COMPUTER, INTERNET, AND TECHNOLOGY LAW

US PUBLISHER SUBJECT TO AUSTRIALIAN LAW BASED ON ARTICLE POSTED ON US WEBSITE

The High Court of Australia has ruled that US-based publisher Dow Jones & Co. could be sued for defamation in Australia under Australian law with respect to an article published on its Internet Web site.  In the case, Joseph Gutnick, an Australian mining magnate, sued Dow Jones over an article that appeared in an Internet version of Barron’s magazine.  The High Court concluded that, because the article was downloaded in Australia, it’s publisher is subject to Australian law, which has strict libel laws.  The case has been warily regarded as setting a dangerous precedent that could subject US publishers and content providers to jurisdiction in countries with less extensive free speech protections than those available in this country.    Articles discussing the case can be found on web sites maintained by PBS,  http://www.pbs.org/newshour/media/media_watch/july-dec02/australia_12-10.html, and the Australian Broadcasting Corporation, http://www.abc.net.au/pm/s744705.htm.  The opinion of the High Court is available at http://www.austlii.edu.au/au/cases/cth/high_ct/2002/56.html.  

JURY ACQUITS RUSSIAN SOFTWARE MAKER OF DMCA VIOLATIONS

A federal jury in San Jose, California has found the Russian-based software maker ElcomSoft Co., Ltd. not guilty of violating the Digital Millennium Copyright Act (“DMCA”).  The DMCA prohibits the willful circumvention of methods included within electronic products (such as digital music and books) to prevent unauthorized copying.  In one of the first, if not the first, trials of its kind, the federal government prosecuted the Russian software company for distributing a $99 program that circumvented copy protections used in E-Books created with Adobe Systems software and allowed users to make copies of the electronic books.  Apparently, the case turned on whether any violations of the DMCA were “willful;”  Russia has no laws prohibiting the selling of such decryption tools.  In an interview, jury foreman Dennis Strader said that the jurors agreed that ElcomSoft's product was illegal, but they acquitted the company because they believed the company didn't mean to violate the law.  He said, "We didn't understand why a million-dollar company would put on their Web page an illegal thing that would (ruin) their whole business if they were caught."  Strader added that the panel found the DMCA itself confusing, making it easy for jurors to believe that executives from Russia might not fully understand it. See http://news.com.com/2100-1023-978176.html.  The case has been hailed by free speech groups and organizations such as the Electronic Frontier Foundation.  Articles about the case (pro and con) can be found at http://www.worldtechtribune.com/worldtechtribune/asparticles/buzz/bz12182002.asp, http://www.eff.org/IP/DMCA/US_v_Elcomsoft/20021217_eff_pr.html, http://www.eff.org/IP/DMCA/US_v_Elcomsoft/20010730_lessig_oped.html, http://www.itsecurity.com/tecsnews/dec2002/dec136.htm.

SUPREME COURT UPHOLDS APPLICATION OF COPYRIGHT EXTENSION ACT TO EXISTING WORKS

In 1998, Congress passed the Sonny Bono Copyright Term Extension Act (“CTEA”), which, by amending 17 U.S.C. §§  302, 304, enlarged the duration of copyrights by 20 years.  Prior to the CETA, the duration of a copyright was the life of the author plus 50 years.  The CETA extended the term to the life of the author plus 70 years. 

The duration of copyrights has been incrementally increased over the centuries.  The right of Congress to grant copyrights in the first place is provided in the Constitution, but the Constitution does not prescribe a specific time for the life of the copyright, only that Congress can authorize the issuance of copyrights for “limited Times.”  The Copyright and Patent Clause of the Constitution, Art. I, §  8, cl. 8, provides as to copyrights:  “Congress shall have Power ... [t]o promote the Progress of Science ... by securing [to Authors] for limited Times ... the exclusive Right to their ... Writings.”  The Nation’s first copyright statute, enacted in 1790, provided a federal copyright term of only 14 years from the date of publication, renewable for an additional 14 years if the author survived the first term.  That duration has been significantly expanded over time.  The CTEA installed the fourth major duration extension of federal copyrights.  The new duration was intended to harmonize US copyright law with the term adopted by the European Union in 1993.   See Council Directive 93/98/EEC of 29 October 1993 Harmonizing the Term of Protection of Copyright and Certain Related Rights, 1993 Official J. Eur. Cmty. 290 (EU Council Directive 93/98).  

            The growing duration of copyrights has prompted criticism from numerous groups.  In Eldred v. Ashcroft, the Petitioners challenged the application of the CETA to published works with existing copyrights.  The Petitioners were individuals and businesses whose products or services build on copyrighted works that have gone into the public domain.   They sought a determination that the CTEA fails constitutional review under both the Copyright Clause's “limited Times” prescription and the First Amendment's free speech guarantee, at least as applied to works that originated under the prior copyright law.  In other words, the Petitioners argued that the new, life-plus-70-years duration should only be applied to new works, not works that existed before CETA became law. 

            The Supreme Court disagreed.  First, the Court was satisfied that the CTEA complies with the “limited Times” prescription in the Constitution.  Second, the Court concluded that the extension of the copyright term was a rational exercise of the legislative authority conferred by the Copyright Clause.   In doing so, the Court deferred substantially to Congress, holding that Congress’s decision to harmonize US law with European law was rational.  The Court remarked, “CTEA reflects judgments of a kind Congress typically makes, judgments we cannot dismiss as outside the Legislature's domain.”    

            The decision affects many digital works protected by copyright law, including computer software programs, music, and videos. 

Eldred v. Ashcroft, 123 S. Ct. 769, 71 USLW 4052, 2003 Copr.L.Dec. P 28,537, 65 U.S.P.Q.2d 1225, 3 Cal. Daily Op. Serv. 426, 2003 Daily Journal D.A.R. 512, 16 Fla. L. Weekly Fed. S 44 (Jan. 15, 2003)

IS A DOMAIN NAME PROPERTY?

            A recent opinion by the United States Court of Appeals for the Fourth Circuit has kept alive the debate over whether a domain name constitutes property. 

            In 2000, in the case of Network Solutions, Inc. v. Umbro International, Inc., 259 Va. 759, 529 S.E.2d 80 (2000), the Supreme Court of Virginia held that a domain name cannot be garnished because it amounts to a contract right that is inextricably bound to, and that does not exist separate and apart from, the services provided by the domain name registrar, in that case NSI.  Since a contract for services is not a “liability” under Virginia’s garnishment statute, the Court concluded that a domain name is not a form of property that can be garnished.  Notably, the Court stated that its ruling was limited to the narrow language of Virginia’s garnishment laws, and it noted that NSI itself had acknowledged that the right to use a domain name is a form of intangible personal property.  Nevertheless, the Umbro case has been viewed as authority for the proposition that a domain name is not property.

            Recently, however, the U.S. Fourth Circuit ruled that a domain name is a res, that is, a thing, or property, at least under the Anticybersquatting Consumer Protection Act (15 U.S.C. 1125(d)).  In Porsche Cars North America, Inc. v. Porsche.net, 302 F.3d 248 (4^th Cir. 2002), the Court considered the exercise of in rem jurisdiction (that is, jurisdiction over the thing that is the subject of the action, as opposed to jurisdiction over the person that owns the thing), which is permitted under the ACPA.  One of the defendants in that case argued that domain names are not property – only an address.  The Court rejected that argument, holding that “Congress plainly treated domain names as property under the ACPA.” 

            These cases are narrowly limited to the facts and statutes that they involved.  The controversy over whether a domain name constitutes property is likely to continue for some time. 

A WEBSITE IS NOT A PHYSICAL PLACE OF PUBLIC ACCOMMODATION

SUBJECT TO THE AMERICANS WITH DISABILITIES ACT

            In a recent ruling, the U.S. District Court for Southern District of Florida has held that the Americans with Disabilities Act (ADA) does not apply to the “virtual ticket counter” Internet website maintained by Southwest Airlines.  In the case, a blind individual and a non-profit advocacy group sued Southwest because its website, southwest.com, was not accessible to the blind.  Various screen readers and similar technologies that are available to “read” websites to the blind were not able to convert the graphics and other materials on the site into speech or otherwise allow the blind to purchase tickets via the website.  The plaintiffs contended that, accordingly, the website was in violation of the ADA.

            In dismissing the complaint, the Court examined whether the southwest.com site is a place of “public accommodation” governed by the ADA.  The Court noted that the ADA, by its terms, applies to places such as hotels, restaurants, movie theatres, stores, schools, etc., which have a physical, concrete structure.  The Court concluded that the website has no such physical structure and that it does not have any nexus to a physical structure.  The Court concluded that “the Internet website at issue here is neither a physical, public accommodation itself as defined by the ADA, nor a means to accessing a concrete space . . ..”  The Court further held that, “because the Internet website, southwest.com, does not exist in any particular geographical location, Plaintiffs are unable to demonstrate that Southwest's website impedes their access to a specific, physical, concrete space such as a particular airline ticket counter or travel agency.”

Access Now, Inc. v. Southwest Airlines, Inc., ___ F. Supp. 2d ___, 2002 WL 31360397,   No. 02-21734-CIV, October 18, 2002 (S.D. Fla. 2002).

ICANN ISSUES WARNING REGARDING DOMAIN NAME DISPUTE SCAM

On April 8, 2002, ICANN (the Internet Corporation for Assigned Names and Numbers, (www.icann.org) issued an Advisory stating that it has received many reports of domain-name registrants receiving "Domain Dispute Notification" mailings from an entity identifying itself as "XChange Dispute Resolution." The mailings state that XChange is an "ICANN authorized arbitrator" and that the registrant must mail in a "security deposit fee" to defend "ownership of the domain name."   According to ICANN, these statements are false and are designed to trick recipients into providing a security deposit, which appears to range from $250 to $1250, which is allegedly required from the registrant in order to "ensure a genuine belief of ownership ...". The mailing instructs registrants to send a check for the security deposit, made payable to "XChange Reciprocal Services" at 490 Fallon Road, Petaluma, CA 94952-9655. The notices all appear to be signed by "Janice Veneno, Dispute Resolution Service Representative, XChange Dispute Resolution (an ICANN authorized arbitrator)."   ICANN advises recipients of such communications not to send any money and to contact an appropriate governmental law enforcement/consumer protection agency to report the incident. Recipients are also invited to fax the notice to ICANN at +1 310 823-8649, and ICANN may pass it on to an appropriate law-enforcement agency.  The ICANN Advisory appears at http://www.icann.org/announcements/advisory-08apr02.htm

SECOND CIRCUIT COPYRIGHT RULING FOCUSES ON PROCESS OF CREATION OF SOFTWARE IN EXAMINING AUTHORSHIP

A ruling issued on May 7, 2002, by the United States Court of Appeals for the Second Circuit contains lessons for determining who is the author of a software program created by multiple individuals.  Josef Gold created two programs that allowed doctors to produce insurance claim forms and bills.  Gold worked for MedPlus, Inc.  Igor Modlin later improved the programs, adding several modules that contained new features.  Modlin was not initially paid by MedPlus, but was later put on the payroll.  Modlin eventually left MedPlus, formed his own company, called Medforms, Inc., and, after assigning his rights in the programs to Medforms, filed copyright registrations for the programs.  Medforms then sued the successor in interest to MedPlus for copyright infringement arising out of is marketing of the programs. 

At trial, Modlin claimed that he created the improved versions of the programs (including the new modules) with almost no input from Gold.  Gold, however, testified that he conceived of the new versions, that he supervised Modlin closely, and that he provided Modlin with specific instructions as to how to create the source code.  The jury found that Modlin was not the sole author of the programs.  The Second Circuit concluded that sufficient evidence existed to support the jury’s finding, and it held that Modlin could not prove that he or his company owned the copyrights to the programs.  In so ruling, the Court made several statements that suggest that a careful review of the steps involved in the creation of a software program is necessary to determine authorship and, hence, ownership, when multiple people are involved. 

Authorship is generally a question of fact for the jury.   In this case, the jury heard conflicting evidence about whether the copyrighted works were source codes or entire programs, whether Modlin's involvement in the creation of the source codes was supervised or independent, and whether Gold contributed to the creation and revision of the source codes.  The Court held that the jury was free to credit the evidence presented by Gold and MedPlus and that a reasonable juror could conclude that Modlin was not the only author of the copyrighted works. 

With respect to determining authorship, the Court noted that the 1976 Copyright Act does not explicitly define what it means to be an “author” for copyright purposes.  The Act provides that a copyrightable work must be “original” and “fixed” in a “tangible medium of expression.”  Accordingly, the Court held, “[a]s a general rule, the author is . . . the person who translates an idea into a fixed, tangible expression.”  This would appear to apply to the one who creates the source code.  The Court noted, however, that a person who merely fixes another’s ideas or expression through “rote or mechanical transcription” is not an author for copyright purposes. 

The Court concluded that the limits on copyright make it clear that BOTH   tangibility and originality are necessary aspects of authorship.   “A person is not an author if he has an original idea that is not expressed in tangible form, and a person is not an author if he expresses another’s idea in tangible form without any original contribution.”

In practice, this means that one attempting to determine authorship of a program under circumstances similar to those in this case must look carefully at all of the factors involved in the creation of the program, including who conceived of the original idea, how it was fixed into tangible form (that is, coded), and the degree to which the person doing the coding was supervised.

The Second Circuit’s opinion appears in Medforms, Inc. v. Healthcare Management Solutions, Inc., 290 F.3d 98 (2d Cir. 2002). 

U.S. SUPREME COURT STRIKES DOWN PORTIONS OF CHILD PORNOGRAPHY PREVENTION ACT AIMED AT “VIRTUAL PORN” AS VIOLATIVE OF FREE SPEECH

In a ruling issued on April 16, 2002, the U.S. Supreme Court struck down portions of the Child Pornography Prevention Act of 1996 (CPPA),18 U.S.C. §§2251, et seq., on the grounds that those portions violate free speech and essentially create a “thought crime.”  The CPPA is aimed at, among other things, curbing the distribution of child pornography, especially via the Internet.  Sections 2256(8)(B) and (8)(D) of the statute are aimed at “virtual porn,” images that can be created with advanced computer image editing programs to create virtual images but that do not involve real children.  The Sections extend the federal prohibition against child pornography to sexually explicit images that appear to depict minors but that were produced without using any real children.  According to the Court, “these images do not involve, let alone harm, any children in the production process;  but Congress decided the materials threaten children in other, less direct, ways.   For example, pedophiles might use the materials to encourage children to participate in sexual activity.” 

The Court concluded that the reach of the statute was overly broad in that “it proscribes the visual depiction of an idea-- that of teenagers engaging in sexual activity--that is a fact of modern society and has been a theme in art and literature throughout the ages.”  Thus the statute would include obviously protected works that appear to involve minors involved in sexual activity, such as Romeo and Juliet and recent movies such as Traffic and American Beauty.  The Court reasoned that “the CPPA prohibits speech that records no crime and creates no victims by its production.   Virtual child pornography is not ‘intrinsically related’ to the sexual abuse of children . . ..    While the Government asserts that the images can lead to actual instances of child abuse . . ., the causal link is contingent and indirect.   The harm does not necessarily follow from the speech, but depends upon some unquantified potential for subsequent criminal acts.”   

The Court also concluded that the attempt to criminalize virtual pornography in order to discourage other illegal conduct amounts to an effort to control thought.  The Court explained: “The Government submits further that virtual child pornography whets the appetites of pedophiles and encourages them to engage in illegal conduct.   This rationale cannot sustain the provision in question. The mere tendency of speech to encourage unlawful acts is not a sufficient reason for banning it.   The government ‘cannot constitutionally premise legislation on the desirability of controlling a person's private thoughts.’  First Amendment freedoms are most in danger when the government seeks to control thought or to justify its laws for that impermissible end.   The right to think is the beginning of freedom, and speech must be protected from the government because speech is the beginning of thought.” 

The Court struck down Sections 2256(8)(B) and 2256(8)(D) for these reasons.  The Court’s opinion appears in Aschroft v. Free Speech Coalition, 122 Sup. Ct. 1389 )April 16, 2002).

FEDERAL COURT IN VIRGINIA APPLIES U.S. LAW TO SPANISH DOMAIN NAME DISPUTE

Judge Claude Hilton of the United States District Court for the Eastern District of Virginia in Alexandria has concluded that a U.S. statute, the Anticybersquatting Consumer Protection Act, 15 U.S.C. §1125(d), applies to a dispute involving a domain name protected by Spanish trademark law.  In February 1997, the plaintiff registered the domain name barcelona.com with Network Solutions in Virginia. The plaintiff launched a website with that name, in which he provided information about the city of Barcelona, Spain, an e-mail service, a chat room, advertising, and links to other Internet services.  The City Council of Barcelona challenged the plaintiff’s use of the name Barcelona in his domain name, and a WIPO arbitrator awarded the domain name to the City.  The plaintiff then filed a claim for injunctive relief in federal court in Virginia.  In siding with the City, Judge Hilton noted that, while “Barcelona” is not a protected mark under U.S. law, it is protected under Spanish law and belongs to the City.  He also concluded that the Anticybersquatting Consumer Protection Act applies to the misappropriation of a mark protected by foreign law, explaining that “this law was framed to govern the registration of domain names on the Internet, and the framers were perfectly aware of the international nature of the Internet when enacting the law.”  Judge Hilton further concluded that the plaintiff violated the Act.  Barcelona.com, Inc. v. Excelentisimo Ayuntamiento de Barcelona, 189 F.Supp.2d 367 (E.D. Va. 2002).