Advanced Copyright Issues on the Internet - Fenwick & West LLP

might use such detriments as the basis for an argument of harm to the potential market for thecopyrighted material. For example, a website owner might put promotional material up on itssite that is updated frequently. If caching caused the latest updated material not to be available,the owner might argue that the “market” for its website material had been harmed.With respect to commercial sites, one can more readily imagine instances in whichcaching could cause harm to the market for copyrighted works. For example, if caching reducesthe number of page impressions generated by a home page containing copyrighted material onwhich advertising is sold, the owner could argue that its advertising revenues for ads placed inconjunction with such copyrighted material (which, in this instance, is arguably the very“market” for such material) will be harmed.In the Netcom case, the court held that potential harm under the fourth fair use factorprecluded a ruling that the OSP’s posting of the plaintiffs’ copyrighted material in its Usenetservice was a fair use. The plaintiffs had argued that the Internet’s extremely widespreaddistribution of its copyrighted religious materials multiplied the potential effects of marketsubstitution for its materials by groups using such materials to charge for Scientology-likereligious training. 1096In sum, it seems that the application of the fourth fair use factor will be highly factspecific, and there may be instances in which a copyright holder could establish sufficient harmto its potential markets from caching as to preclude a finding of fair use. It therefore seemsunwise to make a blanket assumption that the fair use doctrine will automatically protect allforms of caching.The potential harm to copyright owners from caching also introduces uncertainty withrespect to whether the implied license doctrine may apply to caching in various instances.Courts often tend to construe implied licenses narrowly. 1097 A court might therefore be hesitantto construe any implied license from a copyright owner based on its posting of material forbrowsing on the Web to cover uses (such as caching) that cause palpable harm to the owner.1096 Netcom, 907 F. Supp. at 1380.1097 See, e.g., MacLean Assocs. Inc. v. Wm. M. Mercer-Meidinger-Hansen Inc., 952 F.2d 769 (3d Cir. 1991)(defendant obtained an implied license to use a computer program prepared by an independent contractor, butonly in the furtherance of its business relationship with one particular client for which the contractor had beenengaged to support); Oddo v. Reis, 743 F.2d 630 (9th Cir. 1984) (scope of implied license included the right tomarket an unmodified computer program to third parties, subject to an obligation to account for profits to thedeveloper, but did not include a right to modify); see also Microstar v. Formgen, Inc., 942 F. Supp. 1312, 1318(S.D. Cal. 1996); Meadows, “Practical Aspects of ‘Implied License,’” Computer Law Strategist (May 1993) at1. See generally Barry & Kothari, “Other People’s Property: There May Be Implied Licenses for Content onWeb Pages,” San Francisco Daily Journal (Aug. 28, 1997) at 5.- 254 -