Copyright Principles in Action

A person copying, distributing, publicly performing, or publicly displaying a copyrighted work or creating a derivative work based on the original copyrighted work each without the permission of or a license from the copyright owner will be a direct infringer. Moreover, the concept of vicarious liability can extend responsibility to someone who did not directly violate the rights of the copyright owner. The concept is that such an entity facilitated the violation through its instrumentality and control. Originally the doctrine was formulated in cases involving dance halls. The "primary" infringers were musicians who performed songs or instrumental pieces without a license. But the court found the employer of the musicians and owner of the dance hall in which they performed to also be liable. In those cases, the premises were the instrumentality and the ability to hire and fire employees showed control.

A leading case after the dance-hall era, Shapiro, Bernstein & Co. v. H.L. Green 316 F.2d 304 (2d Cir. 1963), arose out of a more subtle fact situation. The owner of a department store had franchised space in the store to a record retailer who was the primary infringer. But the court held the store owner to be vicariously liable since it had the power to discharge certain of the franchisee's employees (even though it was not specifically aware of the bootleg records) and because the rent it charged was based on a percentage of the primary infringer's gross revenues.

In a later case enunciating the contributory infringement doctrine (Gershwin Publishing Corp. v. Columbia Artists Management, 443 F.2d 1159 (2d Cir. 1971)) the contributory infringer was not the employer of the party that infringed, but the court nevertheless found it was knowledgeable about and in a position to police the infringing conduct and derived substantial financial benefit from the infringing conduct.

Regarding "facilities" the use of which might also be a basis for a claim of contributory infringement, another doctrine is of interest. This is the "staple items of commerce" doctrine. The Supreme Court has held that manufacturers of equipment which can be used for non-infringing purposes as well as for infringing purposes and which is sold in everyday transactions (i.e. is not custom made for infringers) cannot be liable for contributory infringement. Sony Corp. v. University City Studios, Inc., 464 U.S. 417 (1984)(VCRs were staple items of commerce even though they might be used for non-time-shifting copying of videos). This doctrine would seem to have little application to universities since they do not produce and market computers. Some would argue that manufacturing is not essential to the defense and that merely "providing" or making the instrumentality "available to" the infringing user should suffice. This would certainly be closer to the university context. The Netcom case [link to Netcom discussion in App. G] detailed in Appendix G involved the contributory infringement concept, although the opinion noted that liability should not follow mere passive, innocent involvement.

Projecting these tests into the typical university computer system context, one would expect no successful contributory infringement claims when a student used the university's equipment to display or distribute copyrighted material without a license. The university would receive no financial gain from the display or distribution of the material and seemingly has no control over the student (beyond prohibiting such use in its acceptable use policy which should not be held against it). Indeed, in almost all such cases, the university would not even be aware that the material was posted or transmitted or downloaded/printed.

But if someone identifying herself as the copyright owner had discovered the infringing use and put the university on notice emphasizing that the computer system employed by the student was an instrumentality of the school and that, despite its power to do so, the school had not brought misconduct charges against the student, the university would now be on notice of the supposedly infringing material. From that time forward, there is a risk of the University being held to be a direct infringer as well as arguably a contributory infringer. The Supreme Court has not ruled on these issues, but lower court decisions appear to be groping their way toward some governing principles [link to VII] (discussed in detail with regard to student web pages and Internet bulletin boards).

E. Remedies

To bring suit for infringement, a copyright holder must first register its copyright with the Registrar of Copyrights in the Library of Congress. After registration and a successful suit against an infringer, the copyright holder would be entitled to recover its actual damages caused by the infringement i.e. lost sales and the infringer’s profits from the infringing acts (except to the extent that the latter have already been factored into the former). In the alternative, it may elect to recover "statutory damages" of no less than $500 and no more than $20,000 (for all infringements of any given work occurring after the date of registration) with the exact amount in that range to be set by the court. Act, sec. 504. The court also has discretion to award attorney fees to the prevailing party.

If the evidence shows "willful" infringement, the court may also increase the statutory damages up to a sum of $100,000. It is very likely that the State would not indemnify an employee guilty of willful infringement. Although knowledge that the copied work was copyrighted is not essential for direct (as opposed to contributory) infringement, if the court finds that the infringer had no reason to believe that he was infringing, it may reduce statutory damages down to a sum of $200. Although attaching the copyright notice has not been required since the United States ratified the Berne Convention on Copyrights in 1988, it is still a wise procedure for copyright holders to follow. Section 401(d) of the Act is important to note. It states that "if a notice of copyright … appears on the published copy … to which a defendant in a copyright infringement suit had access, then no weight shall be given to such a defendant’s interpostion of a defense based on innocent infringement in mitigation of actual or statutory damages… " (except the public university employee’s claim of good faith belief that the copying was a fair use discussed in the following paragraph).

The statutory damages may be remitted altogether in cases where the infringer is an employee of a non-profit educational institution who acted in the scope of employment and with a reasonable belief that his or her use of the copyrighted work was fair use. This shows how important a good faith evaluation of the four fair-use factors can be. Even if the use turns out not to be "fair", the University infringer can escape damages if there was a good-faith belief at the time of the copyring (supported by the infringer’s objectively reasonable consideration of all the factors) that it would be a fair use.

Other remedies include the seizure of the infringing material still in the control of the infringer if the infringer has been convicted of criminal infringement (infringing acts done willfully for the purpose of commercial advantage or private financial gain). Even in a civil infringement action, the court may order destruction of infringing inventory. Also, the court can enjoin the defendant from continuing to infringe that copyright in the future.

F. The Eleventh Amendment of the U.S. Constitution

This Constitutional amendment might protect any state university from a copyright infringement suit seeking damages in federal court. See e.g. BV Engineering v. University of California at Los Angeles, 858 F.2d 1394 (9th Cir. 1988) cert. den. 489 U.S. 1090 (1989)(assuming without deciding that Congress could abrogate the Eleventh Amendment under the Patent and Copyright clause of the Constitution, but finding Congress did not articulate such an intention thus preserving the immunity). Congress attempted to correct that oversight of failure to expressly articulate by enacting section 511 of the Copyright Act. However, a subsequent Supreme Court decision which held abrogation could be based on the Commerce Clause of the Constitution was soon overruled in Seminole Tribe of Florida v. Florida, 116 S.Ct. 1114 (1996)(analizing the Indian Commerce Clause) thus casting doubt upon the validity of abrogations purporting to be based on anything but the Fourteenth Amendment.

Subsequent lower court cases have seemed to support the interpretation Seminole Tribe that the Eleventh Amendment protects States from copyright infringement suits in federal courts. See e.g. Chavez v. Arte Publico Press, 139 F.3d 504 (5th Cir. 1998); Rodriquez v. Texas Comm’n of the Arts, 992 F.Supp. 876 (N.D. Tex. 1998); Jehnsen v. New York State Martin Luther King Inst. for Nonviolence, 13 F.Supp.2d 306 (N.D.N.Y. July 7, 1998). Cf. Genentech Inc. v. Regents of the University of California, 143 F.3d 1446, 1450 -54 (Fed. Cir. 1998)(No abrogation through Article I-derived patent statute, but finding waiver as to federal court jurisdiction for declaratory judgment action after defendant threatened to sue for patent infringement).

... Continue to Part IV