XX XXXXXX XXXXX XXXXX XX XX XX XX XX XX XX XX XXXX XX XXX XXXXXXX XX XX XX XX X XX XX XX XXXXXX XXXXXX XXXXX XX XX XXXXXX XXXXX XX XX XXXXXX XXXXXX XXXXXX XX XX XX XX XX XX XX XXXXX XXXX XX XXXX XXX XX XX XX XX XX XX XXXXX XX XX XXXXXX XXXXXX __________________________________ Spring 1994, Volume 2, Number 1 __________________________________ By George, Donaldson & Ford Attorneys at Law A Registered Limited Liability Partnership 1000 Norwood Tower 114 West Seventh Street Austin, Texas 78701 (512) 495-1400 (512) 499-0094 (FAX) gdf@well.sf.ca.us pkennedy@io.com ___________________________________ Copyright (c) 1994 George, Donaldson & Ford, L.L.P. (Permission is granted freely to redistribute this newsletter in its entirety electronically.) ___________________________________ David H. Donaldson, Jr., Editor Peter D. Kennedy, Associate Editor ___________________________________ IN THIS ISSUE: 1. BBS SYSOP LIABILITY FOR COPYRIGHT INFRINGEMENT: LET THE OPERATOR BEWARE! 2. STEVE JACKSON GAMES v. UNITED STATES SECRET SERVICE: GOVERNMENT DROPS ITS APPEAL; PLAINTIFFS PRESS FORWARD ON "INTERCEPTION" ISSUE 3. COPYRIGHT LAW: "FAIR USE" OF COPYRIGHTED MATERIALS BY SCHOOLS & NON-PROFIT ORGANIZATIONS 4. LAWYER ADVERTISING ON THE INTERNET??? 5. THE SOFTWARE PUBLISHERS ASSOCIATION -- COPYRIGHT WATCHDOGS ====================================================================== 1. BBS SYSOP LIABILITY FOR COPYRIGHT INFRINGEMENT: LET THE OPERATOR BEWARE! Two recent court decisions should remind electronic bulletin board ("BBS") system operators that, despite popular theories and arguments, current statutory and common law is being applied to BBSs without much attention to the unique nature of the communications technology. These legal actions are challenging the notion that BBSs can be unregulated virtual swap meets or unsupervised shopping malls, where the sysop can provide a place for the swapping of computer files and information, without tending to the content or pedigree of the files available on the board. 1. PLAYBOY ENTERPRISES, INC. v. FRENA. In December, 1993, a federal trial court in Florida decided an important copyright case involving a typical situation faced by many BBS sysops: the unauthorized uploading of copyrighted files by users. The case imposes a high standard of liability on sysops, and should be a reminder that sysops need to pay attention to *actual* court decisions, not just the latest legal theories bandied about the Net. George Frena is the sysop of a BBS in Florida called "Techs Warehouse." His BBS carries, among other things, adult material. At the time of the court decision, Frena provided free access to users who purchased products from him, and charged $25 a month to those who did not. Frena allowed subscribers to upload whatever they wanted onto his BBS, and uploads were apparently immediately available for downloading. According to the opinion, Techs Warehouse contained among its files 170 copyrighted PLAYBOY and PLAYGIRL pictures. Frena conceded that these pictures were on his BBS, and that he did not have authority from Playboy Enterprises, Inc. ("PEI"), to distribute the pictures. The pictures' file descriptions included the registered trademarks PLAYBOY and PLAYMATE. PEI's text had been removed from these pictures, and Frena's name, "Techs Warehouse BBS," and the BBS's phone number had been added. According to Frena, he did not post or alter the pictures; the files were all modified and uploaded by users. After PEI sued him, Frena removed the offending files and now monitors his BBS to assure that no more PLAYBOY pictures are uploaded. In a simple one-two analysis of "ownership" and "copying", the Court held that Frena violated PEI's copyrights. The Court first held that PEI owned the copyrights in the pictures, which was not disputed. The Court then decided that Frena had "copied" these pictures, despite his claim not to have posted the pictures on the BBS himself. The Court *inferred* that Frena had copied because (a) Frena had access to the original pictures, because *PLAYBOY* is a widely circulated magazine; (b) the computer file images were "substantially similar" to the copyrighted PLAYBOY pictures; and (c) the copyright owner's "public distribution" and "display" rights were infringed by having the image files available on the BBS. The two arguments a typical sysop might think persuasive in this situation were rejected. First, even if Frena himself did not copy the pictures, the Court said that was irrelevant. The mere presence of the images on his BBS was enough: There is no dispute that Defendant Frena supplied a product containing unauthorized copies of a copyrighted work. It does not matter that Defendant Frena claims he did not make the copies himself. Second, even if Frena did not *intend* to violate PEI's copyrights, the Court held this too was irrelevant: It does not matter that Defendant Frena may have been unaware of the copyright infringement. Intent to infringe is not needed to find copyright infringement. ... [E]ven an innocent infringer is liable for infringement ... . Innocent intent only matters when it comes to damages, not liability. Along with copyright infringement, the Court also held that Frena was liable for trademark infringement, because the offending files contained the PLAYBOY and PLAYMATE registered trademarks. Again, Frena's claim that he did not himself put these words on the images nor post the images was held to be irrelevant. As a final reproof, the Court held that the trademark infringement also made Frena liable for "unfair competition" against PEI. The Court left the question of damages for a later hearing. The procedural posture of the FRENA decision makes this an especially important precedent: the Court was required to believe Frena's claims, but found him liable anyway. The Court in FRENA has essentially put the burden on BBS sysops (at least those that charge money for access) of reviewing all files on their boards for possible copyright and trademark infringements. Regardless of the sysops' good faith or efforts to remove infringing files, the sysop will be liable for copyright trademark infringement for those files that escape detection. Several aspects of the FRENA decision are open to question and the opinion certainly will not be the last word, especially when a case is decided by a court more attuned to the technology involved. The FRENA court was certainly correct that a person need not intend to infringe, or know he is infringing, to be liable for copyright infringement. In that sense, it is a "strict liability" tort. When applied to computer files actually uploaded by the sysop, this principle is no less fair than when it is applied to non-electronic publishers like newspapers and magazines. However, one can wonder about the Court's unquestioning application of this principle to files uploaded by users. Are a BBS's file directories similar to paper publications, as the Court assumed without discussing the question, or are they more like a swap meet or shopping mall where the sysop provides the space, and the users provide the goods? Holding a sysop strictly liable for the legal pedigree of every file on the BBS significantly limits the core innovation of BBSs -- free two-directional file transfer. A newspaper publisher cannot claim not to know what is in the newspaper; the publisher makes the decision what to include and what to leave out. The sysop does not necessarily do this, or know what is on the BBS at any given time. Given the ability to upload and download files without the sysop's knowledge, is it proper to hold the sysop strictly liable for the presence of infringing files? If it is, is it also correct, as the FRENA court did, to automatically infer the additional element of copyright infringement -- "copying"? Is simply providing the *means* to swap copyrighted files enough to make a sysop liable for illegal "copying"? Should there be some requirement that the sysop at least *know* that copyrighted files are being posted and downloaded by users, and made no attempt, or only inadequate attempts, to prevent such activity before a Court finds that he copied the files? The Court in FRENA imposed liability regardless of the sysop's knowledge of what users were doing on his board. Would the Court have reached the same conclusion so easily if Frena had been the owner of a shopping mall leasing space to a tenant who was (without his knowledge) selling Metallica T-shirt rip-offs? The Court also appeared to misunderstand the nature of a BBS when it held that the availability of the image files violated the "display" right aspect of a copyright. The Court apparently believed the images were actually *displayed* to the user, a capability that is only offered by some large commercial BBSs, and is limited by the user's communication software. Of course, the "public distribution" aspect of a copyright can still be violated by the distribution of a computer file containing an image, and so this error has no meaningful effect on the decision. Finally, toward the end of its opinion, the Court seemed to lose track of Frena's claim that he did not upload the images, erase PEI's text, or add the BBSs' name and phone number himself -- a claim the Court legally had to accept at that stage in the proceedings. It is not clear whether Frena unequivocally stated that he did not know the PLAYBOY pictures were on his BBS before he was sued. However, the Court went a step further, stating that Frena himself deleted PEI's text from the PLAYBOY pictures, "add[ed] his own text" and "appropriat[ed] PEI's photographs without attribution," even though Frena denied having done so. The Court's assumption of disputed facts in PEI's favor, while questionable, might actually limit the impact of the opinion as precedent, because if Frena *had*, in fact, done those things himself there would be little question of his liability. These problems with the FRENA opinion demonstrate that the courts continue to struggle to understand computer communication technology. The natural tendency of the law is to make square pegs fit round holes until someone persuasively explains the difference. For example, judging from the Court's opinion, Frena's lawyers spent substantial energy making an obviously weak, losing defense that making copyrighted PLAYBOY pictures available for download on a commercial BBS was a "fair use" of those pictures exempt from copyright law. The effort would better have been spent explaining the unique nature of BBSs to the judge, and the unique problems facing sysops in patrolling for copyright infringement. PLAYBOY ENTERPRISES, INC. v. FRENA can be found at 22 Media Law Reporter 1301 (M.D. Fla. Dec. 9, 1993). 2. SEGA ENTERPRISES LTD. v. MAPHIA. A second case, decided by a federal trial court in California, relied on FRENA in finding that another sysop had violated federal copyright, trademark and unfair competition laws. The facts, as found by the Court after an evidentiary hearing, were far less sympathetic than those in FRENA. The users of a BBS called "Maphia" were uploading and downloading copies of copyrighted Sega computer video games. The directory descriptions of the game files identified them as Sega games. The Court specifically found that Maphia's sysop knew that the games were being copied, and that he actually solicited Sega games for uploading. Despite the sysops' denials, the Court also found that the Maphia BBS received both direct and indirect monetary benefits from the uploading and downloading of the game files -- through subscription fees, free download privileges, and an increased market for other goods or services sold by the sysop. Worse yet, the operators of the Maphia board were selling electronic devices designed and used to copy the ROM programs from Sega video game cartridges onto standard hard drives or floppy disks. Buying a such a copier from Maphia entitled the buyer to 10 megabytes of free downloads of Sega or SuperNintendo games. There was no evidence that the sysops of Maphia were themselves posting the Sega games, but the Court found that the sysops knew the games were there, knew they were being uploaded and downloaded, and encouraged and rewarded the process -- therefore making them liable as "contributory copyright" infringers, or "[o]ne who, with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another." Although the Court referred to the FRENA case for this rule, one wonders whether the FRENA case would have come out the same had the Court in that case applied the "contributory copyright" rule. It is important to note that both the FRENA and MAPHIA cases were brought by large private corporations, not law enforcement authorities. Such companies have the resources to conduct detailed investigations and hire powerful, competent lawyers. The power of the civil lawsuit is especially notable in MAPHIA, where Sega not only obtained an ex-parte preliminary injunction restraining the operation of the Maphia BBS, but also got an ex-parte seizure order -- essentially a civil search warrant. Without having to notify Maphia's sysops, let alone their lawyer (if they had one), and without having to get a law enforcement agency interested in their case, Sega got a court order authorizing the seizure and copying of the entire Maphia BBS. While the Maphia sysops raised a feeble challenge to the seizure order, it was rejected. The full scope of such civil seizure orders when applied to BBSs has not been explored, and if poorly drafted or executed they may raise questions under the Electronic Communications Privacy Act, the Privacy Protection Act of 1980, the Fourth Amendment or state law. However, no sysop should count on such after-the-fact remedies; just like criminal cases, if infringing material is found, courts will bend over backward to uphold the seizure. SEGA ENTERPRISES LTD. v. MAPHIA is available on Westlaw at 1994 WL 132215 (N.D. Cal. March 3, 1994). CONCLUSION The FRENA and MAPHIA decisions, while serious, do not mean sysops should play Russian Roulette and just not bother reviewing files at all, or close off BBSs to uploads. A sysops' good faith will go a long way in two very practical areas. First, a good faith, regular and documented effort to review and eliminate infringing files will make a BBS a far less attractive target for prosecution or a civil lawsuit, even if a copyrighted file unknowingly slips by. Second, the damages in a civil action are lower for the innocent infringer. The safest practice is to make uploads unavailable for downloading until the files have been individually reviewed for copyright and trademark violations. If this is impossible, new uploads should be screened regularly, offending files deleted, and records of the screening process kept. Even so, with the current state of the law, there is no guarantee that screening will prevent any liability, but it will surely reduce the risk. ______________________________________________________________________ 2. STEVE JACKSON GAMES v. UNITED STATES SECRET SERVICE: GOVERNMENT DROPS ITS APPEAL; PLAINTIFFS PRESS FORWARD ON "INTERCEPTION" ISSUE Earlier issues of LEGAL BYTES reported on the lawsuit brought by the Austin, Texas role-playing game publisher, Steve Jackson Games, against the U.S. Secret Service for violating the company's civil rights and the privacy rights of its electronic bulletin board system's users. Armed with bare suspicion and a search warrant based on largely inaccurate information, the Secret Service on March 1, 1990 raided the company's offices, seizing its BBS and two other computers, hundreds of floppies, drafts of a soon-to-be released game book, and volumes of other computer records and documents. No one was ever arrested or charged, but the Secret Service kept the BBS and other materials for almost four months. Three years later, the Secret Service found itself in federal court, not prosecuting anyone at Steve Jackson Games, but instead trying to defend its raid against a civil lawsuit brought by the company, its owner Steve Jackson, and three outside users of the company's BBS (represented by the lawfirm publishing this newsletter). After a three-day trial, Judge Sam Sparks held that the Secret Service's seizure of the draft game books and the BBS violated the Privacy Protection Act of 1980, and that its seizure, without probable cause, of the BBS e-mail violated a provision of the Electronic Communications Privacy Act of 1986, 18 U.S.C. Section 2703. The Secret Service was ordered to pay $1,000 to each of the users of the BBS, and over $50,000 to Steve Jackson Games to compensate for damaged equipment and lost sales. The government also agreed to reimburse over $250,000 in costs and attorneys' fees incurred by the company in bringing the lawsuit. The Secret Service initially gave notice of its intent to appeal the judgment, but by January, 1994, had changed its mind. The appeal was dismissed, and the government has now paid a total of over $300,000 to the Plaintiffs. This is the first and only known recovery of money from the federal government for violating the civil liberties and privacy of computer users. The Plaintiffs' victory was not complete, however. Judge Sparks rejected their argument that the Secret Service had violated yet *another* law when it seized the BBS -- the Wiretap Act, as amended by the Electronic Communications Privacy Act of 1986 (the "ECPA"). Congress expanded the Wiretap Act in 1986 to include protection for all types of electronic communications, including electronic mail and private bulletin board communications. The Wiretap Act prohibits interception of electronic communications without a court order, a greater burden than obtaining a simple search warrant from a federal or local magistrate or judge. When the Secret Service seized the Steve Jackson Games BBS, it contained undelivered electronic mail -- that is, mail written by a user and addressed to another user, but not yet read by the intended recipient. When the Secret Service seized the BBS, and then later read and deleted all the e-mail on that BBS, this mail lost its privacy, and was prevented from being delivered. The government argued that the seizure of mail in transit was not an "interception" under the Wiretap Act because the e-mail was temporarily stored on the hard drive of the computer. Judge Sparks agreed, although the Plaintiffs argued that walking off with mail in transit and preventing it from being delivered sure *seems* like an interception. Judge Sparks' decision has in effect added an additional requirement to the definition of interception -- that an "interception" must be *contemporaneous* to its transmission, and therefore the seizure of a storage device can never qualify as an interception. The word "contemporaneous" does not appear in the Wiretap Act and the Plaintiffs have argued that the legislative history of the Electronic Communications Privacy Act, as well as the language and logic of the act, indicates that seizures of BBSs that include undelivered e-mail are "interceptions" of such communications requiring court orders. The government has responded by arguing that the ECPA establishes two separate, airtight compartments -- one for "stored" electronic communications resident on hard drives, no matter how temporarily, and communications that are in-transit, that is, where the electrons are moving from computer to computer. Under the government's theory, BBS or Internet e-mail changes legal status, and therefore the level of protection, as it moves from computer to computer on its way to its destination. This issue remains important despite Judge Sparks' other ruling that the Secret Service's seizure of *all* the e-mail violated another provision of the Electronic Communications Privacy Act. At least some law enforcement agencies appear to be interpreting Judge Sparks' decision as a "go ahead and seize, but don't read or delete, and try to return promptly" rule; that is, that the law permits them to seize electronic mail without probable cause, as long as they do not read or delete it. Although this is not an accurate reading of Judge Sparks's ruling, a clear decision that the seizure of in-transit e-mail would unambiguously protect not just the *privacy* of e-mail, but would protect the *delivery* of the mail as well. Other methods, including subpoenas and making on-site duplicates, can preserve the government's need for information when legitimate and supported by probable cause. Further, the ruling exhibits a static application of the statute to technology, not intended by Congress when the ECPA was enacted. The Plaintiffs have pressed forward with their appeal in order to establish better protection for electronic communication privacy. The government and law must come to grips with the proliferation of privately owned and operated communications systems. While single-line dial-up BBSs are now relatively primitive, there are countless thousands of them. The large commercial services such as CompuServe and America Online are growing at fantastic rates; Steve Jackson Games' own BBS has become a commercial Internet machine with a T-1 line and over a dozen dial-up connections, providing ftp, telnet, newsgroup and e-mail services. It is not unreasonable to ask the government to give new means of communications the same respect as it has long granted telephone calls. With the much-vaunted information superhighway coming, the government will face these problems anyway. Private communications increasingly will travel over privately owned, small, decentralized service providers, and the government cannot continue to argue that the difference in technology (or size) warrants lower protection under the law. ______________________________________________________________________ 3. COPYRIGHT LAW: "FAIR USE" OF COPYRIGHTED MATERIALS BY SCHOOLS & NON-PROFIT ORGANIZATIONS Organizations with worthy goals designed to advance knowledge need resources for education or research. Unfortunately, often these institutions lack enough money to do all they would like to do. The core of almost all modern educational materials is copyrighted works -- books, periodicals, videotapes, audiotapes, computer programs and the like. Modern equipment makes duplicating these works easy and cheap -- cheaper than buying multiple copies. Schools and other underfunded non-profit organizations face great temptation to use the copy machine or blank floppy disks instead of the purchasing department to fill out the institution's needs. While the copyright laws do give some slack to schools and nonprofit organizations, it is not so generous that these institutions simply can ignore the requirements of the federal copyright laws. The Copyright Act gives the owner of the copyright the exclusive right to control the reproduction of the work, including the format of reproduction, as well as the number of reproductions that legally can be made. This strict control over copying has always been the foundation of American copyright law. In some areas, however, it has given way as the law came to recognize that sometimes limited reproduction of copyrighted works has greater social value than the copyright owner's absolute control over copying -- notably, in the advancement of arts, science, in news reporting, criticism, and other endeavors of educational or social usefulness. Judges, applying the copyright laws, created a "fair use" exception permitting some unlicensed copying under a very limited set of circumstances. At first part of the common law of judicial decisions, Congress eventually added the "fair use" doctrine to the statute books in 1976, effective as of 1978, when it made a major revision of the Copyright Act. The Copyright Act states that a "fair use" of a copyrighted work "for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research" does not violate the copyright. To determine whether a specific use is fair, a court considers these 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; (4) the effect of the use upon the potential market for or value of the copyrighted work. 17 U.S.C. Section 107. The application of these general principles depends, of course, on the facts of any specific use. Three court cases provide good illustrations of the scope and limits of the "fair use" exception when an "educational" purpose is claimed. 1. The National Library of Medicine case. The National Library of Medicine is run by a federal agency, the National Institute of Health. The majority of the library's collection consisted on medical periodicals. The library would by two copies of each periodical, but these two copies could not meed the library's demand. In 1970, the library had a photocopy department had a $86,000 budget, and made some 93,000 copies of journal articles, upon request by researchers. The National Institute of Health was sued by the publisher of 37 medical journals, claiming that the library's photocopying practice infringed its copyright in the journals. The court, in a long discussion of the particulars of the library's use, held that it was a "fair use." Congress later amended the Copyright Act to specifically include a "safe harbor" from copyright violations for libraries. The exception is rather lengthy, but its most important provision permits libraries to reproduce or distribute single copies of copyrighted works, so long as (1) the reproduction is not made for direct or indirect commercial advantage; (2) the library is either open to the public, or open to all researchers in a specialized field; and (3) the reproduction or distribution includes a notice of copyright. 17 U.S.C.  108. The provision also protects library staffers from copyright infringement claims provided the library posts notices at copying machines. The opinion can be found at WILLIAMS & WILKINS COMPANY v. UNITED STATES, 487 F.2d 1345 (Ct. Clm. 1973), aff'd by equally divided court, 420 U.S. 376 (1975). 2. ENCYCLOPEDIA BRITANNICA EDUCATIONAL CORP. v. CROOKS. In western New York state, a non-profit organization called "BOCES" was sued by three corporations for copyright infringement. BOCES was a non-profit cooperative, providing educational services and specialized instruction to 19 member school districts and 100 schools. BOCES provided a videotape library, duplication program, and film print library which circulated videotapes and motion pictures among the member schools. BOCES was in the practice of videotaping educational programs from on-the-air broadcasts and including them in their library of materials available to the member school districts. The educational film producers sued, claiming that BOCES's large-scale reproduction of their copyrighted works was not "fair use." After a trial, the court found that the balance of the factors listed above went against BOCES. The most important factor was that if BOCES's use were permitted, it would destroy the film producer's market, because they sell *educational* films; if "fair use" included multiple copying of on-the-air broadcasts, these companies would have no remaining market for their films. Although the educational use made of the films by BOCES cut in favor of fair use, the large-scale operation was found to be not a reasonable use of copyrighted materials. The court recognized that "time-shifting" use of videotaping was permissible, but that BOCES's use went far beyond simply taping a broadcast at one time to be viewed at a later time. The opinion can be found at 542 F. Supp. 1156 (W.D.N.Y. 1982). 3. AMERICAN GEOPHYSICAL UNION v. TEXACO INC. The third example is a recent case where photocopying by a private corporation's research and development department, although similar to a public library's, did not qualify for the "fair use" exception. Texaco employs between 400 and 500 scientists and engineers in six research centers in the United States. Texaco maintains large research libraries that subscribe to numerous scientific journals. Like the National Library of Medicine, Texaco's libraries made copies available to their scientists for their personal use. Texaco, too, was sued by the publishers of these journals, but *lost*. What was the difference? As might be expected, the ultimate difference was the *commercial* nature of Texaco's research. Despite being involved in basic R & D, and despite the fact that its scientists interacted with the greater scientific community, the bottom line was that Texaco is a profit-oriented, private corporation. (This also made the "library" exception discussed above unavailable.) The publisher showed that there were "convenient and reasonably priced" alternatives to in-house copying, including ordering copies directly from the publisher or from licensed copying services, or by negotiating blanket license agreements directly from the publishers that permit blanket photocopying. Texaco was required to find another way to provide copies of journal articles to its scientists. The opinion can be found at 802 F. Supp. 1 (S.D.N.Y. 1992). 4. Computer software. One of the newest areas where copyright law affects educational institutions and nonprofit organizations lies in the use of computers and, particularly, computer software. The high cost of commercial software, and the ease with which software can be duplicated, makes it awfully tempting to buy just one licensed copy and then make multiple unlicensed copies. This can constitute copyright infringement just as clearly as making a photocopy of a book or videotaping an educational film. Most computer software licenses allows for an *archival* or "backup" copy, but the right to make additional copies for multiple users requires a specific license to do so -- usually obtained through additional negotiations with the seller. Not getting sufficient licensed copies can have serious consequences, including an unpleasant visit from lawyers representing the Software Publishers Association. (See "The Software Publishers Association: Copyright Watchdogs" in this issue.) The author knows of no case approving as "fair use" an institution's unauthorized duplication of copyrighted software, even if intended to make more copies of the software available for "educational" use. The copyright law, first by reason of judge-made law and later by statute, does tolerate and encourage legitimate and isolated uses of copied material for educational purposes. In most instances simple use of common sense will assure that the educator or researcher is operating within the boundaries of fair use. A good rule of thumb is, "If I depended upon this work to feed my family and pay my taxes, would I feel like I ought to be paid for the use that I propose to make of this work?" If the answer to that question is "Yes," then you may question whether your use is fair. While the copyright law does recognize and gives some credit to nobility of purpose, its tolerance is limited. _____________________________________________________________________ 4. LAWYER ADVERTISING ON THE INTERNET??? In April, 1994, the NEN YORK TIMES ran a story about a lawyer in Phoenix, Arizona, who posted an advertisement for his legal services on Usenet, part of the Internet. According to the TIMES, the lawyer, Lawrence A. Canter, advertised his firm's availability to represent immigrant clients who might be eligible to be entered in the Immigration and Naturalization Services 1994 "Green Card Lottery." He did not limit his posting to legal or immigrant newsgroups, but instead flooded practically all the active Usenet groups that could be reached by United States providers -- some 9,000 newsgroups. His advertisement resulted in the expected deluge of negative responses accusing him of "commercializing" the Internet, a grave breach of "Netiquette." Canter had received an estimated 30,000 reply messages before Canter's Internet access provider cut off his service. The service provider was quoted as "losing a week" of time dealing with the problems caused by the commercial posting. According to the article, Canter remains completely unrepentant, and in fact threatened to sue his Internet provider for cutting off his access. Inevitably, as access to the Internet becomes easier, its commercial advantages are being realized -- by people with and without manners. Internet service providers themselves are taking economic advantage of the explosion of interest in the Internet. There is broad agreement, especially among long-time users, that flagrant commercial advertising is simply not acceptable practice on the Internet. What's an Internet service provider to do if it wants to prevent its users from advertising? A provider who gets the reputation of letting commercial advertising originate from its connection may become a Net anathema. A flood of flaming responses to a commercial advertisement can take down a machine. Does a provider *have* to let its users post commercial advertisements? Is this a legal or a social issue? Canter unquestionably has a First Amendment right to truthfully advertise his services as a lawyer, without undue interference or regulation by the government, as do other professionals. (In fact, this law firm recently defended Texas lawyers' rights to advertise without fear of criminal prosecution.) However, Canter has no constitutional right to post such advertisements using his access to a *private* Internet service provider; with very rare exceptions, the Constitution does not apply to private individuals or companies. With the risk of being criticized for supporting "censorship," there is no law preventing a commercial Internet provider from setting terms for the content of its user's posting. (The answer is not so simple as to the university or government provider, though.) For the private service provider, the problem can be handled by contract. The big commercial services such as Prodigy and CompuServe put contractual limitations on the content of their subscribers' postings. As part of the conditions of service, the provider can require that the user not use the service to post or transmit commercial advertisements or solicitations. The contract can state that the sanction for not following this requirement is cancellation of the agreement to provide access (with the refund of prorated pre-paid subscription funds, of course). Users who want to post commercial advertisements simply have to go elsewhere. If a user nonetheless posts a commercial advertisement, the provider can cancel the service. How does the provider define "commercial advertisement"? Anyway the provider wants to. For clarity, it should be defined in the contract, with the provider reserving the sole right to interpret the definition and apply it to a user's message. Relevant factors to keep in mind are (1) whether the posting is advertising his or her own services or goods, or recommending that of others; (2) whether the posting directly relates to the sale of goods or services, or is a general description of such goods or services; (3) whether the posting seeks a direct, commercial, response -- the purchase of something. The provider should retain the right to decide what is and is not a "commercial advertisement" under the contract. As well as limiting the content of postings, the provider could also allow for limited posting of commercial messages in places where they are generally tolerated. Another safeguard would be to include a "force majeure" clause, which permits the cancellation of the contract in the event that a posting (like Mr. Canter's) generates such a vociferous response that it affects the provider's ability to run its system, or has a notably detrimental affect on the system's reputation. Keep in mind that we are discussing *public* postings on newsgroups such as Canter's. While the private provider probably has the right to set terms on the content of private messages passing through its gateway, it is beyond the scope of this article to discuss the ramifications of enforcing such a restriction. What about *this* newsletter, you say? Is it a commercial advertisement by lawyers? We post this letter in selected areas of the Net, and of course we hope to impress our readers with our knowledge of the law, and yes, we'd be quite pleased if paying business someday somehow results from it. But we're not offering to represent people in specific matters, or even matters in general. According to the NEW YORK TIMES account, Canter's posting was easily recognized as a solicitation of specific business -- a specific offer to represent persons in an identified legal matter. (Not to agree that applying for the green card lottery takes a lawyer's help.) Inevitably, more and more ads will be coming to the Internet; that's the nature of an open system without central regulation. Private commercial access providers, however, do have the option through contract of preventing *their* system from being the doorway for unwelcome sales pitches. ______________________________________________________________________ 5. THE SOFTWARE PUBLISHERS ASSOCIATION -- COPYRIGHT WATCHDOGS The Software Publishers Association ("SPA") is a non-profit organization of over 1,000 large and small software companies. The SPA looks out for the interest of copyright holders, specifically, computer software copyright holders. Born in response to unchecked proliferation of pirated software, the SPA has been aggressive in working to increase the protection for software copyrights and the penalties for illegal copying. The SPA is also actively involved in investigating suspected copyright violation, in helping law enforcement agencies investigate suspected criminal copyright violations, and in some cases, sponsoring civil actions against suspected software pirates. The SPA aided the FBI in the highly-publicized investigation and seizure of the "Rusty n Edie's" bulletin board in Youngstown, Ohio in January of 1993 for suspected copyright law violations. (No charges have been brought, and the FBI claims it is continuing its investigation). The SPA has also sponsored civil lawsuits similar to those brought by Sega and Playboy Enterprises discussed in this issue. The association's goal is to protect the commercial value of its member's software, which can vastly depleted by unauthorized copying and distribution. The SPA not only patrols BBSs, but takes information, sometimes from disgruntled ex-employees, about companies that cut corners by making unlicensed copies of software. These lawsuits are carefully researched and prepared by lawyers and experts quite familiar with computers and communications technology, making the SPA often a more formidable enforcer than law enforcement agencies. The cases are usually quickly settled out of court, or even before a case is brought. The SPA also provides public information on the copyright laws and assistance to companies and institutions interested in making sure they are complying with the copyright laws. They operate a "Piracy Hotline" for reports of illegal software copying, and provide information, including a video, on how to make your company "software legal." A "greetings" letter from the SPA, like a draft board, is to be feared and avoided; the best way, of course, is to keep one's nose clean by not making or tolerating unauthorized copying of software. ===================================================================== ABOUT THIS NEWSLETTER LEGAL BYTES is a service to our clients and friends. These articles are intended to be summaries and brief discussions of emerging legal issues in the field of computer law. They are not intended to be exhaustive discussions of the topics. Because of their nature, they should not be relied upon as legal advice or used as a basis for reaching a conclusion. If you have ideas or topics you would like to see discussed in LEGAL BYTES, drop us a line. ABOUT GEORGE, DONALDSON & FORD, L.L.P. George, Donaldson & Ford, L.L.P., is a registered limited liability partnership specializing in litigation and in counseling clients in a broad range of practice areas, including computer law, copyright, trademark, trade secrets, business, libel, invasion of privacy, and constitutional law. Attorneys at George, Donaldson & Ford, L.L.P., are not board certified in any specialty. No designation has been made by the Texas Board of Legal Specialization for a Certificate of Special Competence in the area of computer law. =====================================================================