Advanced Copyright Issues on the Internet - Fenwick & West LLP

The court cast the issue of direct liability as “whether possessors of computers are liablefor incidental copies automatically made on their computers using their software as part of aprocess initiated by a third party.” 65 The court distinguished MAI, noting that “unlike MAI, themere fact that Netcom’s system incidentally makes temporary copies of plaintiffs’ works doesnot mean that Netcom has caused the copying. The court believes that Netcom’s act ofdesigning or implementing a system that automatically and uniformly creates temporary copiesof all data sent through it is not unlike that of the owner of a copying machine who lets thepublic make copies with it.” 66 The court held that, absent any volitional act on the part of theOSP or the BBS operator other than the initial setting up of the system, the plaintiffs’ theory ofliability, carried to its natural extreme, would lead to unreasonable liability:Although copyright is a strict liability statute, there should still be some elementof volition or causation which is lacking where a defendant’s system is merelyused to create a copy by a third party. 67Accordingly, the court refused to hold the OSP liable for direct infringement. The courtalso refused to hold the BBS operator liable for direct infringement. “[T]his court holds that thestorage on a defendant’s system of infringing copies and retransmission to other servers is not adirect infringement by the BBS operator of the exclusive right to reproduce the work where suchcopies are uploaded by an infringing user.” 68 The court further held that the warning of thepresence of infringing material the plaintiffs had given did not alter the outcome with respect todirect infringement liability:Whether a defendant makes a direct copy that constitutes infringement cannotdepend on whether it received a warning to delete the message. This distinctionmay be relevant to contributory infringement, however, where knowledge is anelement. 69The result of the Netcom case with respect to liability for direct infringement for thetransmission and intermediate storage of copyrighted materials by an OSP was codified in thefirst safe harbor for OSPs set forth in Section 512(a)(1) of the Digital Millennium <strong>Copyright</strong>Act, 70 discussed in detail in Section III.C below.(b) The MAPHIA CaseAnother well known case, Sega Enterprises Ltd. v. MAPHIA, 71 adopted the logic of theNetcom case and refused to hold a BBS and its system operator directly liable for the uploading65666768697071Id.Id. at 1369.Id. at 1370.Id. at 1370-71 (emphasis in original).Id. at 1370.H.R. Rep. No. 105-551 Part 1, at 11, 24 (1998).948 F. Supp. 923 (N.D. Cal. 1996).- 30 -