Copyright Law in Cyberspace Scenarios Addressing Ownership, Fair Use, Vicarious Liability and "Cybersquatting" (Trademarks) Georgia Harper Office of General Counsel University of Texas System

a. In analyzing ownership, always start with the legal principle that the author is the owner. 17 U.S.C. 201(a). The courseware will be jointly owned by each contributor of copyrightable expression if, at the time their work is created, all of them expect their contributions to be merged into a unified whole and intend to be joint owners. Childress v. Taylor, 945 F.2d 500 (2d Cir. 1991); Erickson v. Trinity Theatre Inc., 13 F.3d 1061 (7^th Cir 1994); Thomson v. Larson, 147 F.3d 195 (2d Cir (N.Y.)1998). This means that the faculty member, the University (as owner of the media center contribution), the graduate student programmer and the brother-in-law all could be joint owners of the courseware materials.

b. 17 U.S.C. 201(a), defining initial ownership, and 17 U.S.C. 101, defining a joint work, provide the starting point for this analysis, while court cases such as the ones cited above further refine the practical meaning of these statutes.

17 U.S.C. 201(a) says that initially, copyright vests in the author, while 17 U.S.C. 101’s definition of joint work describes it as a work prepared by two or more authors with the intention that their contributions will be merged into inseparable or interdependent parts of a unitary whole. As the Childress court observed, if this definition were read literally, an editor would qualify as a joint author. The Childress court, therefore, devised a more nuanced test for joint authorship.

c. Childress. In 1985, an actress named Clarice Taylor contacted the award-winning playwright Alice Childress and asked her to write a play about a famous black comedienne, "Moms" Mably. Taylor planned to portray "Moms" in the finished play. The two women's’ agents exchanged letters about the arrangement, but neither signed a contract before the work was completed. Taylor’s agent’s letter stipulated joint ownership, but Childress’s agent replied that Childress would own copyright in her original script. Ultimately, Childress rejected a draft agreement that made them joint owners and their relationship deteriorated. Finally, Taylor hired someone else to write a new play about "Moms" using Childress’s play as a starting point. Childress alleged that the derivative play infringed her copyright. Taylor asserted that she was a joint author with Childress and so could authorize the derivative creation.

The court first determined that each of the contributors must contribute copyrightable expression. It then went on to consider the issue of how to evaluate the intent requirement referenced in the statute. As mentioned earlier, this court rejected the notion that satisfying the literal words of the statute would be sufficient. Instead, the court found that there needed to be an intent on the part of both of the participants in the work to regard themselves as joint authors. In looking for evidence of whether the parties intended to be identified as co-authors, the court looked at how they were "billed" and "credited" as evidence of their implicit understandings. It also looked at the fact that Childress had rejected the contract characterizing her and Taylor as joint authors. The court concluded that Childress did not have the state of mind required for her to acquire a joint author.

d. In Thompson v. Larson, the court considered these issues and relied on Childress when it concluded that a person who contributed significantly to the successful revision of the play "Rent" (which revision led to its critical success on Broadway) was not a joint author with the playwright because the playwright retained decision-making authority over all changes to the play; was always billed as the sole author; identified himself as the sole author in contracts concerning the play; rejected an attempt by others to get him to accept a bookwriter to help him with the play, asserting that the project was entirely his; and otherwise showed no evidence that he regarded himself as a joint author with anyone.

e. These cases suggest that our faculty member would be the only author of the work if there were sufficient evidence of her state of mind to show that she does not intend any of the other contributors to be her co-author. This might well conflict with the University’s view, however erroneous (see section below about the role that money plays in ownership) that it is an author/owner based on its contributions of $15,000 and the media center’s expertise. It would be much better, of course, for her and the University to clarify their ownership interests and that of the other contributors, at least orally, and preferably in writing. The University of Texas System has a series of  Educational Materials Agreements that cover various circumstances under which such materials might be created. Each contract addresses ownership and use issues, rights to revise the work, marketing and sharing of revenue from commercialization, what each party will contribute, and warranties and indemnities about copyright infringement, among other items. Also, see the section below addressing how to change ownership.

This question has not yet been addressed by any of the courts considering joint authorship issues. So long as the contribution is independently copyrightable, it most likely would be owned by its author but implicitly licensed to the person to whom it was contributed.

a. Who pays for the work is irrelevant to copyright ownership in the work for hire context. Read that again. It is surprising how many people believe that if you "hire" someone to do work for you, you will own the copyright in the work. This may result from the name of the "work made for hire" doctrine in the copyright law. Unfortunately, this name is very misleading. Just hiring a person is not enough to make a copyright belong to someone other than the creator/author of a work. 17 U.S.C. 201(b); 17 U.S.C. 101 (definition of work made for hire)]. The leading case that analyzes these statutes and shows how work made for hire really works is Committee for Creative Nonviolence v. Reid, 490 U.S. 730 (1989).

b. Reid. Reid verbally agreed to create a statue dramatizing the effects of homelessness for the Community for Creative Nonviolence (CCNV), an association dedicated to eliminating homelessness. Reid and CCNV never discussed the issue of copyright ownership. CCNV gave Reid some instructions and suggestions about how the statue should look, and Reid accepted most of these. CCNV paid Reid in full as agreed upon his completion of the statue. Later, however, a dispute arose when CCNV created and tried to market note cards with a drawing of the statue on the front. Reid alleged that the drawing infringed his copyright in the statue. CCNV asserted that it owned the copyright in the statue under the work made for hire doctrine.

Reid explores both of the ways that an employer can be deemed the author of a work: (1) where an employee creates the work within the scope of employment, or (2) where the work satisfies the statutory test for independently contracted works made for hire.

(i) Employee working within scope of employment: If the creator is an employee and the work is produced within the scope of employment, the employer will own the work and be considered the author of the work for copyright purposes.

The Court emphasized that state laws of agency govern whether one is an employee, and the key factor in the analysis is the right of the employer to control the manner and means of the employee’s performance of the work. Other factors include whether the employer has the right to assign additional projects; whether the employee receives normal employee benefits; how taxes are handled (whether deducted by the employer); whether the employee uses the employer’s tools or his or her own tools; where the work is performed; whether the working relationship is long-term or temporary; the nature of the employer’s business and the expertise of the employee (i.e., whether the employee is doing something outside the normal business of the employer); who decides when and for how long the employee will work; and how the employee gets paid.

In determining whether a work is within the scope of employment, the courts will focus on whether the employee was hired to do the kind of work in question or how closely related it is to the employee’s primary job responsibilities; whether the employee created the work substantially on the company’s time and using its facilities; and whether the motivation to create the work was at least in part, to serve the employer, including serving fellow employees’ or the employer’s customers’ needs.

(ii) Work made for hire: If the creator is not an employee according to state agency principles as described above, but is hired to create something, and both the creator and the hiring person or entity sign a written contract before the work begins that states that the work is a "work made for hire" and, in fact, the work fits into one of the following categories, it will be considered a work made for hire:

· contribution to a collective work
· part of a movie or other audiovisual work
· a translation
· a supplementary work
· a compilation
· an instructional text
· a test
· answer material for a test, or a
· an atlas

If the transaction meets all these requirements, the person or entity hiring the creator will be considered the author of the work for copyright purposes. 17 U.S.C. 101.

The US Supreme Court ruled, not surprisingly, that Reid was an independent contractor, not an employee, but much to everyone’s surprise, it also ruled that as an independent contractor, Reid owned the statue.

The Court reached the conclusion that Reid was not an employee by relying on the fact that Reid supplied his own tools; worked in his own studio in Baltimore; was retained for less than two months; had total freedom to decide when and how long to work; was paid a sum dependent on completion of a specific job; and could hire and pay his own assistants. It also noted that CCNV did not pay any employee taxes, provided no benefits, and was not in the art business.

The Court determined that Reid, rather than CCNV, owned the copyright in the statute. In other words, it was not a work made for hire, based on CCNV’s failure to follow any of the statutory work made for hire requirements (have a contract signed by person doing the work before work begins), and on the fact that the work did not fall within one of the nine categories. The Court actually read the statute literally. Apparently, many American business people believed that this statute did not mean what it said. We should know better now, ten years later, but we don’t. Ask around on your campus whether your faculty and administrators believe that if they hired (paid) someone to create something for them, they, and not the person being hired, would own the work.

c. Is the faculty member's contribution to the multimedia course materials within the scope of her employment and therefor work for hire? According to the Reid analysis, it would appear that creating multimedia courseware materials for a university course is certainly within the scope of employment. If this is true, the University, and not the faculty member, would be the author and owner of her contribution.

Until recently, most universities would not have asserted ownership of course materials such as lecture notes, overheads, handouts, etc., permitting their faculty to own such works and take them with them when they change jobs, even though it seems quite likely that they are entitled to own such works under the work for hire statute. In fact, there was at one time a court-made exception to the work for hire statute called the “teacher exception” because it permitted teachers, instead of their employers, to own books, articles, lecture notes and other works teachers routinely author in connection with their teaching. Then, in 1976, all the case-law under the 1909 Copyright Act was integrated into the new, updated 1976 Copyright Act. The teacher exception was not included. As a result, many people do not believe that it survived codification, in other words, it no longer exists.

Courts that have considered the question after 1976 have been split on it. Most say that it did not survive (The University of Colorado Foundation, Inc. v. American Cyanamid, 880 F.Supp. 1387 (D.Colo. 1995) (finding a journal article to be work made for hire); (Vanderhurst v. Colorado Mountain College District, 16 F.Supp. 2d 1297 (D.Colo.1998) (finding a Veterinary Technology Outline to be work made for hire); one said that it should survive (Hays v. Sony Corporation of America, 847 F.2d 412 (7th Cir. 1988) (in dicta, "we might, if forced to decide the issue, conclude that the exception had survived..." at 416); and one relied on a university’s policy to determine whether work for hire applied (Weinstein v. University of Illinois, 811 F.2d 1091 (7th Cir 1987) (interpreting University policy "which is part of each professor's contract" to provide for faculty ownership of scholarly articles). On the other hand, one court recently interpreted a policy as not applying to the work in question, thus making that work subject to the statute alone, and the court determined therefore that it was work for hire (Manning v. Board of Trustees of Community College District No. 505 (Parkland College), 109 F.Supp.2d 976 (C.D. Ill. 2000) (holding that the work of a staff photographer belongs to the college and statements in policies and even in collective-bargaining agreements are insufficient under the statute to shift ownership back to the employee).

These opinions make reliance on the teacher exception as a basis for determining who owns courses in the university environment ill-advised. Even if it did once exist, it was originally applied to very different kinds of works than we are concerned with today. Even if Universities still, by and large, treat these traditional kinds of works, articles, lecture notes, text books, like they are not work for hire, online courses require so much more institutional investment than a textbook did that it is not clear at all that a teacher exception would be fair in this circumstance.

Today most Intellectual Property Polices allocate ownership in online courses by placing them either within or outside the scope of employment, though they may not say this explicitly. This is by far a better way to decide who owns what than relying exclusively on the legal principles of work for hire and/or the teacher exception; however, as the Parkland College case shows, if a University disputes its own policy, unless there is also a signed contract with the faculty member expressly stating that he or she owns copyright in a course, courts will likely reject policy as the only grounds for opting out of work for hire. So, in order to remove all doubt that an employee owns works that rationally fall within the scope of employment, there must be a contract signed by both of them to that effect.

Policies offer other benefits though. They allow us to go beyond the “winner take all” approach of the law where either the employer owns the work or the creator owns it. They allow us to share rights. They can reserve certain rights to contributors who will not own an online course. For example, UT System’s Policy says that where a faculty member owns a course, UT reserves a nonexclusive right to use the course for educational and research purposes, as well as a right to recover its contribution and share in commercial royalties if the University has contributed significant kinds or amounts of resources to the creation of the work.

There are no cases that advise us as to whether an agreement, such as an employment agreement, that commits both parties to abide by institutional policies, might qualify to shift ownership back to the creator where the policy says that the creator wil be the owner. As a practical matter, a dispute between a university and a faculty member over who owns a course that the policy says the faculty member owns may not be likely to come up in a lawsuit: A university would have to be attacking its own policies as insufficient to do what the policy says it is doing. This is not a good position from which to prosecute a lawsuit.

a. The brother-in-law's illustrations are a good example of this situation. Are they works made for hire under the law? Probably not, because there's no mention of a contract signed by both the faculty member and the brother-in-law before the work began and it's not clear whether the work would fit into any of the nine statutory categories. The brother-in-law probably is not the faculty member's employee either. That means he will be a joint owner if he is contributing copyrightable expression, intends that expression to be merged into the unified work as a whole, and he and the faculty member both share an intention that he will be a joint owner with her.

b. If that's not what the faculty member wants and it is too late or otherwise impossible to make the work a work made for hire, she should make clear her intentions by having her brother-in-law sign a copyright assignment. This is a contract that can be signed at any time to transfer the copyright from the author/artist to someone else. This won't make the faculty member an author of the brother-in-law's contribution, as the work for hire doctrine would have, but it's the second best thing - she will be a copyright owner by way of assignment.

Although a work belongs to the author initially, there are at least three ways the department could reasonably expect at least a share of commercialization revenues:

a. If the University considers faculty-authored educational materials to be works within the scope of employment, the University, not the faculty member, would be considered the author under copyright law and would be entitled to all commercialization revenues;

b. If the University has commissioned the work and has followed all the requirements of the work-for-hire statute, the University would be considered the author of the work and entitled to all revenues;

c. If the University permits faculty members to own their educational materials, it still may have a policy that retains for it a right to share in profits from faculty owned works created using University resources. If this work was created using University resources, the University would share in profits from its commercialization even without being the author or owner of the work.

2. Does fair use completely cover whatever the faculty member wants to do or are there limits to what is fair?

17 U.S.C. 107 codifies almost 2 centuries of fair use jurisprudence. This statement might suggest that fair use law is well-settled and easy to understand. Nothing could be farther from the truth. While the statute is simple and straightforward, its application to educational uses of others’ works, and most critically, its application in the electronic environment, is completely up in the air. There are almost no cases entirely on point and the few cases there are vary significantly from educational fact patterns, and can have fairly inconsistent holdings from circuit to circuit, making it very difficult to generalize from them.

a. First, the statute: It has two parts, an introductory paragraph and a set of four factors to consider in evaluating whether a particular use is fair.

"Notwithstanding the provisions of sections 106 and 106A, the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include:

1. the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
2. the nature of the copyrighted work;
3. the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
4. the effect of the use upon the potential market for or value of the copyrighted work.

The fact that a work is unpublished shall not itself bar a finding of fair use if such finding is made upon consideration of all the above factors."

The fair use statute does not give educators a blanket exemption from copyright law. Educators, like everyone else, must keep their uses of others' works within certain bounds. Each item to be included should be evaluated separately, except where there are many items from the same source. In that case, the items from the same source should be evaluated together as to the amount that will be used (the third of the four factors).

b. There are hundreds of cases that illustrate how to do the fair use test. The most helpful are ones that come closest to educational fact patterns. These include, for research copying, American Geophysical Union v. Texaco, Inc., C.A.2 (N.Y.) 1994, 37 F.3d 881, amended and superseded 60 F.3d 913, certiorari dismissed 116 S.Ct. 592, rehearing denied; for coursepacks, Basic Books v. Kinko’s Graphics, 758 F.Supp. 1522 (S.D.N.Y. 1991) and Princeton University Press v. Michigan Document Services, Inc., C.A.6 (Mich.) 1996, 99 F.3d 1381, certiorari denied 17 S.Ct. 1336; for taping programs off the television, Sony Corp. v. Universal City Studios, Inc., 464 U.S. 417 (1984); for critical commentary (parody), Campbell v. Acuff-Rose Music, Inc., U.S. Tenn. 1994, 114 S.Ct. 1164, on remand, 25 F.3d 297. You will notice that none of these addresses the incorporation of others’ works into on-line educational course materials. In fact, there are no cases to study for specific guidance as to how to use the fair use test in the multimedia context. Instead, we must look at examples of how courts apply each factor in very different contexts, then try to take into account the variance of the case’s fact pattern from our fact pattern, keeping in mind the fact-intensive nature of the fair use inquiry -- change one fact and the entire outcome of the test can change dramatically. For these reasons, a detailed analysis of all the cases that elucidate the use of the fair use test is beyond the scope of this article. For practical advice about how to use the test, please see Using the Four Factor Fair Use Test.

a. The fair use statute offers general guidance and requires that the faculty member use a weighing and balancing test to determine the likelihood that a particular use will be fair. As a result, it tends to be subjective and open to differing opinions as to the results in any case. This makes some people a bit nervous, because you can never be sure that you have correctly determined whether a use is fair. Nevertheless, it is not that difficult to do, and faculty members can learn to use it. U.T. System offers guidance in Using the Four Factor Fair Use Test.

b. Before using the fair use test, one may wish to see whether a particular proposed use might fit within one of the many sets of Guidelines that have been developed over the years by parties considered stakeholders in the fair use debate. There are Guidelines for:

(i) Coursepacks
(ii) Digitizing Image Archives
(iii) Multimedia Works
(iv) Distance Learning
(v) Use of Sheet Music
(vi) Off-air Taping (see page 18 of the Copyright Office’s Circular 21 to which this link will take you)

c. U.T. System has developed its own guidelines. Our Rules of Thumb for Multimedia suggest safe amounts of others' works to include in on-line works. The fact that a faculty member’s use does not fit within an appropriate set of Guidelines or Rules of Thumb does not mean she can't use the materials. Instead, she should proceed with the statutory fair use test. The Rules of Thumb, just like any set of Guidelines, describe a certain subset of the whole of fair use that many people regard as pretty safe, but, they are not the limit of fair use.

4. What if she wants to include something that seems to go beyond fair use?

a. Exceeding fair use does not mean the faculty member can't use the materials - rather, it means that she needs to get a license from the copyright holder, or in common terminology, get permission. Even if educators take full advantage of the fair use statute, there are times when a particular use is pedagogically important even if it is more than what may be a fair use.

b. It is easier to get permission to use text than to use images and music. The Copyright Clearance Center is highly organized and responsive to requests to use book chapters and articles. The resources available to license the use of other media lags far behind.

a. If the faculty member decided that the use was not fair and therefore she had to ask permission and the owner says no, that's the end of it. She’ll have to replace that material with something else.

b. On the other hand, if there is a reasonable argument to be made that the use is fair, and she was asking permission to be on the safe side (since fair use is always somewhat nebulous) she can still rely on fair use even if the owner says no. See, Campbell v. Acuff-Rose Music, Inc. She should be very sure of herself in this instance, however, because she could be challenged in court.

a. There is risk involved in everything a University does. In this area, Universities may prefer to eliminate the risk altogether. If it cannot be completely eliminated, it should be up to those who will have to pay the cost of an infringement lawsuit to decide the level of risk with which they are comfortable. For example, the University of Texas System has accepted a certain level of risk by creating its Copyright Policy with explanations of how to use the fair use test. Similarly, publishers decide to accept a certain level of risk when they establish their policies that set word limits for unlicensed quotations.

b. An unlocatable or unresponsive copyright owner presents a risk that the owner will some day appear and be upset with a use of his or her work. This may not be a great risk, especially when a thorough search has revealed no owner. Nevertheless, it's a risk the University or the publisher should decide whether to take, not one for the faculty member alone to decide.

7. May she use materials that her library has licensed in her on-line course?

Use of the licensed materials is controlled by a license agreement. She should work with her library to consult the relevant agreement to determine what uses it permits.

8. Is it fair use to change the images she wants to use?

a. Many people believe that if they change an image enough, they cease to have liability for infringement. This probably stems from a confusion of one’s liability for infringement with one’s likelihood of getting caught. But the two are not the same thing.

b. 17 U.S.C. 106 gives the author the exclusive right to create derivative works. A derivative work is any work based upon or largely incorporating another work, such as a translation, a movie or screenplay based on a book or a sculpture made from a photograph. 17 U.S.C. 101 (definition of derivative work). Thus, a faculty member cannot modify a work without permission, unless the modification would be a fair use. Rogers v. Koons, 751 474 (S.D.N.Y. 1990), amended on reargument by 777 F. Supp 1, judgment affirmed 960 F.2d 301, cert denied 113 S.Ct. 365; Central Point Software, Inc. v. Nugent, 903 F.Supp. 1057 (E.D. Tenn. 1995).

c. On the other end of the "misbelief" continuum, people believe that there’s a magic percentage under which any change to another’s work is a fair use. That is also incorrect. As indicated above, the fair use test is more complex than any set of numbers could convey, although some sets of Guidelines purport to quantify the bounds of fair use. These have, for the most part, proven too restrictive to be of much practical value. Nonetheless, it is true that fair use applies to the creation of derivative works, just as it applies to all the other exclusive rights of the copyright owner, so it can be a fair use to create a derivative work. The faculty member will need to perform the fair use analysis in order to determine whether the particular use she wishes to make of another’s image might be fair under all the circumstances.

a. This question is very difficult to answer because the rules defining the term of copyright have changed many times over the years, most recently in 1998. Sony Bono Copyright Term Extension Act. Each work is governed by the rules in effect at the time the work was created, subject to any changes that extend the term for works still in their term of protection. The statutory references include 17 U.S.C. Sections 301, 302, 303, 304 and 305.

b. For materials that were published before March 1, 1989, the absence of a copyright notice would, in most cases, place the work in the public domain. All works published before 1923 would also be in the public domain. There's a handy chart on-line that explains more about When Works Pass Into the Public Domain.

c. A recent case finds that photographs of public domain works that are meant to do no more than faithfully reproduce those works are not protected by copyright. The Bridgeman Art Library, Ltd. v. Corel Corporation, 1998 WL 790917 (S.D.N.Y.). So, if any of her photographs are of public domain works, even if the later published reproductions claim copyright protection, they may nonetheless be reproduced and distributed by anyone without permission.

d. A special set of rules applies to unpublished materials. Lolly Gasaway's chart explains these also. If the unpublished material is not published under the authority of the copyright owner prior to December 31, 2002, it will pass into the public domain on that date or 70 years after the author's death, whichever is later. If unpublished material is published under the authority of the copyright owner prior to December 31, 2002, it will be protected until 2047. 17 U.S.C. 303.

10. Does she have the right to transmit the multimedia work to distant students?

Section 110 of the Copyright Act authorizes nonprofit educational institutions to display and perform copyrighted works in the classroom and to transmit some of those works (not audiovisual works) to distant locations that serve as regular places of instruction. 17 U.S.C. 110(1) and (2). The reduced authorization for transmissions has been particularly problematic as educators integrate distance learning into classroom based instruction.

The Digital Millennium Copyright Act, passed in October 1998, called for the Copyright Office, with input from educators and copyright owner industries, to report to Congress by the end of April 1999, its recommendations for changing Section 110 to facilitate the use of digital technologies in distance education. The Copyright Office issued its Report in May, 1999. In March, 2001, a bill was introduced to make these recommendations into law.

The TEACH Act (Technology, Education and Copyright Harmonization Act) will:

i. eliminate distinctions among types of works that can be transmitted in a secure environment;

ii. exempt copies and distribution that must be done to make a permitted transmission;

iii. remove the limitation to classrooms and other places devoted to instruction;

iv. emphasize that the exemption has no effect on fair use

v. limit digital performances of audiovisual works to reasonable portions

vi. exclude "instructional materials" prepared for the digital educational market from the exemption

vii. require the use of technologies that prevent recipient copying as a condition for qualifying for the exemption

Unfortunately, the bill does not appear likely to pass this session of Congress. Until it passes, we must continue to rely on fair use to bridge the gap between what can be displayed and performed in classrooms and what can be transmitted to remote students. The provisions of this bill do, however, strongly suggest that the activities they encompass would likely qualify as fair use.

11. If the work is commercialized, will publishers accept her reliance on fair use?

a. If she used the fair use test, she would see that the first of the four factors asks whether the work is for nonprofit educational purposes or commercial purposes. The answer to this question affects the evaluation of the other three factors. Sometimes a use that is fair in a nonprofit educational context is not fair in a for-profit commercial context. That's the nature of the test - change the facts and the results change, sometimes dramatically.

b. Most publishers limit their reliance on fair use to narrow circumstances such as using short quotations in works of commentary and criticism. Maxtone-Graham v. Burtchaell, 803 R.2d 1253 (C.A. 2 (N.Y.) 1986), cert denied 107 S.Ct. 2201, 481 U.S. 1059. In all likelihood, what was reasonably fair use for the classroom will not be considered fair use when the work gets published.

Scenario 3: Liability

A faculty member establishes a web site for his class on electronic journalism and requires each student to create a web page to be included in the site. One of the student pages consists of a critique of various newspaper and magazine web sites. She includes the logos of each publisher and illustrates her critiques with extensive "screen shots" from the publishers' sites. The faculty member also establishes a listserv for the class and uses it to circulate and discuss copies of well-written articles that he finds on some of those same sites, as well as on Clarinet and Nexis news services (databases licensed by the University).

1. Who is responsible if these course-related materials infringe someone's rights?

a. Individuals are responsible for their infringements. It is important to inform students and University employees, including faculty members, about their individual responsibility for their infringing acts under copyright laws. In all likelihood, a copyright owner would sue the University too, but that may not insulate direct infringers from the full force of a lawsuit.

b. 17 U.S.C. 504 sets very harsh penalties for infringement: the court can award up to $100,000 for each separate act of willful infringement. Willful infringement means that the infringer knew she was infringing and did it anyway or acted with reckless disregard for the rights of the copyright owner. See, Childress v. Taylor; Twin Peaks Productions, Inc. v. Publication Intern. Ltd., 996 F.2d 1336 (C.A. 2 (N.Y.) 1993). Ignorance of the law, though, is no excuse. If an infringer doesn't know she is infringing, she still will be liable for damages - only the amount of the award will be affected. Then there are attorneys' fees. 17 U.S.C. 505.

c. There is one special provision of the law that allows a court to refuse to award any damages at all if it so chooses, even if the copying at issue was not a fair use. It is called the good faith fair use defense 17 USC 504(c)(2). It only applies if the person who copied material reasonably believed that what he or she did was a fair use - as would likely be the case if she followed her University's Copyright Policy! If she qualifies for this defense, she'll be a very poor prospect for a lawsuit, as will her University. On the other hand, if she disregards sound advice about fair use, a court would be free to award the highest level of damages available. This would make her and her University handsome targets.

d. It seems unlikely that a University could disclaim the infringements of its employees (perhaps as being outside their scope of employment or contrary to policy) when the activity involves the University’s core research and teaching mission. For example, the laws of agency and/or vicarious liability are likely to assign responsibility not only to the individual who infringes, but to the employer as well in a case where (i) the act is within the general scope of authority, occurs substantially within work hours and at work and serves the interests of the University or (ii) the University has the right and ability to control the conduct of the infringer and realizes a direct or even an indirect benefit from the infringing activity, as might be the case where the creation of courseware is involved. With respect to agency liability, even if an act is contrary to express orders, so long as it is within the general scope of authority, the University would be liable. For more information on this subject, see "University Liability for Faculty Infringements."

e. Universities could be contributory infringers where students are infringing with the knowledge of a faculty member who is involved in some material way with the infringement, such as requiring classroom activities that are infringing, knowing that such activity is prohibited. In such a case, the faculty member's knowledge can be imputed to the University and it will be found contributorily liable. Even if the faculty member does not know that infringing activity is taking place or whether an activity is infringing, if he reasonably should have known, the University will be contributorily liable. Casella v. Morris, 820 F.2d 362, 365 (11th Cir. 1987).

f. Nonetheless, today state entities are immune from suit for copyright infringement under Chavez v. Arte Publico Press, --- F.3d --- (CA 5 2000) and other cases holding the same with respect to other areas of intellectual property law (Florida Prepaid Postsecondary Education Expense Board v. College Savings Bank, ___ U.S. ___ (1999).

g. Even though state institutions are immune from suit for copyright infringement, immunity is not complete. There are other avenues through which an aggrieved copyright owner can seek redress besides the federal courts. I have written about the implications of Chavez elsewhere and recommend that universities not jump to the conclusion that they need not abide by copyright law.

2. Are these activities fair use?

a. Extensive screen shots: Posting a single screen shot would likely be fair use. The more screen shots included, the weaker the argument becomes. Most importantly, most fair use guidelines suggest that a key element in maintaining the exemption is limiting access the the materials to students registered for the class. Arguably, with this limitation in place, it would be fair use to display a larger number of screen shots. It is very hard to say where the cut-off should be.

One might argue that since the materials are available on the publishers' sites without restriction, it should be ok to copy and repost them for any purpose. At least one court has not been sympathetic to this argument. Los Angeles Times v. Free Republic, No. 98-7840 MMM (D.C. Cal., filed Sept. 28, 1998). There are many reasons for web publishers to prefer that users come to their sites rather than access their materials on others' sites. Additionally, publishers may argue that the implied license one has to make the copies necessary to visit a web site does not include the right to copy and post significant portions of the site elsewhere.

b. Articles circulated on listserv: The same case sited above finds that posting entire articles online is infringing, but again, with appropriate limitations and an educational purpose, an article should be able to be used safely. Circulating an article on a listserv limits distribution, especially if students are warned against further distribution.

3. Would it make a difference if the faculty member and student linked to the other sites rather than making copies of the materials at the publishers' sites?

Linking is almost always considered to be not infringing. The few times when courts have suggested that it might be infringing involve either known infringing material at the linked-to site (Intellectual Reserve, Inc. v. Utah Lighthouse Ministry, Inc., No. 2:99-CV-808C (C.D. Utah, filed Oct. 13, 1999)) or unfair competition. Shetland Times Ltd. v. Dr. Jonathan Willis and Zetnews Ltd., Scotland Court of Sessions (Oct. 24, 1996); Ticketmaster Corp. v. Microsoft Corp., CV 97-3055 RAP (C.D. Cal., filed April 28, 1997).

4. What about using the publishers' trademarks to improve the appearance of a page?

Trademarks, even though colorful and sometimes clever or artistic in nature, are not decorations. They have a very specific function: to designate the origin of products or services. In order to maintain their protection, trademark owners must not let their marks be used by anyone other than themselves or their licensees. Don't be surprised if a trademark owner objects to the use of its marks for any purpose, no matter how innocuous it might seem to the user, other than to designate the owner's goods or services.

5. What if the student page was a personal page rather than a class assignment?

Universities are eligible to claim the protections of Title II of the Digital Millennium Copyright Act, which limits the liability of Internet service providers for the infringements of users. Student personal pages would be precisely the kind of material that would qualify. For more information about the procedures to take advantage of these liability limitations, see Complying with the Digital Millennium Copyright Act.

6. Who owns the student page and what may the faculty member do with it after the class is over?

Following the rules of ownership set forth above under Scenario 1, the student would own the web page he created. There may be an implied license for the University and the faculty member to use the page at least for the semester during which the student was enrolled in the class. Student handbooks might require some further grant of rights to the University as a condition of enrolling the student. Intellectual Property Policies can also reserve certain rights for the University in exchange for the use of University facilities, among other things.

Scenario 4: Domain Name Cybersquatting

The University business office received a letter from a company offering to sell it five domain names that include the University's trademarks or words that closely resemble the marks. The prices ranged from $1000 to $10,000 each. This prompted the University to do a search on the Web to see if other domain names incorporating University marks were already in use. To the business officer's great surprise, he found that there were over 850 pages online with domain names that included just one of the University's 15 registered marks. 

1. What should the business officer do?

Until recently there was little anyone could do about the practice called, "cybersquatting." Trademark owners were at the mercy of anyone who registered domain names containing their marks before the owners did. Today, however, there are several approaches one may take to stop this and other uses of domain names that infringe registered marks or dilute the strength of famous marks.

The new Trademark Cyberpiracy Prevention Act creates a cause of action against anyone who, with a bad faith intent to profit, registers, traffics in or uses a domain name that is identical to, confusingly similar to, or dilutive of another's trade or service mark.

Though the list is not exhaustive, the statute lays out eleven factors that may be taken into consideration in determining bad faith, such as whether the cybersquatter has trademark rights in the domain name, has ever offered bona fide goods or services under the mark, has an intent to divert the mark owner's customers, tarnish reputation or disparage the owner's mark, offers to sell marks to the owner or has a history of offering to sell marks to their owners, has warehoused marks, provided false or misleading contact information or deliberately failed to update such information. There is also a cause of action in rem where the registrant cannot be located.

While causes of action for infringement are available for any mark, causes of action for dilution are limited to famous marks, as set forth in the Federal Trademark Dilution Act.

For a fast and efficient way to resolve disputes over domain names, trademark owners may use the ICANN Uniform Dispute Resolution Procedure (UDRP). ICANN (Internet Corporation for Assigned Names and Numbers) is the agency with responsibility for administration of the domain name system. For a fraction of the cost of a lawsuit and in a fraction of the time, a trademark owner can have a determination by a panel of one or three persons whether a domain name registrant acted in bad faith in registering and using a domain name that is the same or similar to a trademark. The remedies include cancellation or transfer of the domain name. In its first 6 months of operation (December 1999 through May 22, 2000), this process resulted in over 361 published decisions affecting 546 trademarks. These are available online at www.icann.org. The vast majority of these were default judgments. Harvard Law School's Berkman Center for Internet and Society hosts a site that makes it possible to search ICANN decisions at eon.law.harvard.edu/search_udrp.html.

2. Is there a down side to not taking action?

Trademark owners who fail to police their marks risk losing protection. Trademarks associate goods or services with a particular source. When the association breaks down, the marks lose their value. Eventually, unpoliced marks are considered to have been abandoned and courts will not enforce even egregious infringements against them.

3. How much might it cost to "enforce" marks in cyberspace?

While it may be expensive to hire a trademark attorney to design and implement a policing strategy, the cost of failing to police marks is expensive too. Any University that earns money from trademark licensing would be well advised to invest some of those revenues in a policing program, including a cyberspace component.

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