Table of Contents:

Introduction to the online version


Preface to the printed version

Copyright Overview

Software Copyright

Digital Copyright

- Why Digital Works are Different

- A Bad Fit

- Protecting Digital Information

- What Not to Protect

- DMCA Safe Harbors

   - Notice and Takedown and Putback

   - Mere Conduits

   - Caching

   - Stored Information

   - Directories

   - Other Safe Harbor Requirements

   - Special Rules for Schools

- Protection Through Technology

- DMCA Technological Protections

   - Trafficking

   - Accessing

   - Distinction From Copyright

   - Rights Management

   - Permitted Circumventions

   - Reverse Engineering

   - Encryption Research

   - Code as Speech

   - Security Testing

Patent Overview

Software Patents

Full treatise table of contents

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Chapter 3: Copyright of Digital Information

I.B. Copyright Laws are a Bad Fit

The copyright laws work as well for digital works like compact discs (CDs) and digital video discs (DVDs) as they do for phonograph records and movie films or videocassettes. This is not surprising, since when Congress drafted the Copyright Act of 1976, it intended to end the different treatment for works depending on the form or medium in which the work was fixed. Instead, Congress treated any work of authorship fixed in a tangible medium of expression as protected by copyright, stating:

Under the bill it makes no difference what the form, manner, or medium of fixation may be – whether it is in words, numbers, notes, sounds, pictures, or any other graphic or symbolic indicia, whether embodied in a physical object in written, printed, photographic, sculptural, punched, magnetic, or any other stable form, and whether it is capable of perception directly or by means of any machine or device “now known or later developed.” {FN4: H.R. Rep. No. 94-1476 at 52}

But there are times when the copyright laws are a bad fit for digital works. It is not clear which, if any, of the exclusive rights is infringed when a person makes information available to the world using a file-sharing system like Napster. On the other hand, the copyright laws may overprotect digital works by effectively giving the copyright owners the right to control any access or use of the digital work by controlling the intermediate copies that are made as a work is accessed.

I.B.1. File Sharing

Consider the case where somebody places a digital work on a computer so that the public can access it. This could be done by putting it in a file transfer directory, including it as a Web page, or having it in a location that can be accessed by a file-sharing program like Napster. And assume that the digital work is something like a new movie or popular song and the number of downloads is affecting the market value for the original copyrighted work, so it is reasonable for copyright law to give some protection.

Now consider whether he infringed any of the copyright owner’s six exclusive rights:

(1) to reproduce the copyrighted work in copies or phonorecords;

(2) to prepare derivative works based upon the copyrighted work;

(3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;

(4) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly; and

(5) in 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 and

(6) in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission. {FN5: 17 U.S.C. §106}

I.B.1.a. The Public Distribution Right

Since he is essentially distributing the work to anybody accessing his computer system, it’s logical to first look at the distribution right.

The Copyright Act of 1976, like its predecessors, is strongly tied to copies that are fixed in some medium of expression. Copyright comes into being the instant that the first copy of an original expression is made. The definitions in Section 101 makes this tie to physical objects clear:

“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. The term “copies” includes the material object, other than a phonorecord, in which the work is first fixed.

“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. The term “phonorecords” includes the material object in which the sounds are first fixed. {FN6: 17 U.S.C. §101}

For this discussion, there is no significant difference between copies and phonorecords and we’ll refer to them both as “copies.” It’s also useful to note that the term “copy” refers not only to reproductions of an original, but also to the original itself, so “copy” doesn’t mean a duplication of an existing copy but instead a physical object containing the copyrighted work.

Considering our example, according to the definitions in Section 101, “copies are material objects” and he certainly didn’t give any material objects to the public, or anyone else for that matter. While this strong tie to physical objects works well for traditional distributions, it doesn’t encompass digital works that are electronically transmitted from place to place.

Another problem with looking to the distribution right for any finding of infringement is that it appears to require that somebody else actually get the work off the server before there is any infringement. But in one case, Hotaling v. Church of Jesus Christ of Latter-Day Saints, {FN7: 118 F.3d 199, 43 USPQ2d 1299 (4th Cir. 1997)} the court held that actual distribution of work was not necessary:

When a public library adds a work to its collection, lists the work in its index or catalog system, and makes the work available to the borrowing or browsing public, it has completed all the steps necessary for distribution to the public. At that point, members of the public can visit the library and use the work. Were this not to be considered distribution within the meaning of Section 106(3), a copyright holder would be prejudiced by a library that does not keep records of public use, and the library would unjustly profit by its own omission. {FN8: 118 F.3d at 203, 43 USPQ2d at 1302}

I.B.1.b. The Reproduction Right

Perhaps the reproduction right is the one being infringed in the example. He clearly made a copy of the work when he put it on his hard disk for others to access. And it is likely that a copy was made by the person receiving the copyrighted work. But the act we are really trying to proscribe is his making the work available to the world, not making the single copy when he put it on his hard disk. And that copy might not even be an infringement if he was authorized to install the digital work on his computer and simply allowed the world to access that installed copy.

There is an appeal to finding infringement of either the reproduction or the distribution rights, because those are the rights that would have been infringed if he had made physical copies for everybody receiving the work from him, and then distributed them to anybody wanting them. But he has not distributed a physical copy to anybody, and any reproductions beyond the one he put in the file-sharing directory were made by others.

He may, of course, be a contributory infringer if he was aware of the infringing copies being made by others through his making the software accessible to the world. Contributory infringement results when somebody knows of the direct infringement of another and substantially participates in that infringement, such as inducing, causing, or materially contributing to the infringing conduct. But while courts have used this approach to find liability, it would be far better if any liability for infringement came from something he did directly, rather than for the act of another.

I.B.1.c. The Adaptation Right

It would clearly be a stretch to say that he has infringed the adaptation right by preparing a derivative work. As defined in Section 101:

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.” {FN9: 17 U.S.C. §101}

In this case, any copies made were exact copies of the copyrighted work, rather than works “based on” the copyrighted work, and so they are not derivative works.

I.B.1.d. The Public Performance Rights

It would also be a stretch to consider his action as infringing the right “to perform the copyrighted work publicly.” Section 101 says:

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. {FN10: 17 U.S.C. §101}

He didn’t “recite, render, play, dance, or act” the digital work. He just put it on his hard disk and allowed other people access to it. Again, he might be a contributory infringer if somehow the person who accesses the work on the server later recites, renders, plays, dances, or acts out the work, but it is always unappealing to have to resort to an indirect infringement theory.

I.B.1.e. The Public Display Right

With a little creative reading what he may have infringed is the right “to display the copyrighted work publicly.” Section 101 says:

To “display” a work means to show a copy of it, either directly or by means of a film, slide, television image, or any other device or process or, in the case of a motion picture or other audiovisual work, to show individual images nonsequentially. {FN11: 17 U.S.C. §101}

The display right doesn’t seem to have been infringed by placing a digital work on a machine where it is available to the public, but Section 101 also provides two other important definitions:

To perform or display a work “publicly” means–

(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. {FN12: 17 U.S.C. §101}


To “transmit” a performance or display is to communicate it by any device or process whereby images or sounds are received beyond the place from which they are sent. {FN13: 17 U.S.C. §101}

Clearly, the work can be transmitted to the public, or at least to members of the public one at a time, after the work has been placed in a publicly-accessible directory on a computer. And if the principle that a distribution takes place when all steps necessary for a distribution have been completed is also applied to the display of a work, then there is an argument that the person displayed the work when he put a copy of it in a place where anybody could “look” at it by accessing it.

The problem with that argument is that what has been transmitted is the work itself, not an image of the work. The provisions were really intended to cover the display of a work of art to the public by showing and image it on a telecast or similar transmission. And any transmission is likely the result of the actions of the user receiving the work, not the one who made the work available on the file-sharing system.

One also has to be careful using a creative argument to try to find infringement of one of the six exclusive rights because there may be an equally-creative argument that there is not infringement found in the special exceptions in the copyright laws. In this case, he may not have infringed the display right because of an exception found in Section 110:

Notwithstanding the provisions of section 106, the following are not infringements of copyright: . . .

(5)(A) . . . 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, unless –

    (i) a direct charge is made to see or hear the transmission; or

    (ii) the transmission thus received is further transmitted to the public. {FN14: 17 U.S.C. §110(5)(A)}

The personal computer used to received the digital work using the file-sharing system is certainly “a single receiving apparatus of a kind commonly used in private homes.” Many, if not most, file-sharing system users download the digital works to their home computers. And it’s not much more of a stretch to say that what he is doing is a “communication of a transmission” as it is that he is showing a copy of the work as required to infringe the display right.

I.B.1.f. What Can Be Done

For the file-sharing example, none of the six exclusive rights really fit the situation and most likely a contributory infringement argument would have to be made. Yet it seems that there should be a direct copyright infringement, since there is little difference in the effect to the copyright owner between distributing a work worldwide through a file-sharing system and distributing the same work by making and distributing physical copies.

It would be best if Congress amended the copyright laws to directly address infringement by those placing copyrighted works on file-sharing systems. A possible approach for such an amendment is suggested by the WIPO Copyright Treaty’s new “Right of Communication to the Public”:

. . . authors of literary and artistic works shall enjoy the exclusive right of authorizing any communication to the public of their works, by wire or wireless means, including the making available to the public of their works in such a way that members of the public may access these works from a place and at a time individually chosen by them. {FN15: WIPO Copyright Treaty, Art. 8}

Congress could either add a seventh exclusive right to Section 106, or could enhance one of the existing exclusive rights such as public distribution. The latter may be preferable, since then any existing licenses permitting the distribution of a work would cover both physical and electronic distributions.

I.B.2. Intermediate Copies

There are reproductions of a digital work being made when that work is used on a computer or when it is transmitted through a network. Intermediate copies are made when the work is read from a disk into the computer’s memory so that it can be executed or be used as data by an executing program. Other intermediate copies are made in buffers as the work is being sent and received on a network, and in the memory of the routers that are used to pass the information along the network. The world of digital works encompasses countless intermediate copies as the works are being seen, heard, or used.

This can be particularly troublesome for Internet service providers that operate servers and routers where copies are being made, since copyright infringement is generally a “strict liability” civil offense. The intent or knowledge of the infringer is considered only in determining whether an infringement is also a criminal violation (under Section 506, {FN16: 17 U.S.C. §506} all criminal infringements must be “willful”) or in determining damages (under Section 504, {FN17: 17 U.S.C. §504} statutory damages are increased for willful infringement and reduced if the “infringer was not aware and had no reason to believe that his or her acts constituted an infringement of copyright”). While this may make sense for publishers or distributors of recordings or paper copies, where they can see what is passing through their control as it was being distributed, it is essentially impossible for a service provider to monitor all the bits that are being copied at its installation and to know whether a copy is infringing or was permitted by the copyright owner or by law.

I.B.2.a. A New Right to Control Access and Use?

Since in most instances, intermediate copies need to be made to use a digital work, a strict reading of the reproduction right can turn into a right to control the access to, or use of, a digital work. United States copyright has never given the copyright owner the right to control the personal use an owner of a copyrighted work, such as requiring the payment of a fee for each time a book is read or a painting is viewed. Yet, that could be the result if you require permission of the copyright owner for every reproduction of a digital work.

What, then, gives the person who lawfully has a digital work the right to make the intermediate copies necessary to use the work? Generally, there is an exhaustion doctrine in intellectual property law that says that once there has been an authorized sale without restriction, the patent or copyright owner’s further rights are exhausted with respect to the item sold, and that item can be used or resold by its purchaser without permission of the patent or copyright owner. For copyright, this doctrine is codified in as Section 109, the so-called “first sale” provision:

Notwithstanding the provisions of section 106(3) [the distribution right], 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. {FN18: 17 U.S.C. §109(a)}

Unfortunately for permitting the making of intermediate digital copies, the language is tied to physical copies and affects only the distribution right. And none of the other statutory exceptions to the exclusive rights of a copyright owner are applicable, either, except for a limited one for computer programs in Section 117. {FN19: 17 U.S.C. §117} .

I.B.2.b. Transitory Duration?

Perhaps a solution would be to consider the intermediate copies created during the use of a digital work as of transitory duration. Then, according to Section 101, they would not be considered fixed and would not come under the reproduction right.

A work is “fixed” in a tangible medium of expression when its embodiment in a copy or phonorecord, by or under the authority of the author, is sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration. {FN20: 17 U.S.C. §101}

This seems particularly reasonable for the copies made in data communications routers as a message is passed from network to network and for the memory copy made when a computer program is loaded from disk. But copyright owners are concerned that if you say that works stored in computer memory aren’t fixed, then people can download songs from a pirate music site and no copies have been made and therefore there is no infringement unless they are later written to a disk. (Of course, if the distribution right is extended to cover transmissions or making a work available to the public, then there would be a direct infringement by the pirate music site.)

But the leading case addressing whether intermediate copies are of transitory duration found that they weren’t. In MAI v. Peak, {FN21: 991 F.2d 511, 26 USPQ2d 1458 (9th Cir. 1993)} the Ninth Circuit ruled that the copying of a computer program, or other digital work, from a disk drive into the computer’s memory met the fixation requirement of the reproduction right. There was some question whether the computer’s memory, because its contents are lost when the computer is turned off, was sufficiently permanent to be considered fixed, but the Ninth Circuit found that computer programs, when read into memory, are fixed for purposes of copyright. And because there was nothing particular to computer programs in their reasoning, it applies equally to all digital works.

Although the “transitory duration” argument may have been a way to allow the intermediate copies created when digital works are accessed, the decision in MAI v. Peak means that some other approach must be found.

I.B.2.c. Fair Use?

It appears that we are left with that old standby that allows a court to find that something that appears to be an infringement should be allowed anyway to benefit society: fair use. But not every use that somebody would like to make is a fair use. The Supreme Court, in Campbell v. Acuff-Rose Music, {FN22: 510 U.S. 569, 29 USPQ2d 1961 (1994)} said:

The enquiry here may be guided by the examples given in the preamble to Section 107, looking to whether the use is for criticism, or comment, or news reporting, and the like. The central purpose of this investigation is to see, in Justice Story’s words, whether the new work merely “supersedes the objects” of the original creation, or instead adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message; it asks, in other words, whether and to what extent the new work is “transformative.” Although such transformative use is not absolutely necessary for a finding of fair use, the goal of copyright, to promote science and the arts, is generally furthered by the creation of transformative works. Such works thus lie at the heart of the fair use doctrine’s guarantee of breathing space within the confines of copyright, and the more transformative the new work, the less will be the significance of other factors, like commercialism, that may weigh against a finding of fair use. {FN23: 510 U.S. at 578-579, 29 USPQ2d at 1965}

But the Supreme Court also found, in its five-to-four Betamax decision, {FN24: Sony v. Universal City Studios, 464 U.S. 417, 220 USPQ 665 (1984)} that recording a broadcast television program on a video cassette recorder (VCR) for playback at a later time (“time-shifting”) is a fair use because of its noncommercial nature and lack of real harm to the market of something that is essentially provided to viewers for free.

Although the Court mentioned that the VCR could also be used for building a library of past television shows, it didn’t rule on whether that went beyond simple time-shifting or was a fair use in its own right. It’s not clear whether the idea that time-shifting is a fair use is based on the user’s simply viewing the broadcast show at some later time, commercials and all, or whether a time-shifting device that removes the commercials or otherwise alters the show as broadcast is still a fair use. And if the television show were available on demand from the copyright owner, would the argument finding time-shifting a fair use still hold, or would time-shifting merely be a way of superseding the copyright owner’s on-demand service?

Fair use, as codified in Section 107, {FN25: 17 U.S.C. §107} requires us to consider four separate factors in determining whether a use is not an infringement. When we look at the four factors for intermediate copies, we get:

1.       Purpose and character of the use: The use is generally not transformative in any way, being an exact copy. But for intermediate copies, the use is necessary for the expected use of the work.

2.      Nature of the work: Many digital works, and in particular songs and movies, are primarily expressive rather than factual, so this factor likely goes against the user.

3.      Amount of the work copied: Generally, the whole work or a substantial part of the work is being copied, so this goes against the user.

4.      Effect on the market: There is little, and perhaps no, effect if the use is necessary for the personal use of something that the user already legally has, as is the case with intermediate copies.

If more weight is given to the effect on the market and the purpose of the use, which is often what is done, then intermediate copies might be a fair use.

But relying on fair use may cause other problems. The Copyright Office noted, in their report on first sale, {FN26: United States Copyright Office, Digital Millennium Copyright Act Section 104 Report,} that there is an unanticipated interaction between first sale and fair use. If I record a TV movie for time-shifting, the Betamax decision holds that such recording is a fair use. But now, I’m the owner of a particular lawful copy, and under Section 109 {FN27: 17 U.S.C. §109} get to sell it. This is clearly not the result intended, but it shows the problem of relying on fair use to justify acceptable behavior, rather than having a specific exception.

I.B.2.d. What Can Be Done

Congress has already provided an example of what should be done to address intermediate copies. For computer programs, Section 117 provides special permissions:

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:

(1) that 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) that 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. {FN28: 17 U.S.C. §117}

There is some question about whether a person who gets a packaged computer program from a store is the “owner of a copy” (which is what one expects to be after buying a program) or just a “licensee” of the program (as the software vendor generally claims in a “shrink-wrap license”). However, Section 117 indicates Congress’s recognition that intermediate copies need to be made to use a computer program, and that such reproductions are not infringing copies.

But Section 117 is limited to computer programs, which are defined in Section 101 as “a set of statements or instructions to be used directly or indirectly in a computer in order to bring about a certain result.” {FN29: 17 U.S.C. §101} While an argument can be made that any digital information (data, music, document) can be considered instructions that bring about a certain result in a computer, such as showing a picture or playing a song, such an expansive reading would read out any limitation in the definition and so isn’t reasonable.

It would be far better for Congress to provide a specific exception to the copyright owner’s exclusive rights for uses of digital works that virtually everybody believe are legitimate (except for those copyright owners trying to bootstrap a level of control because the access and use of digital works require the making of intermediate copies). In addition to the special treatment for intermediate copies of computer programs in Section 117, Congress has provided special treatment for noncommercial copying of musical recordings {FN30: 17 U.S.C. §1008} as well as a variety of other uses of copyrighted works. {FN31: See 17 U.S.C. §§108-122} Having clear rules for digital works would help conscientious users avoid copyright infringement, allow teaching people what they should or shouldn’t do, allow fair use to return to its original purpose of protecting productive and transformational uses, and avoid unintended consequences caused by the interaction of fair use determinations with other provisions of the copyright laws.

Next section: Protecting Digital Information

Copyright © 2002, Lee A. Hollaar. See information regarding permitted usage.