The Rome Convention is jointly administered by WIPO, the International Labor Organization (ILO) and the United Nations Educational, Scientific and Cultural Organization (UNESCO). 432ÁÁDone at Geneva on October 29, 1971; entered into force on April 18, 1973; for the United States on March 10, 1974. 25 UST 309; TIAS 7808; 888 UNTS 67. There were 53 members of the Convention as of July 1, 1995. 433ÁÁUNESCO is the United Nations Educational, Scientific and Cultural Organization. 434ÁÁUniversal Copyright Convention, as revised, with two protocols annexed thereto. Done at Paris on July 24, 1971, entered into force on July 10, 1974. 25 UST 1341; TIAS 7868. As of May 31, 1995, there were 96 members of the Convention. 435ÁÁAs of July 1, 1995, there were 114 signatories to the Berne Convention. 436 ÁÁThis fundamental principle is set forth in Section 102(b) of the U.S. Copyright Act. ÃÃSeeÄÄ discussion ÃÃsupraÄÄ pp. 32-35. 437 ÁÁThis approach is consistent with Section 107 of the U.S. Copyright Act (relating to fair use of copyrighted works). 438 ÁÁOnly Japan and Switzerland qualify under this exception. 439ÁÁArticle 5 provides: ÃÃÐÔÂîFžö N ¦þV®^¶f!¾#&ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ„)(ÔÐÐ rr Ð(1)ÁÁAuthors shall enjoy, in respect of works for which they are protected under this Convention, in countries of the Union other than the country of origin, the rights which their respective laws do now or may hereafter grant to their nationals, as well as the rights specially granted by this Convention. (2)ÁÁThe enjoyment and the exercise of these rights shall not be subject to any formality; such enjoyment and such exercise shall be independent of the existence of protection in the country of origin of the work. Consequently, apart from the provisions of this Convention, the extent of protection, as well as the means of redress afforded to the author to protect his rights, shall be governed exclusively by the laws of the country where protection is claimed. (3) ÁÁProtection in the country of origin is governed by domestic law. However, when the author is not a national of the country of origin of the work for which he is protected under this Convention, he shall enjoy in that country the same rights as national authors. (4) ÁÁThe country of origin shall be considered to be: ÐÔÂîrÊ" z Ò*‚Ú2Šâ: ’"ê$B'ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿì(ÔÐÁÁ(a)ÁÁin the case of works first published in a country of the Union, that country; in the case of works published simultaneously in several countries of the Union which grant different terms of protection, the country whose legislation grants the shortest term of protection; ÁÁ(b)ÁÁin the case of works published simultaneously in a country outside the Union and in a country of the Union, the latter country; ÁÁ(c)ÁÁin the case of unpublished works or of works first published in a country outside the Union, without simultaneous publication in a country of the Union, the country of the Union of which the author is a national, provided that: ÐÔÂîFžö N ¦þV®^¶f!¾#&ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿT(ÔÐÁÁÁÁ(i)ÁÁwhen these are cinematographic works the maker of which has his headquarters or his habitual residence in a country of the Union, the country of origin shall be that country, and ÐÔîFžö N ¦þV®^¶f!¾#&ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿT(ÔÐÁÁÁÁ(ii)ÁÁwhen these are works of architecture erected in a country of the Union or other artistic works incorporated in a building or other structure located in a country of the Union, the country of origin shall be that country. ÄÄÐÔÂrÊ" z Ò*‚Ú2Šâ: ’"ê$B'ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿg(ÔÐÐ Ü° Ð440ÁÁÃÃSeeÄÄ World Intellectual Property Organization, BCP/CE/III/3, Report of the Committee of Experts on a Possible Protocol to the Berne Convention, Third Session, June 21 to 25, 1993, 20-21 (June 25, 1993). 441ÁÁÃÃId.ÄÄ at 21. 442ÁÁÃÃSeeÄÄ Trade-Related Aspects of Intellectual Property, Final Act Embodying the Results of the Uruguay Round of the Multilateral Trade Negotiations, Office of the U.S. Trade Representative (Dec. 15, 1993). 443ÁÁÃÃId. ÄÄ444ÁÁArticle 3 (National Treatment) provides: ÐÔÂîFžö N ¦þV®^¶f!¾#&ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ„ÿ(ÔÐÐ rr Ð1.ÁÁEach Member shall accord to the nationals of other Members treatment no less favourable than that it accords to its own nationals with regard to the protection of intellectual property, subject to the exceptions already provided in, respectively, the Paris Convention (1967), the Berne Convention (1971), the Rome Convention and the Treaty on Intellectual Property in Respect of Integrated Circuits. In respect of performers, producers of phonograms and broadcasting organizations, this obligation only applies in respect of the rights provided under this Agreement. Any Member availing itself of the possibilities provided in Article 6 of the Berne Convention and paragraph 1(b) of Article 16 of the Rome Convention shall make a notification as foreseen in those provisions to the Council for Trade-Related Aspects of Intellectual Property Rights. 2.ÁÁMembers may avail themselves of the exceptions permitted under paragraph 1 above in relation to judicial and administrative procedures, including the designation of an address for service or the appointment of an agent within the jurisdiction of a Member, only where such exceptions are necessary to secure compliance with laws and regulations which are not inconsistent with the provisions of this Agreement and where such practices are not applied in a manner which would constitute a disguised restriction on trade. ÐÔÂrÊ" z Ò*‚Ú2Šâ: ’"ê$B'ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ(ÔÐÐ Ü° Ð445ÁÁArticle 4 of TRIPs (Most-Favoured-Nation Treatment) provides: ÃÃÐÔÂîFžö N ¦þV®^¶f!¾#&ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ„)(ÔÐÐ rr ÐWith regard to the protection of intellectual property, any advantage, favour, privilege or immunity granted by a Member to the nationals of any other country shall be accorded immediately and unconditionally to the nationals of all other Members. Exempted from this obligation are any advantage, favour, privilege or immunity accorded by a Member: ÐÔÂîrÊ" z Ò*‚Ú2Šâ: ’"ê$B'ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿì(ÔÐÁÁ(a)ÁÁderiving from international agreements on judicial assistance and law enforcement of a general nature and not particularly confined to the protection of intellectual property; ÁÁ(b)ÁÁgranted in accordance with the provisions of the Berne Convention (1971) or the Rome Convention authorizing that the treatment accorded be a function not of national treatment but of the treatment accorded in another country; ÁÁ(c)ÁÁin respect of the rights of performers, producers of phonograms and broadcasting organizations not provided under this Agreement; ÁÁ(d)ÁÁderiving from international agreements related to the protection of intellectual property which entered into force prior to the entry into force of the WTO Agreement, provided that such agreements are notified to the Council for TRIPs and do not constitute an arbitrary or unjustifiable discrimination against nationals of other Members. ÄÄÐÔÂrÊ" z Ò*‚Ú2Šâ: ’"ê$B'ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿg(ÔÐÐ Ü° Ð446ÁÁÃÃSeeÄÄ NAFTA, H.R. Doc. No. 159, 103d Cong., 1st Sess. (1993); 32 I.L.M. 289-456, 605-799 (1993). The NAFTA is binding among the United States, Mexico and Canada. 447ÁÁArticle 6ÃÃbisÄÄ provides: ÃÃÐÔÂîFžö N ¦þV®^¶f!¾#&ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ„)(ÔÐÐ rr Ð(1)ÁÁIndependently of the author's economic rights, and even after the transfer of the said rights, the author shall have the right to claim authorship of the work and to object to any distortion, mutilation or other modification of, or other derogatory action in relation to, the said work, which would be prejudicial to his honor or reputation. (2)ÁÁThe rights granted to the author in accordance with the preceding paragraph shall, after his death, be maintained, at least until the expiry of the economic rights, and shall be exercisable by the persons or institutions authorized by the legislation of the country where protection is claimed. However, those countries whose legislation, at the moment of their ratification of or accession to this Act, does not provide for the protection after the death of the author of all the rights set out in the preceding paragraph may provide that some of these rights may, after his death, cease to be maintained. (3)ÁÁThe means of redress for safeguarding the rights granted by this Article shall be governed by the legislation of the country where protection is claimed. ÄÄÐÔÂrÊ" z Ò*‚Ú2Šâ: ’"ê$B'ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿg(ÔÐÐ Ü° Ð448ÁÁÃÃSeeÄÄ Act of October 31, 1988, Pub. L. 100-568, 1988 U.S.C.C.A.N. (102 Stat.) 2853. 449ÁÁÃÃSeeÄÄ Visual Artists Rights Act of 1990, Pub. L. 101-650, 1990 U.S.C.C.A.N. (104 Stat.) 5128. 450ÁÁÃÃSeeÄÄ ÃÃExposure '94: A Proposal for the New Rule of Intellectual Property for MultimediaÄÄ, Institute of Intellectual Property 18 (Feb. 1994). 451ÁÁÃÃSeeÄÄ discussion ÃÃinfra ÄÄpp. 189-90, 230-36. 452ÁÁÃÃSeeÄÄ discussionÃà infraÄÄ pp. 191-94, 236-38. 453ÁÁArticle 20 states: ÃÃÐ rr ÐThe Governments of the countries of the Union reserve the right to enter into special agreements among themselves, in so far as such agreements grant to authors more extensive rights than those granted by the Convention, or contain other provisions not contrary to this Convention. The provisions of existing agreements which satisfy these conditions shall remain applicable. ÄÄÐ Ü° Ð454ÁÁThis reference to fixations includes the subject matter of neighboring rights related to works and their performance. 455ÁÁÃÃFeistÄÄ, ÃÃsupraÄÄ note 36, at 345.