Copyrights on the Internet

by Eric Schlachter, Esq.

Cooley Godward LLP

1. Basics of Copyright Law. Copyright law is a constitutionally based monopoly for the creators of original and creative works that are fixed in a tangible medium of expression. Governed by the Copyright Act of 1976.

2. Monopoly Powers Granted. Copyright holders have the exclusive rights to reproduce, distribute, create derivative works of, publicly perform, publicly display and digitally perform their works.

3. Fair Use is a Limitations on Monopoly Powers. Multi-factor test:

· purpose and character of use (educational/nonprofit use v. commercial use)

· nature of copyrighted work (unpublished and fiction works favor owner; published and factual works favor user)

· amount and substantiality of portion used

· effect of use on market for the work

4. Threats to Copyright on the Net.

· Ability to make large number of copies at no reproduction cost

· No loss of quality in copies

· No meaningful costs of distribution

· Ability to distribute through remailers

5. Legislative Response: the White Paper.

· Include “transmission” in the definition of “distribution”

· Digital Performance rights. Already passed.

· Expand criminal law to include willful infringement of copyrights with retail value of $5,000 (anti-LaMacchia). Already passed.

· Prohibit devices with primary purpose to infringe copyrights

· Prohibition on tampering with copyright management information

6. Technology Approaches: Pre-Infringement.

· Limited functionality/samples

· Date bomb

· Copy protection

· Encryption/access codes

· Contracts

7. Technology Approaches: Metering.

· Applets (Java/ActiveX)

· Debit cards

· Centralized computing

· Digital signatures/digital certificates

· Copyright clearinghouse/microtransactions

8. Technology Approaches: Post-Infringement.

· Copyright litigation

· Agents

· Serial numbers/watermarks

9. Business Approaches.

· Sale of upgrades

· Sale of consulting services/systems integration

· Sale of technical support

· Sale of ancillary goods

10. Esoteric Issues to Consider.

· Is browsing infringement?

· Is linking infringement?

· Is caching infringement?

About the speaker: Eric Schlachter is an attorney practicing in cyberspace law with the Silicon Valley firm of Cooley Godward LLP. He has a law degree and an MBA in entrepreneurial finance from UCLA. He is an adjunct professor of Cyberspace Law at the Santa Clara University School of Law. He can be reached at schlachtere@cooley.com or (415) 843-5154.