COPYRIGHT

COPYRIGHT

A bundle of intangible rights granted by statute to the author or originator of certain literary or artistic productions, whereby, for a limited period, the exclusive privilege is given to that person (or to any party to whom he or she transfers ownership) to make copies of the same for publication and sale.

A copyright is a legal device that gives the
creator of a literary, artistic, musical, or other
creative work the sole right to publish and sell
that work. Copyright owners have the right to
control the reproduction of their work, includ-
ing the right to receive payment for that repro-
duction.An author may grant or sell those rights
to others, including publishers or recording
companies. Violation of a copyright is called
infringement.

Copyright is distinct from other forms of
creator protection such as PATENTS, which give
inventors exclusive rights over use of their
inventions, and TRADEMARKS, which are legally
protected words or symbols or certain other dis-
tinguishing features that represent products or
services. Similarly, whereas a patent protects the
application of an idea, and a trademark protects
a device that indicates the provider of particular
services or goods, copyright protects the expres-
sion of an idea.Whereas the operative notion in
patents is novelty, so that a patent represents
some invention that is new and has never been
made before, the basic concept behind copyright
is originality, so that a copyright represents
something that has originated from a particular
author and not from another. Copyrights,
patents, and trademarks are all examples of what
is known in the law as INTELLECTUAL PROPERTY.
As the media on which artistic and intellec-
tual works are recorded have changed with time,
copyright protection has been extended from
the printing of text to many other means of
recording original expressions. Besides books,
stories, periodicals, poems, and other printed
literary works, copyright may protect computer
programs; musical compositions; song lyrics;
dramas; dramatico-musical compositions; pictorial, graphic, and sculptural works; architec-
tural works; written directions for pantomimes
and choreographic works; motion pictures and
other audiovisual works; and sound recordings.
History of Copyright Law
U.S. copyright law grew out of English COM-
MON LAW and statutory law. When the printing
press was developed in the fifteenth century,
rights for the reproduction of written works
extended to printers rather than to authors. In
England, a printers’ guild, the Stationers’ Com-
pany, claimed for itself the exclusive right—in
effect, a monopoly—on written works. It was
not until 1710 that Parliament passed a statute
relating to copyright. That law, called the Statute
of Anne, established authors’ rights to control
the reproduction of their work after it was pub-
lished. It also created a term of protection of 28
years from the date of publication. After that
time, an author’s work entered the public
domain, meaning that anyone could print or
distribute it without obtaining the author’s per-
mission or paying a royalty, or fee, to the author.
Other European countries developed similar
laws in the late eighteenth and early nineteenth
centuries.
Under the British system, the author
retained a common-law right to ownership of
his or her work until publication. After publica-
tion, copyright was established as a statutory
right, protected by the Statute of Anne. U.S.
copyright law retained this distinction between
prepublication common-law rights and post-
publication statutory rights, until 1976.
By the late eighteenth century, the protec-
tion of intellectual property as a means of
advancing the public interest was considered
important enough to receive mention in the U.S.
Constitution. The Patent and Copyright
Clause—Article I, Section 8, Clause 8—of the
U.S. Constitution empowers Congress “To pro-
mote the Progress of Science and useful Arts, by
securing for limited Times to Authors and
Inventors the exclusive Right to their respective
Writings and Discoveries.” Congress passed its
first copyright statute in 1790—and has sub-
stantially revised copyright law four times, in
1831, 1870, 1909, and 1976.
Revisions in the copyright law have been
driven largely by commercially significant
changes in technology. In 1802, for example,
graphic prints came under copyright protection,
establishing the notion that the Constitution’s
language regarding copyright not be interpreted
to apply literally to “Writings” alone. In 1831,
musical compositions were incorporated into
copyright protection, and in 1870, paintings,
statues, and other works of fine art were placed
under copyright protection.
The distinction between common-law pro-
tection for unpublished works and statutory
protection of published works received increas-
ing criticism in the twentieth century, particu-
larly as the notion of publication changed greatly
with technological innovations in communica-
tion. Congress removed this distinction in the
landmark Copyright Act of 1976 (17 U.S.C.A.
§ 102(a)). According to this statute, an author
receives copyright protection as soon as a work is
recorded in a concrete way—when, for example,
it is written on a piece of paper, recorded on an
audiotape, or stored on a computer disk. Any
unauthorized copying of the work is subject to
an infringement suit and criminal charges. The
1976 act also allows copyright protection of works that derive from the original, such as motion pictures, CD-ROM multimedia editions,
and other adaptations. These subsequent creations
are known as derivative works.
Many features of the 1976 act make U.S.
copyright law conform more to international
copyright standards, particularly with regard to
the duration of copyright protection and to the
formalities of copyright deposit, registration,
and notice. These changes have been greatly
influenced by the most important international
copyright treaty, the Berne Convention for the
Protection of Literary and Artistic Works (828
U.N.T.S. 221, S. Treaty Doc. No. 99-27). In 1988,
the United States passed the Berne Convention
Implementation Act (102 Stat. 2853), which
made the nation an official member of the treaty
as of 1989. Section 2(a) of this act holds that
provisions of the treaty are not legally binding in
the United States without domestic legislation
that specifically implements them.
U.S. copyright law has continued to evolve
toward greater conformity with international
copyright standards. In the 1990s, for example,
the Berne Convention added 20 years to the
minimum standard for copyright duration,
changing it to the length of the author’s life plus
70 years. U.S. copyright law followed suit in
1998, with the passage of the Sonny Bono Copyright
Term Extension Act.

Copyrightable Works
The 1976 Copyright Act provides that copyright
protection “subsists . . . in original works of
authorship fixed in any tangible medium of
expression, now known or later developed” (17
U.S.C.A. § 102(a)). Thus, virtually any form of
fixed recording is protected, no matter how new
the technology.
Originality is the most important quality
needed by a work in order for it to receive copyright
protection.Originality is not dependent on
the work’s meeting any standard of aesthetic or
artistic quality. Thus, a work need not be fine art
to be copyrightable.

Works That Are Not Copyrightable
Copyright protects the expression of an idea
or vision, not the idea itself. In legal terminology,
this concept is called the idea-expression
dichotomy, and it has been an important feature
of legal reasoning related to copyright. Ideas,
procedures, processes, systems, methods of
operation, concepts, principles, and discoveries
are not within the scope of copyright protection.
Other works that are not copyrightable are
words and short phrases, including slogans;
blank forms for recording information (such as
bank checks); and works containing no original
authorship (such as standard calendars or simple
phone listings).
Some works are not copyrightable because
they are not fixed in a tangible medium. These
include unrecorded dance choreography, and
unrecorded speeches, lectures, and other vocal
performances. Although typefaces are tangible,
they traditionally have been regarded as lying
outside of copyright protection. A dramatic
character is not copyrightable.
Holders of a Copyright
A copyright is initially owned by the author
or authors of the work, except in the case of a
“work for hire.” A work for hire can arise in two
situations: (1) where an employee creates a work
within the scope of his or her employment, in
which case the employer owns the copyright to
the work upon its creation; (2) where two parties
enter a written agreement designating the
creation as a work for hire and the work falls
within one of nine specific categories of work
designated by copyright law. If the work does
not fit one of the specified categories, it will not
be a work for hire even if the parties have called
it one. In such a case, the author or authors
retain the copyright, and transfer must be
accomplished through a written assignment of
copyright. Where there is a valid work for hire,
the employer who owns the copyright has the
same rights as any copyright holder, including
the right to initiate an action for copyright
infringement.
The ownership of a copyright, or the ownership
of any of the five exclusive rights afforded
by a copyright (discussed later in this article),
can be transferred to another and is regarded as
PERSONAL PROPERTY upon the death of the
copyright holder. Copyright ownership and
ownership of the material object in which the
copyrighted work is embodied are two entirely
separate legal entities. Furthermore, transfer of
an object and transfer of the copyright to that
object are separate, independent transactions,
neither of which, by itself, has any effect on the
other. Therefore, transfer of a material object,
such as an original manuscript, photograph
negative, or master tape recording, does not
transfer the copyright to that work. Likewise,
transfer of the copyright to a work does not
require transfer of the original copy of the work.
Exclusive Rights
Copyright affords an author a number of
exclusive rights: (1) the exclusive right to reproduce,
or copy, the work; (2) the exclusive right to
prepare new works that derive from the copyrighted
work; (3) the exclusive right to distribute
the work to the public by sale or other arrangement;
(4) the exclusive right to perform the
work publicly; and (5) the exclusive right to display
the work publicly. The first two rights,
involving reproduction and derivation, are
infringed whether violated in public or in private,
or whether violated for profit or not. The
last three rights are infringed only when violated
publicly, that is, before a “substantial number of
persons” outside of family and friends (17
U.S.C.A. § 101).
All of the exclusive rights afforded by copyright
may have significant economic value. For
example, derivative works, which may include translations, dramatizations, films, recordings,
and abridgments, can offer substantial rewards
to the author. An author may sell, license, or
transfer one or all of the exclusive rights.
Duration of Ownership
Under the original provisions of the Copyright
Act of 1976, copyright protection of an
authored work extended through the life of the
author and to fifty years after the author’s death.
However, in a major piece of legislation, Congress
extended copyright terms in 1998 in the
Sonny Bono Copyright Term Extension Act,
Pub. L. No. 105-298, 112 Stat. 2827 (17 U.S.C.A.
§§ 101 et seq.). Title I defines the terms of the
copyright extension, while Title II provides a
“music licensing exemption for food service or
drinking establishments.” This portion of the
law is also known as the Fairness in Music
Licensing Act of 1998.
The duration of copyright law under the
1998 act was extended for all copyrighted materials.
Works created on January 1, 1978, or after
are protected from the time the work was “fixed
in a tangible medium of expression.” The term is
for life of the creator plus 70 years. If the creator
is a corporation, then the term is 95 years from
publication or 120 years from the date of creation,
whichever is shorter.
Works published between 1923 and 1963 are
protected, if they were published with notice, for
28 years and can be renewed for 67 years. If not
renewed, they will fall into the public domain.
Materials that were published during this period
without notice entered the public domain upon
publication.
Items published between 1964 and 1977 are
protected if they were published with notice.
They are protected for 28 years, and the copyright
has been automatically extended for 67
years.Works created before January 1, 1978, but
not published, are protected for the life of the
creator plus 70 years or until December 31,
2002, whichever is later.Materials created before
January 1, 1978, but published between then
and December 31, 2002, are protected for the life
of the creator plus 70 years or until December
31, 2002, whichever is later.
Libraries, archives, museums, and scholars
expressed concerns about the 20-year extension.
Items created in 1923 would have passed into
the public domain on January 1, 1999, if the law
had not been changed.At the beginning of 2000,
works created in 1924 would have fallen under
the public domain. The act’s opponents argued
that original scholarly research would be hampered
by the extension.
In answer to those concerns, a special clause
was included in the Copyright Term Extension
Act for libraries, archives, and nonprofit educational
institutions. Such institutions are permitted
to “reproduce, distribute, display, or perform
in facsimile or digital form” a copy of any copyrighted,
published work during the last 20 years
of its term “for purposes of preservation, scholarship,
or research.”However, the work must not
be used in such a manner if it “can be obtained
at a reasonable price.”
The changes in the duration of copyrights
were made partly to keep pace with the evolution
of European copyright laws. In 1995,
Europe extended its copyright protection to life
of the creator plus 70 years, but in the United
States it remained the life of the creator plus 50
years.
Copyright Infringement
Copyright infringement involves any violation
of the exclusive rights of the copyright
owner. It may be unintentional or intentional.
When unintentional, it is called innocent
infringement. An example of innocent infringement
occurred when former Beatle George Harrison
created his song “My Sweet Lord.”
Harrison was found to have unconsciously
copied the tune of another song, “He’s So Fine,”
by the Chiffons, and thus was liable for infringement
(Bright Tunes Music Corp. v. Harrisongs
Music, 420 F. Supp. 177 [S.D.N.Y. 1976]). Vicarious
or related infringement refers to those who
profit indirectly from the infringement of copyright,
as in the case of a theater owner who profits
from booking a band that illegally performs
copyrighted works.
Since evidence of direct copying or PLAGIARISM
of an authored work is difficult to obtain,
infringement of copyright is usually established
through CIRCUMSTANTIAL EVIDENCE. Such evidence
typically must show a substantial similarity
between the original and the copy, as well as
prove that the copier had access to the original.
This means that where two works are similar or
identical, there is nevertheless no infringement
if each work was produced through the original
and independent work of its creator. An
infringer is not relieved of liability by crediting
the source or the creator of the infringed work.
Although infringement does not require that even a large portion of the work be similar, it
does require that a substantial part be similar. It
is irrelevant if the copied work is an improvement
of the original work.
The Copyright Act of 1976 recognizes a
copyright not only in a publisher’s collective
work, but also a separate copyright for each
author’s contribution to the work. With the
growth in the use of electronic databases and
disk to store data, some freelance authors began
to object to their articles being sold to companies
that produced these databases and disks.
The Supreme Court, in New York Times v. Tasini,
533 U.S. 483, 121 S. Ct. 2381, 150 L. Ed. 2d 500
(2001), held that the Act protects the copyrights
of the writers, rejecting an argument by the publishers
that the conversion of the original works
to an electronic format constituted a “revision”
of the collective work, which would have been
permissible under the Copyright Act.
Remedies for Infringement
Because the owner loses the value of a copyright
when infringement occurs, relief is often
sought through filing a lawsuit in federal court.
If infringement is established, the court can
grant preliminary and permanent injunctions,
or court orders that restrain the offending party
from continuing to infringe the copyright. A
court may also award monetary damages as a
remedy for copyright infringement. The copyright
owner can recover for actual financial
losses and any additional profits that the
infringer earned from the infringement.
The copyright owner may instead choose to
receive statutory damages, which range from a
minimum of $250 to a maximum of $10,000.
The court may adjust these limits based on the
innocence or willfulness of the infringer. Innocent
infringers may prove their GOOD FAITH and
may have damages reduced to as little as $100,
whereas willful infringers may be punished by
the court with damages as high as $50,000.
Courts may also impound and even destroy
illicit reproductions of copyrighted works.
Willful copyright infringement can be a federal
misdemeanor, punishable by as much as
$10,000 or one year’s imprisonment. Criminal
prosecutions on this basis require that infringement
be for the “purposes of commercial
advantage or private financial gain” (17 U.S.C.A.
§ 506(a)). Criminal prosecutions for copyright
infringement are generally rare. Nevertheless,
PIRACY of music and motion picture recordings
—in which criminals mass-produce such
recordings without permission and without
paying royalties—has become increasingly
common. This fact led to the passage of the
Piracy and Counterfeiting Amendments Act of
1982 (18 U.S.C.A. § 2318), which allows punishment
of up to $250,000 in fines or five years
in prison for pirating 1,000 phonorecords or 65
films within 180 days. The fraudulent use or
removal of copyright notices is also a punishable
offense.
Fair Use
Fair use is a judicial doctrine that refers to a
use of copyrighted material that does not
infringe or violate the exclusive rights of the
copyright holder. Fair use is an important and
well established limitation on the exclusive right
of copyright owners. Examples of fair use
include the making of braille copies or audio
recordings of books for use by blind people, and
the making of video recordings of broadcast television
programs or films by individuals for certain
private, noncommercial use.
Examples of fair use typically involve,
according to the Copyright Act of 1976, the
reproduction of authored works for the purpose
of “criticism, comment, news reporting,
teaching . . ., scholarship, or research” (17
U.S.C.A. § 107). The same act also establishes a
four-part test to determine fair use according to
the following factors: (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 (17 U.S.C.A. § 107).
It is usually considered fair use of an
authored work to take small quotations or
excerpts and to include them in another work, as
when quotations are taken from a book and
inserted into a book review. However, courts
have found that such quotation is not fair use
when material is taken from unpublished
sources, as happened in the 1985 case Harper &
Row v. Nation Enterprises, 471 U.S. 539, 105 S.
Ct. 2218, 85 L. Ed. 2d 588.
The Harper case involved publication by The
Nation magazine of quotations from Gerald R.
Ford’s unpublished memoir, A Time to Heal.
Harper & Row, publisher of the memoir, sued The Nation, claiming that the magazine’s actions
had caused it to lose a lucrative contract with
Time Magazine to publish excerpts from the
memoir. The Court ruled in favor of Harper, citing
the economic value of first publication to the
copyright holder as an important factor in its
decision. It found that The Nation had infringed
Ford’s copyright by becoming the first publisher
of his original expression, thereby inflicting economic
losses on Ford. It rejected The Nation’s
argument that it was simply reporting news.
Lower courts have subsequently applied the
Court’s reasoning to other cases involving quotations
from unpublished works. In Salinger v.
Random House, 811 F.2d 90 (2d Cir. 1987), a federal
appeals court blocked publication of a book
that used extensive quotations from unpublished
letters of the author J. D. Salinger. The
court ruled that the author retained copyright
ownership of the “expressive content” of the letters,
even when the letters themselves were
deposited in university library collections.
PARODY often constitutes fair use of copyrighted
material. In cases involving parodies of
copyrighted works, courts typically assess the
purpose and intent involved in taking material
from the original expression, and whether or not
the author of the parody has borrowed a reasonable
amount of material in producing the parody.
For example, in the 1994 case of Campbell v.
Acuff-Rose Music, 501 U.S. 569, 114 S. Ct. 1164,
127 L. Ed. 2d 500— which involved a parody by
the rap group 2 Live Crew of the Roy Orbison
song “Pretty Woman”—the U.S. Supreme Court
ruled that a parody could be fair use under
copyright law even if it is created for commercial
purposes.
Copyright Registration, Deposit,
and Notice
Registration of copyright involves recording
the existence of an authored work and the identity
of its author with the U.S. Copyright Office,
which is a part of the LIBRARY OF CONGRESS.
Deposit involves placing the work in its
recorded, physical form with the same office.
Notice, or notification, involves placing on an
authored work the © or the word Copyright or
the abbreviation Copr., along with the year of
first publication and the name of the owner of
the copyright.
Many of the major copyright acts in U.S. history
have required that works be registered and
deposited with a U.S. district court or with the
U.S. Copyright Office, in order to be legally
enforceable. Over time, however, deposit, registration,
and notice of copyright have increasingly
become formalities. Under the Copyright
Act of 1976, authors automatically receive federal
copyright protection when they fix their
work in a tangible medium. Even if a copyright
is not registered and an authored work is not
deposited, the author maintains exclusive rights
to the work.
Nevertheless, registration and deposit may
have significant legal consequences. Most
importantly, owners of copyright cannot sue for
copyright infringement until they have registered
the copyright (17 U.S.C.A. § § 411, 412).
Deposit is not a requirement for copyright protection,
but federal law requires that two copies
of a published work be deposited within three
months of publication. Failure to deposit a copy
after it has been demanded by the U.S. Copyright
Office is an offense punishable by a fine.
Registration of copyright requires the deposit of
at least one copy of a work and two copies of a
published work. The U.S. Copyright Office has
the power to vary these requirements.
Copyright notice serves a number of functions.
A lack of copyright notice has traditionally
informed users that a particular work is in
the public domain, whereas the presence of a
notice has warned users that a work is copyrighted
and identifies the date and year of the
work. Despite these traditions, copyright notice
is optional for works distributed after October
31, 1988. Under prior law, an omission of copyright
notice resulted in a loss of copyright protection.
Digital Millennium Copyright Act
Copyright laws have had to evolve in order
to protect the interests of owners of copyrights
from infringement through transfer of digital
copies of protected works. INTERNET users may
employ a myriad of methods to transmit digital
files, and much of the information contained in
these files consists of copyrighted works. Given
the sheer number of Internet users—estimated
by some at more than 500 million in 2002—and
trillions of pages on the World Wide Web, protection
of electronic publications and media is a
global concern.
In 1998, then-President WILLIAM JEFFERSON
CLINTON signed the Digital Millennium Copyright
Act (DMCA), Pub. L. No. 105-304, 112
Stat. 2860 (17 U.S.C.A. §§ 101 et seq.) into law following a 99-0 vote in the U.S. Senate. This
legislation was the focus of intense LOBBYING
efforts on the part of a wide range of interest
groups. These groups included TELECOMMUNICATIONS
companies and online service
providers; consumer-electronics manufacturers,
library, museum, and university groups; and the
publishing, recording, film, and software industries.
The primary goal of this legislation was to
adapt U.S. copyright laws for the digital age.
Passage of the DMCA was also required for
the United States to keep pace with changes in
international copyright treaties. In December
1996, the World Intellectual Property Organization
(WIPO), an agency of the UNITED
NATIONS, negotiated the Copyright Treaty and
the Performances and Phonograms Treaty at a
meeting in Geneva, Switzerland. WIPO is
responsible for the advancement and safeguarding
of intellectual property throughout the
world, and it has 170 member countries.
The treaties, ratified in 2002, provide
increased protection for copyrighted materials
in the digital world. By signing, each country
agrees to put into place laws, based on their own
legal system, in order to enforce the treaties. The
DMCA serves that purpose for the United
States.
The DMCA consists of five main sections:
WIPO Treaties Implementation, Online Copyright
Infringement Liability Limitation, Computer
Maintenance or Repair Copyright
Exemption, Miscellaneous Provisions, and Protection
of Certain Original Designs. Title I,
WIPO Treaties Implementation, contains an
“anti-circumvention” provision, making it illegal
to “manufacture, import, offer to the public,
provide, or otherwise traffic any technology,
product, service, device, component, or part
thereof,” for the primary purpose of “circumventing
a technological measure that effectively
controls access to” a copyrighted work. Thus,
technologies that are designed to protect digital
material are safeguarded.
Moreover, this provision makes the act of
circumventing a “technological measure that
effectively controls access to a work protected”
by copyright illegal. Every three years, the librarian
of Congress, the register of copyrights, and
the assistant secretary for communications and
information of the COMMERCE DEPARTMENT
must determine whether people with legitimate
noninfringing uses of copyrighted materials are
being unfavorably affected by the law. The law
does state that fair use is not affected, but this
nevertheless has been a controversial provision.
Libraries, museums, and scholars were concerned
about digital materials only being available
on a pay-per-use basis. An exemption was
included for nonprofit libraries, archives, and
educational institutions allowing them to circumvent
technical protection measures for the
purpose of determining whether or not to purchase
the copyrighted work.
Title I of the DMCA contains another addition
to U.S. copyright law required by the WIPO
treaties. This section prohibits the deletion or
alteration of information associated with copyrighted
material. Organizations will benefit
from this provision because it will help protect
information and images on their web sites.
Furthermore, it prohibits the distribution of
false copyright-management information. The
DMCA provides for civil and criminal enforcement.
However, archives, schools, nonprofit
libraries, and public broadcasting stations are
exempt from criminal prosecution.
The DCMA also limits the liability for copyright
infringement by providing safe harbors for
online service providers. The definition of an
online service provider is generous. Other
organizations may qualify for protection, which
could be useful if they provide Internet access,
have a company bulletin board or inhouse EMAIL
system, or chat rooms. Prior to the passage
of the DMCA, online service providers could
have been liable if infringing materials were
posted on their sites, even if they were unaware
of the problem. The DMCA explains the responsibilities
of copyright owners and service
providers. Under specific conditions, online
service providers are exempt from having to pay
monetary damages as long as they are not benefiting
financially from infringing activity and as
long as they remove the material promptly from
the Internet.
Limitations have also been set on exclusive
rights for computer programs. A provision
allows users to copy programs that are needed in
order to maintain and repair a machine. Any
such copies must be destroyed as soon as the
machine is repaired, however.
One significant exemption for libraries and
archives was included in Title IV of the DMCA.
Up to three copies may be made of a copyrighted
work without the permission of the
copyright owner for research use in other
libraries or archives through interlibrary loan. The word “facsimile” has been struck from the
former copyright law, thus allowing for digital
formats. Libraries and archives can now loan
digital copies of works to other libraries and
archives by electronic means. Copies for preservation
and security purposes are also permitted
when the existing format in which the material
is stored becomes outdated, or if the work is lost,
stolen, damaged, or deteriorating.
Title IV also established guidelines for licensing
and ROYALTIES in regard to copyrighted
music transmitted over the Internet and in other
digital forms. Transmissions are not subject to
licensing if transmitted with encoded copyright
information and with permission from the copyright
owner of the sound recording.
No Electronic Theft Act
The concerns surrounding the protection of
the copyrights of electronic data extend to computer
software. In 1997, Congress approved the
No Electronic Theft (NET) Act, Pub. L. No.
105-147, 111 Stat. 2678, which substantially
enhanced existing federal copyright law. Aimed
primarily at the rampant theft of computer software,
it allows the prosecution of anyone who
violates the copyright of materials worth more
than $1,000 in a six-month period by copying,
distributing, or receiving software.
Congress passed the law in November 1997
after the software and entertainment industries
strongly lobbied for it, claiming losses amounting
to $2 billion in 1996 in the United States
alone. In particular, the law closed a narrow
loophole in existing federal law, which made
criminal prosecution for copyright violation
only possible if the violation resulted in financial
gain. Under the NET Act, individuals face
fines and jail sentences even if they do not profit
financially from the violation. The law was
enacted over protests by scientists who feared
that it would hinder their research.
Lobbyists pointed to what became known as
the “LaMaccia loophole.” This term refers to an
unforeseen weakness in federal law that was
exposed by the failed federal prosecution of
computer hacker David LaMacchia in 1994
(United States v. LaMacchia, 871 F. Supp. 535 [D.
Mass. 1994]). LaMacchia, then a 21-year-old
student at the Massachusetts Institute of Technology,
had used an electronic bulletin board to
freely distribute countless commercial software
programs. Although he was indicted for wire
FRAUD under 18 U.S.C.A. § 1343 for allegedly
causing software companies losses of more than
$1 million, the case was dismissed. U.S. District
Court Judge Richard Stearns ruled that criminal
sanctions did not apply because LaMacchia had
not profited from his actions.
According to the software industry, the decision
paved the way for piracy of material through
web pages and other commonly used Internet
sites. Software manufacturers were not only concerned
about deliberate piracy by computer
hackers; they also wanted to stop the casual lending
and copying of computer software between
consumers and within offices as well. Joining
them in this effort were the music and film
industries, which have increasingly become partners
of software companies in the production of
multimedia CD-ROMs. Additionally, the music
industry viewed with alarm the widespread distribution
of commercial recordings by fans,
which became popular over the Internet in 1997
with the development of new software technology
for digitally copying songs.
The NET Act was designed to close the
LaMacchia loophole. Swiftly passed by the
House and subsequently approved by the Senate,
the act accomplished this by amending two
key parts of federal copyright law: Titles 17 and
18 of the United States Code. These laws previously
defined copyright violation strictly in
terms of financial gain. The NET Act broadened
them to include the reproduction or distribution
of one or more copies of copyrighted works
and considers financial gain simply to be the
possession of copyrighted work. It defines a misdemeanor
violation as occurring when the value
of the copied material exceeds $1,000 over a
180-day period; a felony occurs if the value
exceeds $2,500. Penalties range from a one-year
jail sentence and up to $100,000 in fines for firsttime
offenders, to five years’ imprisonment, and
up to $250,000 in fines for repeat offenders.

FURTHER READINGS
Electronic Frontier Foundation. 1995. To Have and to Hold:
Can Copyrights Extend to Cyberspace Without Increased
Costs and Threats to Privacy? (June 8).
Goldstein, Paul. 2003. Copyright’s Highway: From Gutenberg
to the Celestial Jukebox. Rev. ed. Stanford, Calif.: Stanford
Univ. Press.
Vaidhyanathan, Siva. 2001. Copyrights and Copywrongs: The
Rise of Intellectual Property and How It Threatens Creativity.
New York Univ. Press.

CROSS-REFERENCES
Copyright, International; Intellectual Property.

Copyright Law in Action: Basic Books v. Kinko’s Graphics Corp.

Copyright cases typically involve disputes
between competing private interests: an author
against someone who has copied the author’s work
without permission. However, the outcome of such
cases often has significant repercussions for the
general public as well. One such case with significant
public effect was Basic Books v. Kinko’s Graphics
Corp., 758 F. Supp. 1522 (S.D.N.Y. 1991), which
dealt with the question of whether photocopy stores
may sell copied excerpts of books to college students
without authorization from the books’ publishers. The
decision in the case ultimately affected the price that
the public must pay for access to copyrighted information.
Many college and university students purchase
photocopied materials from copy stores in association
with courses they are taking. Usually consisting
of chapters or sections taken from different books or
journals, these photocopied materials enable students
to read from a wide variety of sources without
having to purchase a large number of books. By the
late 1980s, book publishers realized they were losing
sales owing to such photocopying. As a result, several
publishers, including Basic Books, Inc., filed a
lawsuit in federal court against one of the largest
photocopy firms in the United States—Kinko’s Graphics
Corporation, a company that in 1989 had more
than two hundred locations and annual sales of $54
million.
At issue in the case was the question of who may
profit from the reproduction of an author’s work, particularly
with regard to the practice that Kinko’s
called anthologizing, which is the copying of book
excerpts into course “packets” sold to college students.
The publishers, the plaintiffs in the case, maintained
that Kinko’s violated the Copyright Act of 1976
(17 U.S.C.A. § 101 et seq.), by failing to secure permission
to reprint the excerpts included in course
packets and, in turn, pay the necessary fees involved,
part of which would be passed on to the authors of
the books. Kinko’s claimed that its sale of the
excerpts was an example of the kind of fair use that
is allowed by the Copyright Act.
Citing the commercial interests involved—
namely, the fact that Kinko’s made a significant
amount of money from the sale of course packets,
and that packet sales competed with book sales—
the court found that Kinko’s was guilty of copyright
infringement. It ordered the company to pay $500,000
in damages to the publishers and issued an order forbidding
it to prepare anthologies without securing
permission from and prepaying fees to the appropriate
publishers.
Basic Books was a victory for the publishers and
authors of books that are excerpted for course
anthologies. As for Kinko’s, it now has to pay fees to
publishers, but it is able to pass on those costs to
customers in the form of higher prices. Does this
mean that students are the losers in this case? In the
short run, yes, because they will pay more for their
course materials. But in the long run, students and
the rest of society may derive more benefit, even if it
is indirect, from a system that rewards authors for
their intellectual labor.