“copying” and “piracy” in the digital age

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“Copying” and “Piracy” in the Digital Age

Dennis S. Karjala*

I. INTRODUCTION

“Copying” is usually thought of as the essence of copyright—infringement of the copyright owner’s fundamental and exclusive right of reproduction. Indeed, in the early days of copyright in the United States, not only was the protectable subject matter limited to “any map, chart, book or books,”1 the scope of protection was largely limited to verbatim reproduction of the entire work.2 Today, of course, copyright has expanded to include exclusive rights to prepare derivative works and exclusive rights of public distribution, performance, and display,3 but the notion of “copy” is often at least implicit in these expanded copyright rights.4 To an important extent, therefore, copyright is concerned with the creation, reproduction, and distribution of “copies.”

Exactly what constitutes a “copy” under copyright law has been a matter of contentious debate, at least since the U.S. Supreme Court held over 100 years ago that a piano roll was not a “copy” of the musical work that would be heard when the roll was used in a player piano.5 While that holding was overturned by the new definition of “copy” in the Copyright Act of 1976,6 the drafters of that statute were not, and could not have been, thinking of the ways

* Jack E. Brown Professor of Law, Arizona State University. 1. Copyright Act of 1790, 1 Stat. 124. 2. Suntrust Bank v. Houghton Mifflin Co., 268 F.3d 1257, 1261 n.9 (11th Cir. 2001) (stating that the judicial creation in 1841 of “the concept of ‘fair use’ . . . actually expanded the copyright monopoly, since until that time a translation or abridgement was not considered an infringement”); Stowe v. Thomas, 23 F. Cas. 201, 208 (C.C.E.D. Pa. 1853) (finding no infringement in a translation of Uncle Tom’s Cabin into German because the translation was not a copy of the work as published); cf. Jane C. Ginsburg, Creation and Commercial Value: Copyright Protection of Works of Information, 90 COLUM. L. REV. 1865, 1876–78 (1990) (19th century protection of information works, like maps, was limited to direct copying, and significant value added by second comer usually rendered it noninfringing); L. Ray Patterson, Copyright and “The Exclusive Right” of Authors, 1 J. INTELL. PROP. L. 1, 43 (1993) (copyright was designed to protect against competitors, primarily against piracy for competitive sale). 3. 17 U.S.C. § 106 (2006). 4. For example, the exclusive right of public distribution under § 106(3) and the exclusive right of public display under § 106(5) apply to the distribution or display of “copies.” Id. 5. White-Smith Music Publ’g Co. v. Apollo Co., 209 U.S. 1, 17–18 (1908). The player piano, also known as the pianola, is a self-playing piano that produces music in accordance with preprogrammed perforated paper rolls. Id. at 10. According to the Court, the rolls pass “over ducts connected with the operating parts of the mechanism . . . [so that via] perforations in the rolls, air pressure is admitted to the ducts which operate the pneumatic devices to sound the notes.” Id. The perforations on the piano roll correspond roughly to the pins on the cylinder of a traditional music box. Id. at 17–18. 6. 17 U.S.C. § 101 (definition of “copies”).


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in which digital technologies would affect the new conception of “copy.” Not long after the advent of the Internet, commentators began pointing out the inadequacies of the statutory scheme, and cases continue to arise presenting new fact situations that courts must resolve under the current definition. Some of these cases, such as who is the owner of a computer program copy for purposes of § 117, are amenable to sensible resolution under the existing statutory language, even though courts sometimes botch the analysis. Others, such as cases raising the public performance right of a work that exists as an electronic copy, defy even sensible doctrinal analysis because the underlying policies are not discernible. Still others, such as the Google Book Project and the use of temporary buffers to make permanent copies in a remote digital recording system, can reach essentially arbitrary answers under the statute, in the sense that the definition of “copy” simply has no rational relationship to the underlying copyright policies—no matter which side of the policy debate one is on.

II. “COPYING” AND “PIRACY”—POLICY GOALS

In the case of copyright, of course, there is widespread debate over the underlying policies, and reasonable people will often disagree about the appropriate goals. The instrumentalist views copyright through the lens of incentives: To what extent do the exclusive rights of copyright lead authors to create works that they would otherwise not produce or, if produced, would keep secret? On another side are the natural rights enthusiasts, who believe that creative authors should be able to control their intangible creations much as the creators of tangible property can—recognizing exclusive rights is simply the fair thing to do with respect to creators whose efforts benefit all of us. Finally, public users of works have an interest in accessing and disseminating knowledge. Although there is some overlap among some aspects of these goals, there is some mutual exclusivity among others, creating tensions in any attempt to implement underlying policy.

The statute itself, however, supplies general guidance to paradigm situations on which nearly all sides agree. Reproducing verbatim hard copies of works for distribution in direct competition with the copyright owner is an act that everyone agrees infringes the copyright. Creating a movie based on a novel without authorization is also generally agreed to infringe the derivative work right, even though both originality and creativity, not to mention financing, are required to make a movie. There are many circumstances in which few or none would deny infringement where a work has been publicly performed or a copy publicly displayed. These are the core rights that we, as a society, have agreed properly belong to the copyright owner (as tempered by limiting doctrines like idea/expression, fair use, and first-sale) because they further either the copyright owner’s economic interests or the author’s

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interests in deciding when and how a work is exploited. “Piracy” is a word that is legitimately applied to actions that interfere with these acknowledged rights of the copyright owner.

There is nothing intrinsically wrong, however, simply with making a copy of a protected work, as Professor Jessica Litman pointed out long ago:

When the old copyright laws fixed on reproduction as the compensable (or actionable) unit, it wasn’t because there was something fundamentally invasive of an author’s rights about making a copy of something. Rather, it was because, at the time, copies were easy to find and easy to count, so they were a useful benchmark for deciding when a copyright owner’s rights had been unlawfully invaded. Unauthorized reproductions could be prohibited without curtailing the public’s opportunities to purchase, read, view, hear or use copyrighted works.7

Thus, in the analog world, copies are a useful proxy for many of the acts that we wish to reserve to the copyright owner. Professor Litman also pointed out, however, that reproduction was usually expensive and primarily a commercial act, so affording control over reproduction was a means of giving a financial incentive to authors without interfering with the public’s opportunities for access.8 Digital technologies, of course, have changed all this:

Today, making digital reproductions is an unavoidable incident of reading, viewing, listening to, learning from, sharing, improving, and reusing works embodied in digital media. The centrality of copying to use of digital

7. Jessica Litman, Revising Copyright Law for the Information Age, 75 OR. L. REV. 19, 36–37 (1996). Indeed, some recent scientific research suggests that success of the human species may rest “on the right social and networking skills of knowing who, what, and when to copy.” Elizabeth Pennisi, Conquering by Copying, 329 SCI. 165 (Apr. 9, 2010) (quoting economist Samuel Bowles commenting on the research project). The research involved a tournament in which computer programs were pitted against one another in their ability to adopt and apply a social-learning strategy. Id. Each round of play gave the computer a choice of observing the behavior of another, exploiting a behavior previously observed, or innovating a new behavior. Id. at 166. Points were awarded only for exploiting, roughly modeling the tradeoff between current gain and investing for the future in either education or R&D. Id. The approach that won, apparently “hands down,” used a strategy heavily tilted toward imitation rather than innovation. Id. at 165; see also Tom Bartlett, Play It Again, Professor, CHRON. HIGHER ED. (Oct. 17, 2010), http://chronicle.com/article/Play-It-Again-Professor/124989 (reviewing Marcus Boon’s book In Praise of Copying, which argues that the dichotomy between “copying” and “not copying” is false).

Professor Balganesh has recently argued that “copying” under copyright law does indeed have a moral and normative dimension. Shyamkrishna Balganesh, The Obligatory Structure of Copyright Law: Unbundling the Wrong of Copying, 125 HARV. L. REV. 1664 (2012). He argues that copyright’s rights structure, which is based largely on the notion of copying as argued above, necessarily implies a duty not to copy and that conceptualizing copyright in terms of this duty not to copy, alongside copyright’s admitted incentive function, allows a deeper and more coherent analysis that can operate at different levels. Id. at 1688. In this work, however, Professor Balganesh does not address any specific definition of the word “copy,” and the point here is that it is precisely the statutory definition that is causing the problem. It may well be true—as argued herein—that some forms of “copying,” such as dynamic RAM copying of a part of a computer program that is legally stored on the user’s hard drive, under the current definition simply cannot be classified as moral wrongs. Perhaps looking at “copying” through Professor Balganesh’s moral lens would assist us in interpreting the statutory definition against a finding of infringement in those types of cases. I eschew this analysis herein because intellectual limitations prevent my seeing how adding the moral claim would advance the analysis. To take a nondigital example, is it morally wrong for a budding author to write out a verbatim copy of a novel by an admired author as a means of learning how to write, provided the copy is destroyed thereafter? Professor Balganesh recognizes fair use as a limitation on liability where the infringement is harmless, notwithstanding the moral wrong of “copying.” Id. at 1685. I assume he would find fair use on this example. I, however, do not even find a moral wrong. 8. Litman, supra note 7, at 37.



technology is precisely why reproduction is no longer an appropriate way to measure infringement.9

We should therefore look for “copying” that fits within the traditional goals of copyright and distinguish those kinds of “copies” from others that fit the statutory definition but do not and cannot interfere with the copyright owner’s traditional or expected markets. And where the new technologies allow or result in new markets not envisioned by the drafters of a copyright statute for the analog world, we should address the basic policy decision of who should be the beneficiaries of these new markets: How should new forms of earnings based on copyright-protected works be shared? Doctrinal reliance on statutory definitions adopted without these markets in mind, whether or not coupled with loud claims of “piracy,” will only get us to the correct policy choice by chance.10 This is not to say that digital “copying” that does not implicate a copyright owner’s traditional markets should always be deemed noninfringing or even held to be a fair use. Rather, it means that “copying” alone should not be decisive of the infringement question. The U.S. Court of Appeals for the Second Circuit’s decision in Cartoon Network and the Google Book Project provide good illustrations.

III. WHAT IS A “COPY” AND SO WHAT IF THERE IS ONE?

Cartoon Network LP v. CSC Holdings, Inc.11 and the Google Book Project12 illustrate the failure of the statutory definition of “copy” to resolve fundamental copyright policy issues relating to digital technologies. In Cartoon Network, reasonable people could (and did) differ on the question of how the statutory definition should apply to the new technology there involved, but none of the doctrinal argument (over the meaning of “transitory duration”) could address the normative question of who should be entitled to what share of the profits from it. On the other hand, there is no doubt that Google is making “copies” of protected works under the statutory definition in its Google Book Project. The problem is that none of the copies are accessible to anyone, and the issue is whether a copy that cannot be read should be sufficient to trigger liability for copyright infringement.

9. Id.; see also Mark A. Lemley, Dealing with Overlapping Copyrights on the Internet, 22 U. DAYTON L. REV. 547 (1997) (discussing the implications of the huge amount of “copying” that takes place in Internet communications as necessary artifacts of the technology). 10. Matthew Sag, Copyright and Copy-Reliant Technology, 103 NW. U. L. REV. 1607, 1681 (2009) (concluding that, while copyright law occasionally deals correctly with technological change, “more often, technology simply drags the law in its wake, going where it will”). Professor Sag argues that we must distinguish between expressive and nonexpressive uses of protected works and explicitly factor this distinction into the fair use analysis. Id. at 1626. 11. 536 F.3d 121 (2d Cir. 2008). 12. Class Action Complaint, The Authors Guild v. Google, Inc., 2005 WL 2463899 (S.D.N.Y. Sept. 20, 2005) (No. 05 Civ. 8136).



A. Cartoon Network

In Cartoon Network, Cablevision, a cable company, wanted to offer remotely a service to customers that Sony13 allows those same customers to do for themselves at home. Sony permits home cable customers to set the timer on a digital video recorder (“DVR”) or TIVO at home to record a program for later viewing. Cablevision’s remote storage DVR (“RS-DVR”) allows its customers to record cable programs on Cablevision’s system and to have those programs transmitted to the customers’ viewing systems at the time of each customer’s choosing. From the customer’s point of view, there is little difference between a local or a remote DVR.14 The customer in either case simply makes the appropriate settings at home, and the desired content can then be viewed at a later time. Should it make a difference for copyright purposes if the physical recording is done remotely?15 Plaintiffs in the case were “content” suppliers, who owned the copyrights to movies and TV programs that were delivered over the cable system pursuant to license with Cablevision. These plaintiffs did not challenge Sony, so it is evident that they thought doing the recording remotely should make a difference.

The Second Circuit’s opinion in Cartoon Network considered the technology in detail before applying the statutory definition of “copy.”16 In brief, Cablevision receives programs (“content”) from various providers, including the plaintiffs, and combines them into a single data stream. Before the RS-DVR system was in place, that stream simply went out to customers, who could tune their receiving devices to the programs of their choice. With RS-DVR, however, this stream is split into two streams. One stream goes, as before, directly to customers, who can view the programs in real time. The second stream is sent (through some intermediary devices) to something called the “Arroyo Server.” At Arroyo, the stream first goes to a “primary ingest buffer,” which holds at any given moment roughly 0.1 seconds of each program in the stream. If no customer has requested the recording of a particular program, that program simply passes through the primary ingest buffer and disappears from the system. If a customer has requested recording of a program, however, data from that program go to a secondary data buffer, which can hold up to 1.2 seconds of programming at any given time. From this secondary buffer, the program goes into a section of hard drive memory reserved to the customer requesting the recording. If 100 customers request recording of the same program, 100 separate copies of that same program are recorded in 100 separate sections of the hard drive. A customer can only request for playback programs that have been stored in that customer’s 13. Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 456 (1984). 14. Cartoon Network, 536 F.3d at 125. 15. By stipulation, both secondary liability and fair use issues were removed from the litigation. Id. at 124. 16. Id. at 124–25.



reserved section of the hard drive. All parties agreed that storage of program content on the hard drive constituted the making of “copies.”

The legal question was whether the sequential slices of programming held in the buffers just prior to hard drive storage (or discard) were also copies.17 Under § 101,

“Copies” are material objects, other than phonorecords, in which a work is fixed by any method now known or later developed, and from which the work can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.18 . . . . A work is “fixed” in a tangible medium of expression when its embodiment in a copy or phonorecord, by or under the authority of the author, is sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration.19

So, in order to be a copy a work must be fixed in a tangible medium, and in order to be fixed it must be embodied in a copy to permit its perception for more than a “transitory duration.” The facts of Cartoon Network show the statute to be vague: Is it the embodiment that must continue for more than a transitory duration, or is it sufficient that only the perception resulting from the embodiment be nontransitory? The embodiment in the buffers in 0.1–1.2 second slices was apparently necessary as a technological matter to allow making the permanent (i.e., nontransitory) hard-drive copies ordered by customers.20 Assuming, as the Second Circuit eventually concluded, that 1.2 seconds is “transitory,”21 was the embodiment in the buffers nevertheless a “copy” because it permitted the making, on the hard drive, of what everyone agreed was a copy?

The district court took the view that the embodiment in the buffer need not be more than transitory as long as it permitted the making of a permanent, perceivable copy.22 The Second Circuit took the view that the transitory-

17. Id. at 126. The district court held that the cable company “made” the hard drive copies and found infringement on that basis. The Second Circuit extended the approach of Religious Technology Center v. Netcom On-Line Communication Services, Inc., 907 F. Supp. 1361 (N.D. Cal. 1995) from the Internet context and looked to the volitional conduct that causes a copy to be made to determine who should be directly liable for that act if it is held to be infringing. Cartoon Network, 536 F.3d at 130. In Cartoon Network, the direct volitional conduct was that of the customer, so Cablevision was not directly liable even if making the hard drive copy was infringement. Id. at 133. Issues of contributory infringement, as well as fair use, were left out of the litigation by stipulation of the parties. Id. at 124. Consequently, unless the action in the buffers constitutes the making of a copy, Cablevision would not have any copyright liability, while the hard drive copy “made” by the customer is likely a fair use under Sony. 18. 17 U.S.C. § 101 (2006) (definition of “copies”). 19. Id. (definition of “fixed”). 20. See Cartoon Network, 536 F.3d at 127–30. 21. Id. at 129–30. 22. Id. at 127. The district court partially relied on a Copyright Office report stating that an embodiment is fixed unless “a reproduction manifests itself so fleetingly that it cannot be copied.” U.S. COPYRIGHT OFFICE, DMCA SECTION 104 REPORT: A REPORT OF THE REGISTER OF COPYRIGHTS PURSUANT TO SECTION 104 OF THE DIGITAL MILLENNIUM COPYRIGHT ACT 111 (2001) (basing its conclusion on a policy of giving the copyright owner exclusive control over all reproductions from which economic value can be derived). It is perhaps worth observing that under this reasoning, every program in the content stream going



duration requirement applied both to the embodiment and to the perception.23 Without giving much of a reason, the Second Circuit then concluded that, on the facts of the case at least, 1.2 seconds was “transitory.”24 Thus, the court implicitly said that plaintiffs must look to the copy that is made for their remedy (i.e., the full copy made by the customers and held in their individual sections of memory).25

If we stand back a bit from the statutory language and doctrine, the buffering activity in Cartoon Network was a technological artifact, necessary to make the permanent hard-drive copies without which the entire system would be worthless.26 Sony, presumably, remains good law and says that people can make private copies at home for viewing at a later time.27 RS-DVR allows exactly the same thing but with, arguably, a more advanced technology. Perhaps it is time to rethink Sony and whether home copying for later private viewing should be permitted. If such use is to be permitted, however, why should users be restricted to old technologies? This is then the real issue in Cartoon Network: Although it appears to be a technical issue about whether the buffering activity results in the making of a “copy,” in fact the issue is whether content creators should be able to get a cut of the money to be made from new technologies that allow home copying for later private viewing. The statutory definition of “copy” simply does not address that issue.

to the Arroyo Server was copied, not just those programs requested by customers. See Cartoon Network, 536 F.3d at 124. Even if no customer requested recording of a given program, so that the program disappeared after passing through the primary ingest buffer, each 0.1 second slice of the program that was held in the primary ingest buffer could have been sent to the secondary buffer and, ultimately, permanently recorded on the hard drive. It seems more natural to treat each of the buffers in this system as parts of the copying tool that results in permanent copies on the hard drive and not as embodying “copies” themselves. See infra notes 24 & 26. 23. See Cartoon Network, 536 F.3d at 129–30. 24. Id. at 129–30. Among the facts to be considered, perhaps, is that the only copies enabled by the buffering activity were those that ended up in those sections of the hard drive allotted to customers who had ordered the program in question. In a sense, therefore, the buffers were simply part of the tool used to make the hard-drive copy. Taken to its extreme, we can imagine a system in which, after the user requests a particular program to be recorded for later viewing, the digital bytes representing the program go directly and sequentially through myriad electronic components. In each component, each byte may be present for some tiny fraction of a second. Nevertheless, under the district court’s reasoning, each component through which the signal passes makes a “copy” of the program because the end result is a permanent copy stored on the hard drive of the system. 25. Given that a permanent copy was made and stored in the user’s individual section of the hard drive, the question was who “made” that copy. The Second Circuit concluded that the act of “copying” requires a volitional act, so it is the user (customer), not the operator of the system (Cablevision), who does the copying. Id. at 131–32. 26. An analogy might be a paint brush that serves as the intermediary between an artist’s palette and her canvas. Each molecule of paint that ends up on the canvas in the finished painting passes through or is carried by the artist’s brush. The final painting is a copy of the work of authorship it embodies, but did the paint brush also contain a copy because it carried the individual elements of the final product sequentially? The paint brush is most naturally viewed as a tool for making the ultimate copy of the work of authorship (the painting), not as embodying a copy of that work itself. 27. Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 456 (1984).



B. The Google Book Project

Everyone knows about Google’s ongoing effort to make exact electronic copies of all of the books contained in a number of major libraries. The idea is to allow keyword searches of, literally, everything that has ever been written. Few seriously question the potentially enormous value of having all of the world’s literature in searchable electronic form. Moreover, for works still under copyright, Google will respond to search requests by giving only fifty words or so surrounding the keyword and telling the searcher how to acquire an authorized copy if desired. Google will respect requests of copyright owners who wish to opt out of the system, but to get affirmative permission under an opt-in system arguably raises insuperably high transaction costs.28 Consequently, if Google cannot do this, nobody can, and the project will not get done.

Google’s right to engage in this basic project (digitizing all books and allowing searches with snippet presentations, with an opt-out provision for copyright owners) was challenged by The Authors Guild.29 A settlement was reached that would have allowed Google to go beyond the basic project and, among other things, sell copies of the books in its digital library.30 That settlement, however, was rejected by a federal district court as not “fair, adequate, and reasonable.”31 Assuming that presentations of the fifty-word snippets around the search terms is a fair use, the issue in the case if it goes to trial will be whether Google’s copying of entire protected works into the database was a fair use. For purposes of the policy discussion, however, and given that the original digitalizations of the hard copy books into electronic form easily fit within the statutory definition of “copy,” the question is whether this is the kind of copy that should be of concern. If someone makes 100 physical copies of a book that he immediately burns without looking at any of them, has the copyright owner been injured? In the analog world, this would be just plain stupid, so it was rarely, if ever, done and never arose in practice. In terms of the Google Book Project, however, is a copy that literally no one can read one that should be a matter of copyright concern?32 In rejecting the proposed settlement with the Authors Guild, the district court never addressed this crucial question.33

28. See Sag, supra note 10, at 1657–62 (discussing costs in detail). 29. Class Action Complaint, supra note 12. 30. Authors Guild v. Google, Inc., 770 F. Supp. 2d 666 (S.D.N.Y. 2011). 31. Id. 32. There are some fears, perhaps legitimate, that Google will not in fact be able to keep the electronic copies it is making out of the hands of people who wish to make copies of entire works without paying for them. For present purposes, we simply assume that access can and will be limited in the way Google has said it would be. The question of whether Google has made a copyright-cognizable “copy” remains even under this assumption. 33. For example, the district court said, “Google engaged in wholesale, blatant copying, without first obtaining copyright permissions” and “it is incongruous with the purpose of the copyright laws to place the onus on copyright owners to come forward to protect their rights when Google copied their works without



We might begin to get a handle on the problem by imagining a

somewhat different technology. Suppose someone invented a mechanical device that could rapidly “read” through (without making even a formal copy) all of the hard-copy books in a library, picking out keywords input by the searcher. In this case, there would be no copyright “hook” on which to hang an infringement claim. Electronic searching requires that the text be put into digital electronic form (a “copy”) and probably requires further copying into RAM and other memory facilities during searches. The copyright infringement claim in this situation, then, is wholly a product of the technological change from analog to digital. The copyright owner’s traditional markets are no more strongly affected by the electronic search than they are by the hypothetical mechanical search; therefore, there is no policy basis for their leading to different results on the infringement issue.

The conclusion that mechanical and electronic searches should be treated equivalently in order to avoid discriminating in favor of one technology over another, however, does not tell us what the best answer is. The Google Book Project represents a radical new use for an old product, and Google (presumably) expects to make money out of this new use—a use that depends on the prior efforts of tens of thousands of authors in producing the world’s literature. Clearly, we do not reserve rights to control all new uses of old works to the copyright owners (e.g., home video recording). It is equally clear, however, that the making or not making of a “copy” should not be determinative of how profits from the new use are earned or shared.

IV. UPLOADS TO INTERNET “LOCKERS”

Recent, and still ongoing, litigation raises the issue of what constitutes a “copy” in the context of an upload of music files to a “locker” in the cloud. ReDigi, Inc. operates an online service allowing users to sell music files lawfully purchased from iTunes.34 Users upload into a “cloud locker” music files that ReDigi software has validated by checking various ownership data. From that locker, the user (and only the user) may stream the music file to any Internet-connected device. However, the user may also sell the file to another ReDigi user, after which the file pointer associated with the transferred file is associated with the locker of the purchaser and is no longer accessible through the locker of the seller. Apparently, no copying of the file takes place during first seeking their permission.” Id. at 679, 682. These statements of the court are little more than abstract copyright dogma arising out of the analog age. The district court’s decision followed similar reasoning and reached a similar conclusion as the Paris Court of First Instance, which enjoined the scanning into Google’s database of French language books by French authors. See Rick Mitchell, French Court Declines to Apply Fair Use, Finds That Google Book Project Infringes, PAT., TRADEMARK & COPYRIGHT LAW DAILY, Dec. 24, 2009, available at BLOOMBERG BNA (citing Editions du Seuil v. Google Inc., T.G.I. Paris (Dec. 18, 2009)). 34. Jessica McKinney, Does ReDigi’s ‘Online Marketplace for Used Digital Music’ Violate Record Companies’ Reproduction and Distribution Rights Under the Copyright Act?, 84 BNA PAT., TRADEMARK & COPYRIGHT J. 933 (2012).



this transfer transaction. Capitol Records has sued ReDigi for infringement of the reproduction and distribution rights associated with sound recording copyrights owned by Capitol.35

Much of the legal argument in this case hinges on whether the user upload process involves the making of a “copy” of the music file in question. Capitol apparently argues that uploading and downloading files inevitably involves the production of copies, which certainly is true in most Internet operations, at least up until now. ReDigi argues, however, that its technology results in a mere “transfer” of the file from one physical location to another. ReDigi claims that its system works in such a way that it eliminates the copy of the music file that was on the user’s hard drive at the time of uploading.

The real issue in this case is the viability of the first-sale doctrine in the digital age, although the case is being litigated under the reproduction right. Capitol Records argues that the phonorecord “sold” is a different physical embodiment of its protected sound recording than the phonorecord first purchased by the uploader from iTunes, which seems true enough.36 However, the only questions for the first-sale doctrine under § 109 is who “owns” the phonorecord that is sold and whether that phonorecord was lawfully made.37 Assuming the upload was lawful, whether because it was a fair use or because no new copy (i.e., phonorecord) was made in the upload process, the only potential “owners” of the phonorecord in the seller’s locker are the seller or ReDigi. In either case, the sale is authorized by the owner of the phonorecord, so the first-sale doctrine should be available. Thus, the issue boils down to whether the upload was lawful, which is why the parties are arguing so heatedly over the reproduction right’s application to these facts.

To get a handle on the policy issues, let us imagine a technological process under which a music file is transferred from a user’s hard drive to a cloud locker byte by byte. That is, each byte is copied, one byte at a time, to a memory location in the cloud, and each byte is sequentially erased after it has been copied. This would be equivalent in the analog world of taking the physical ink representing each letter of a book one at a time and placing it on a different backing. Few would say that the book has been “copied” by this process, and indeed at least one 1909 Act case, cited by ReDigi, held that the transfer of a painting (even all at once) from one substrate to another was not a “reproduction” that implicated the reproduction right.38 Digital technology makes it impossible to transfer the physical medium in which a work is embodied, such as a hard drive, without also transferring much that the 35. Complaint, Capitol Records LLC v. ReDigi, Inc., 2012 WL 32056 (S.D.N.Y. Jan. 6, 2012) (No. 12-CV-00095). The doctrinal issues in this matter are discussed in some detail in McKinney, supra note 34. The court thus far has denied a preliminary injunction on the ground that Capitol failed to show irreparable harm, although it did demonstrate a likelihood of success on the merits. Id. 36. Complaint, Capital Records LLC, supra note 35, ¶ 21–22. 37. 17 U.S.C. § 109 (2006). 38. C.M. Paula Co. v. Logan, 355 F. Supp. 189 (N.D. Tex. 1973).



transferor wishes to retain. Whether erasure takes place immediately after transfer or whether the transfer takes place one byte at a time with erasure occurring as part of the ongoing process makes no difference to the end result or to the position of the copyright owner once the process has finished. Yet, if the byte-by-byte process, including erasure, is deemed the making of an unauthorized copy, the first-sale doctrine is for all practical purposes a dead letter in the digital age. On the other hand, if the byte-by-byte process is not deemed the making of an authorized copy, neither should a complete transfer followed by a complete erasure. ReDigi seems essentially to be arguing that its system effects a byte-by-byte transfer from the user’s hard drive to the cloud locker. Indeed, it is likely that ReDigi designed its system in what otherwise would be considered an overly complicated way precisely to avoid the claim that its system involved even the momentary making of a “copy” (i.e., “phonorecord”).

Either we believe in the first-sale doctrine in the digital age or we do not. If we no longer believe in it, we should discard it openly and not through verbal gymnastics interpreting the definition of “copy” for the purposes of the statute’s reproduction right. Nor should our definition of “copy” force systems engineers into unduly intricate or artificial designs simply to protect the right of the owner of a copy of a music file to transfer that file, provided that no copies derived from the transferred file are retained.

V. INCIDENTAL RAM OR CACHE COPYING

Two recent cases hold that incidental copying into RAM or cache can lead to a finding of copyright infringement. In each, the defendant, on behalf and at the request of its own customers, visited web sites with automated tools in order to extract copyright-unprotected information or to engage in otherwise copyright-unregulated activities. In the course of these visits, copyright-protected elements of the visited web sites were necessarily copied into RAM and perhaps cache of the defendants’ computers, although the defendants erased or otherwise disposed of those elements as soon as they had extracted the copyright-unprotected customer information that their customers had authorized them to acquire.39

In Ticketmaster L.L.C. v. RMG Technologies, Inc.,40 the defendant marketed an automated device that could access the publicly available Ticketmaster web site and purchase tickets for events beyond the limitations established by Ticketmaster.41 The direct liability claim was that every visit 39. In both cases, Sega Enterprises LTD v. Accolade, Inc., 977 F.2d 1510 (9th Cir. 1992) and Assessment Technologies of WI, LLC v. WIREdata, Inc., 350 F.3d 640 (7th Cir. 2003), should have led to a finding of fair use. The prima facie infringement issue, however, can be addressed more cleanly through the notion of “copying.” 40. 507 F. Supp. 2d 1096 (C.D. Cal. 2007). 41. Id. at 1102.



by the defendant to the Ticketmaster site necessarily placed protected elements of that site in the defendant’s RAM or cache.42 The court concluded that those RAM or cache copies were “copies” under MAI Systems Corp. v. Peak Computer, Inc.43 and the statute.44 Because the defendant in Ticketmaster violated the site’s Terms of Use (prohibiting, for example, commercial or automated visits), the defendant lost any license it may otherwise have had to visit (and therefore make “copies” of) the site’s protected elements.45

In Facebook, Inc. v. Power Ventures, Inc.,46 the defendant used automated computer programs to aggregate the personal data relating to individuals with multiple social networking sites, including Facebook. Defendant accessed the Facebook accounts of its customers, with their authority, and made that information available at a single location along with information taken from other sites.47 Facebook claimed that these visits by the defendant violated the Facebook Terms of Use, thereby removing the defendant’s “license” to copy the protected elements of the Facebook site.48 The court denied the defendant’s motion to dismiss the direct copyright claim, relying on MAI and Ticketmaster.49

In these cases, the copying of protected web site elements was incidental to acquiring copyright-unprotected information (both) or engaging in copyright-unregulated acts (buying tickets to events in Ticketmaster). The nature of digital technology, however, makes such incidental copying necessary. It is impossible to visit a web site without making “copies” of whatever is found at that site, whether it is copyright-protected or whether the visitor wishes to make such copies.50 Provided the “copied” elements of the web sites are not used or distributed to make a competing site, no copyright interest of either plaintiff has been injured. Unless the making of these copies is a fair use, these rulings expand copyright to the protection of otherwise unprotected data and to the regulation of business models (such as methods of

42. Id. at 1105. 43. 991 F.2d 511 (9th Cir. 1993). 44. Ticketmaster, 507 F. Supp. 2d at 1105. 45. Id. at 1112–1113. 46. No. C 08-5780 JF (RS), 2009 WL 1299698 (N.D. Cal. May 11, 2009). 47. Id. at *3. 48. Id. 49. Id. at *5. 50. Craigslist, Inc. v. Naturemarket, Inc. relied on Ticketmaster to find copyright infringement based on breach of terms of use relating to automated postings on Craigslist. 694 F. Supp. 2d 1039, 1055 (N.D. Cal. 2010). The only “link” to copyright was the need to make cache copies of the Craigslist website, and because defendants exceeded the terms of the “license,” their copying of the otherwise publicly available website became copyright infringement. Craigslist has since brought similar actions against other defendants. See Jessica McKinney, Will Craigslist’s Copyright Claims Succeed in Shutting Down Apartment Listings Aggregator PadMapper and Its Data Supplier 3Taps?, PAT., TRADEMARK & COPYRIGHT LAW DAILY (Aug. 31, 2012), available at BLOOMBERG BNA. One need not condone the activities of defendants in cases like these to question whether copyright is designed for, and capable in the long run of sustaining the weight of, what is otherwise a generalized claim of unfair competition.



selling tickets) other than those implicated by the exclusive rights of copyright.51

VI. RAM COPYING OF COMPUTER PROGRAMS

Probably the first case that should have made us think twice about the definition of “copies” adopted in the 1976 Act was MAI v. Peak cited above. The issue was whether loading a computer program into RAM constituted making a “copy” under the statutory definition.52 The case seemed clear to the court, partly because this was one of the few software issues that was actually foreseen by the National Commission on New Technological Uses of Copyrighted Works (“CONTU”).53 Pursuant to CONTU’s recommendation, Congress adopted § 117:

(a) Making of additional copy or adaptation by owner of copy. — Notwithstanding the provisions of section 106, it is not an infringement for the owner of a copy of a computer program to make or authorize the making of another copy or adaptation of that computer program provided:

(1) that such a new copy or adaptation is created as an essential step in the utilization of the computer program in conjunction with a machine and that it is used in no other manner . . . .54

Unfortunately, Congress substituted the word “owner” for CONTU’s recommended “rightful possessor” in this statute, for reasons that remain enshrouded in mystery. Nevertheless, because the statute plainly envisioned, and made limited exception for, the loading of a computer program into RAM, it seemed that CONTU,55 and therefore Congress, considered loading into RAM in general to be copyright infringement, or at least “copying.”

The MAI court dealt only cursorily with the issue of “owner” under § 117, concluding in a footnote that MAI licensed its software so its customers did not qualify as “owners” under § 117.56 The failure of the Ninth Circuit in MAI to engage in any real analysis of the owner/licensee issue and 51. Professor Perzanowski has argued that the term “transitory duration” be interpreted by reference to underlying policies of the statutory fixation requirement. Aaron Perzanowski, Fixing RAM Copies, 104 NW. U. L. REV. 1067, 1093 (2010). He finds those policies to be evidentiary and as promoting the constitutional purpose to promote the public dissemination of works of authorship. Id. at 1094. If a version disappears before it can serve the evidentiary purpose of delimiting what the work was, even if it exists for a matter of hours, it should not be deemed “fixed.” Id. at 1095. Similarly, a student commentator argues that the “transitory duration” element of the definition of “copy” in the context of Facebook and Ticketmaster should not be a set period of X seconds but rather should depend on whether making a temporary duplicate puts the protected work in danger of an unlawful distribution. Li-Jen Shen, Comment, A Duration No More than Necessary: A Proposed Test for the Duration Requirement of RAM-Copy Fixation, 51 JURIMETRICS J. 217 (2011). 52. MAI Sys. Corp. v. Peak Computer, Inc., 991 F.2d 511, 518 (9th Cir. 1993). 53. NATIONAL COMMISSION ON NEW TECHNOLOGICAL USES OF COPYRIGHTED WORKS, FINAL REPORT (1979) [hereinafter CONTU Report]. CONTU was established by Congress in 1974 to advise Congress concerning how to handle computer programs under intellectual property law, among other things. 54. 17 U.S.C § 117 (2006). 55. CONTU expressly concluded that “[b]ecause the placement of a work into a computer is the preparation of a copy, the law should provide that persons in rightful possession of copies of programs be able to use them freely without fear of exposure to copyright liability.” CONTU Report, supra note 53, at 13. 56. MAI Sys. Corp., 991 F.2d at 518 n.5.



its simple acceptance of MAI’s one-sided characterization of the transaction as a “license” has plagued the entire field ever since57 and has brought new pressure on what we should consider a “copy” of a computer program. Moreover, as software is embedded into more and more consumer devices like automobiles and home appliances, we face a serious risk that copyright will be employed to control uses of these devices that have nothing to do with the goals of copyright’s exclusive rights.

Because of the congressional change of language noted above from “rightful possessor” to “owner,” software copyright owners purport to distribute copies of even mass-market software under “licenses.” If the copy held by the customer is not owned but only licensed, § 117 does not apply, and the copyright owner can restrict or even prohibit use of the program in a computer. More important, any use of the program that goes beyond the scope of the “license” becomes an infringement of copyright, even if the violation relates to activities that have nothing to do with the exclusive rights of copyright.

Perhaps the best example of the new pressure on the definition of “copy,” as well as the expanded use of copyright to police and sanction activities well outside copyright’s concern with the reproduction and public distribution and performance of works, is MDY Industries, LLC v. Blizzard Entertainment, Inc.58 Blizzard is the creator, operator, and copyright owner of the popular multiplayer Internet game World of Warcraft (“WoW”). Players of WoW acquire the client-side program either on disks or by downloading from Blizzard and install the program on their hard drives. It is worth noting that these hard-drive installations by WoW players are authorized by Blizzard. Before they install the program, however, users must agree to an end-user license agreement (“EULA”), and each time they go online to play they must agree to certain Terms of Use (“TOU”). These contracts, among other things, prohibit playing the game by means of

57. The Ninth Circuit recently reaffirmed MAI and its progeny. Vernor v. Autodesk, Inc., 621 F.3d 1102 (9th Cir. 2010). The Vernor court attempted to analyze the owner/licensee issue and set forth three factors to consider in resolving the it: whether the copyright owner has specified that the transaction is a “license;” whether there are significant restrictions on transfer; and whether “notable” use restrictions are imposed. Id. at 1110–11. All of these factors are within the control of the copyright owner, which means that user rights under both the first-sale doctrine and § 117 are optional, with the choice being in the owner of the copyright. 58. No. CV-06-2555-PHX-DGC, 2008 WL 2757357 (D. Ariz. July 14, 2008) (copyright issues). A later proceeding in the same dispute considered the issues arising under the Digital Millennium Copyright Act (“DMCA”). MDY Indus., LLC v. Blizzard Entm’t Inc., 616 F. Supp. 2d 958 (D. Ariz. 2009). The Ninth Circuit reversed the district court’s holdings on copyright issues, but unfortunately not by correcting the flaws of MAI and Vernor but by finding, on the facts of the case, that the EULA and TOU provisions prohibiting the use of bots were covenants rather than conditions. MDY Indus., LLC v. Blizzard Entm’t, Inc., 629 F.3d 928 (9th Cir. 2010). Thus, mere breach of the covenant by the user did not revoke the “license” to play the game, so the user was no longer a copyright infringer. Absent that primary infringement, MDY could no longer be a contributory infringer. NOTE: The author served as a consultant to the attorneys for MDY Industries in this case.



automated devices or software, and WoW employs a software device called Warden to detect automated play. MDY made and sold a program called Glider that avoided detection by Warden and allowed its users to advance their characters in WoW, even when they were not physically at their computers. Blizzard’s argument against MDY was that Glider users lost their “license” from Blizzard to load the WoW software into RAM from the users’ hard drives. This made those individual users copyright infringers, and MDY, by supplying the offending software allowing automatic play, was liable for contributory infringement.

There are many issues in the MDY case, but our focus here is on unauthorized copying of Blizzard’s WoW software into RAM during play and on the owner of the “copy” that is being used in a computer for purposes of § 117. WoW is a large and complex program, even just that part that resides on the user’s hard drive.59 Therefore, rather than loading the entire program into RAM, portions are loaded into, and taken out of, RAM to and from the hard drive of the user’s computer as those portions are needed in the game. Consequently, the “RAM copy” of the program, at least in this case, is not statically waiting in RAM to be called into use, and indeed the entire program is never in RAM at any one time. It is of course hornbook law that verbatim copying of any “expressive” and more-than-de-minimis portion of a protected work is prima facie infringement. The kind of “copying” that occurs during WoW play, however, is a technological artifact of the game’s design and is even more removed from the dangers against which copyright is designed to protect than, say, the book copies made under the Google Book Project. It would be plain silly to try to make an unauthorized copy of the WoW client-side software by somehow trying to capture its various segments from a user’s computer during dynamic play. Moreover, to the extent we rely on pure doctrine and statutory language, the technological artifact that the WoW software is partially loaded into and out of RAM during play is crucial to Blizzard’s case. If the entire program were loaded into RAM and simply stayed put during play, and if the user did not turn on the “illegal” Glider program until after WoW had been fully loaded, there would be no RAM copying on which Blizzard could pin a copyright infringement claim. Blizzard would in that case be relegated to its contract claim against the player/user under the license.

The district court in MDY held that the WoW players were licensees, not owners, of the WoW software resident on their computers.60 The court cited only MAI and its progeny and did not consider the crucial word “copy” in § 117; the statute refers to the “owner of a copy,” not the owner of the 59. In a multiplayer interactive game like WoW, each player interacts with other players through a server, which obviously is programmed with its own server software. There was no allegation in MDY that server-side code was copied during play, so the entire focus was on the client, or user, side. 60. MDY Indus., LLC, 2008 WL 2757357, at *8.



software copyright. The court’s holding would have been wrong even if the issue were copying of the WoW program from disks acquired at a software store because it makes no sense to say that someone who purchases a physical disk that he may hold in perpetuity, for a single, one-time fixed price, is not the “owner” of the disk.61 In this case, however, the copy that is being loaded into and out of RAM during play is the copy stored on the user’s hard drive. Recall that installation on the hard drive was authorized by Blizzard—the user loses his or her so-called “license” only when play violates some provisions of the EULA or TOU. Does anyone seriously claim that Blizzard is the owner of those particular sectors of the users’ hard drives that contain the WoW program (or that Blizzard owns the users’ hard drives themselves)? Simply asking the question shows that the copies at issue cannot be “licensed” and that § 117 should apply. If Blizzard is going to rely on doctrine without reference to policy in claiming that “copies” are made in RAM during WoW play, what is sauce for the goose is sauce for the gander; let Blizzard rely on pure doctrine and common sense without reference to policy in determining who owns the hard-drive copies of its WoW client-side software. Here is a situation in which we literally have the making of a “copy” under the statutory definition, but it is a kind of copy that bears no relationship at all to the reasons underlying the statute’s exclusive reproduction right and is explicitly permitted by § 117.

VII. PUBLIC PERFORMANCE OF ELECTRONIC COPIES

A second issue in the Cartoon Network case was that of public performance.62 After the program was recorded in a particular user’s section of the Cablevision hard drive—which “copy” the court concluded was “made” by the user and not by Cablevision—electronic signals representing that copy were streamed to the user’s television screen in response to the 61. To treat mass-marketed software copies as “licensed” pursuant to shrinkwrap or clickwrap agreements makes all of the user rights of copyright optional with the copyright owner. This includes not only the right to resell under the first-sale doctrine or the right to load the program into RAM under § 117. It could also eliminate all rights to reverse engineer and fair use generally. Even the idea/expression distinction will lose much of its power, as “licensees” could lose their licenses to use the software by a contract that forbids taking any ideas contained in the software for use in other works. Therefore, to the extent such “licenses” impinge on users’ rights mandated by federal copyright law, they should be deemed preempted. See Dennis S. Karjala, Federal Preemption of Shrinkwrap and On-Line Licenses, 22 U. DAYTON L. REV. 511 (1997). Even where the “licenses” do not impinge on users’ rights of copyright but generally restrict user activities that copyright does not regulate (such as playing a video game by means of a bot), they carry copyright far beyond its traditional moorings in the protection of art, literature, and music. Any consumer device, such as a refrigerator, washing machine, or automobile, that uses software can be designed in such a way that the software must be reloaded with use, which means that any use of the consumer device beyond those permitted in the “license” is not only breach of contract but actual copyright infringement. Car manufacturers, for example, could remove the “license” to use the embedded software if the user has repairs done at an “unauthorized” third-party workshop. See Perzanowski, supra note 51, at 1104 (“a broad RAM copying rule . . . would permit rights holders much greater power over private uses than copyright has traditionally conferred”). But see Vernor v. Autodesk, Inc., 621 F.3d 1102 (9th Cir. 2010), which is discussed briefly in note 57 supra. 62. Cartoon Network LP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008).



user’s request. At issue was the second or “transmit” clause of the statute’s definition of “public performance”:

To perform or display a work “publicly” means— . . . . (2) to transmit or otherwise communicate a performance or display of the work . . . to the public, by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times.63

The Second Circuit avoided a decision on who, Cablevision or the user, was doing the “transmitting” or “communicating” within the meaning of this clause because it was able to conclude that, in any event, the transmission or communication was not “to the public.”64

The Second Circuit rejected the content owners’ argument that “performance” in the statutory definition means “original performance.” Because, after running through the nation’s broadcast and cable systems, that original performance reaches many people, usually in different places and often at different times, any further transmission would be deemed “public,” even one by an end user who sends the signal from one room of his house to another. This would have the obviously unintended result that purely private transmissions were impossible. Consequently, the court concluded that “transmitting a performance to the public” refers to the “performance created by the act of transmission.”65 Because the transmissions in question were of a single-copy-to-single-recipient type, they were not “to the public” and thus there was no public performance.66

The interpretation of the transmit clause that treats the transmission of a performance from a single or master copy to multiple recipients as a public performance stems from Professor Nimmer.67 This interpretation was 63. 17 U.S.C. § 101 (2006) (definition of “publicly”). 64. Cartoon Network, 536 F.3d at 134. 65. Id. 66. Id. at 139. Professor Malkan has argued that Cartoon Network’s treating each transmission as a separate performance was erroneous and that the real issue should have been whether the system involved made the service offered by Cablevision “interactive.” Jeffrey Malkan, The Public Performance Problem in Cartoon Network LP v. CSC Holdings, Inc., 89 OR. L. REV. 505, 542–46 (2010). It is not entirely clear, however, at least to me, how this interpretation meets the Second Circuit’s objection that any transmission of a recorded performance of any protected work could escape the “public performance” net, even a transmission by an individual consumer from one room of his home to another. While we could rely on fair use to avoid liability on such facts, we are left with the quandary of why the statute does not directly prohibit all transmissions of recorded performances instead of the complicated language actually used concerning recipients of a transmission in separate places or at different times. 67. MELVILLE B. NIMMER & DAVID NIMMER, NIMMER ON COPYRIGHT § 8.14[C][3] (Matthew Bender, rev. ed. 2012). Professor Malkan has accurately pointed out that the issue is what the word “performance” means in the statute: Does it mean the performance initially transmitted from the content producer to Cablevision, or does it mean the performance that is embodied in the specific copy saved at the request of a customer on Cablevision’s hard drive? Malkan, supra note 66, at 540–41. As a purely doctrinal matter, we might recall that the statute refers to transmission of “a performance . . . of the work,” not transmission of a copy of the work. The “work” in question would seem to be the original audiovisual work produced by the content creator. Cablevision’s hard drive contains a copy of that audiovisual work, and that copy is “performed” when viewed by the ordering Cablevision customer. However, the work that is being performed, as opposed to the copy that is being performed, would seem to be the original audiovisual work.



adopted by the Third Circuit in Columbia Pictures Industries, Inc. v. Redd Horne, Inc.,68 in which the same copies of films on videotape were sequentially transmitted to different customers who viewed the films in private rooms at another part of the video store.69 Because different members of the public viewed the same copy at different times, the transmissions were each deemed a public performance.70 It appears that the “same-copy, multiple-recipients” view necessarily underlies the Second Circuit’s reasoning in Cartoon Network, notwithstanding the court’s assertion that “performance” in the statute refers to “performance created by the act of transmission.”71 If the latter were the test, successive transmissions from the same video cassette or DVD over the Internet into, say, private homes would not rise to the level of a “public performance” because each act of transmission would be a separate performance. Indeed, a federal district court in California explicitly distinguished Cartoon Network on this ground in holding that the Zediva DVD Internet “rental” service, under which a physical DVD was played on Zediva equipment in response to a customer order and streamed to the customer’s computer, was a public performance of the movie recorded on the DVD.72

A district court in the Second Circuit has confirmed the importance of sequential transmissions from the same copy to the transmit clause in the statutory definition of “public performance.” In American Broadcasting Cos. v. Aereo, Inc.,73 the defendant picked up New York area television broadcast signals on sets of miniature antennas. Each antenna was capable of capturing all of the programs that were on the air at any given time, and each of defendant’s customers, who could be located anywhere in the country, was assigned a separate antenna. Customers could then log in to the Aereo system online, choose the New York area broadcast station they wished to watch, and watch the programs either in real time or, similar to Cablevision’s system in Cartoon Network, have the programs recorded for later viewing.74 Plaintiff

Id. at 554. It is the work in which the copyright inheres, not the copy. The problem with this straightforward doctrinal analysis, however, is, as discussed in the previous footnote, that any private transmission of a copy of that television show would still be a “public performance.” 68. 749 F.2d 154 (3d Cir. 1984). 69. Id. at 159. 70. The Redd Horne court also held that there was a public performance under the first clause of the definition as well because the appropriate “place” of the performance was the store as a whole, not the private rooms in which the videos were viewed. Id. Because the focus here is on the transmit clause, we need not dwell on whether the viewing room in the video store is meaningfully different on the public/private distinction from a hotel room in which a video cassette, borrowed from the front desk, is viewed sequentially by different guests in the same or different rooms of the hotel. Cf. Columbia Pictures Indus. v. Prof’l Real Estate Investors Inc., 866 F.2d 278, 281 (9th Cir. 1989) (stating that while a hotel may be open to the public, a room, once rented, is not). 71. Cartoon Network, 536 F.3d at 136. 72. Warner Bros. Entm’t, Inc. v. WTV Systems, Inc., 824 F. Supp. 2d 1003, 1111 n.7 (C.D. Cal. 2011). 73. 874 F. Supp. 2d 373 (S.D.N.Y. 2012). 74. The customer could also begin watching in real time, pause, repeat a portion if desired, and then continue. After a pause, the customer would be watching a recorded version that was made automatically



content owners sought a preliminary injunction, claiming that Aereo was publicly performing their copyright-protected television content.75 The district court, however, followed Cartoon Network to hold that plaintiffs were unlikely to succeed on their public performance claim76 because each transmission to a customer was derived from a copy that was individual to that customer and was never transmitted to anyone else.77

The Cartoon Network court explicitly recognized that neither Professor Nimmer nor the courts have offered a policy basis for his “same-copy, multiple-recipient” theory.78 The Second Circuit found such a policy basis in the observation that, if each unauthorized transmission must derive from a separate copy, the potential audience might be more limited, making it less likely that any single such transmission was “to the public.”79 Beyond the obvious objection that degrees of likelihood do not give clear answers to “yes/no” questions, Cartoon Network and its progeny show an unanticipated cost of this approach. Instead of the law adapting itself to meet the needs of society under conditions of new technology, these judicial interpretations push technology in odd directions as systems engineers seek to avoid falling on the wrong side of what is essentially an arbitrary line. Thus, in Cartoon Network, it takes no great imagination to envision Cablevision’s lawyers talking to the engineers and saying something like, “Isn’t it possible to design the system in such a way that each customer gets his own unique copy instead of streaming to each ordering customer from a single master copy?” In the early days of digital technology, when memory was costly, such designs may have been prohibitively expensive, but now that memory is cheap, they simply become technologically inefficient or inelegant. So, the engineers respond, “Well, it’s pretty stupid, but if the law says we must do it that way, sure, we can do it!” The Aereo case is similar. While I am no longer an engineer (and never was much of one), it seems unlikely that the designer of a broadcast-to-Internet system, free from the interference of legal rules, would design a system that required separate antennas for each customer, in addition to separate recording space (as in Cartoon Network). While it took an advance in antenna technology to achieve the miniaturization applied in Aereo, we must wonder whether the law, rather than technological considerations, is forcing technology away from the more obvious approach

even when the customer was using the “Watch” mode. Unless the customer affirmatively chose the “Record”’ mode, however, the recorded copy was not retained. Id. at 377. 75. Id. at 376. 76. Id. at 386. 77. Id. In a case involving similar technology, the Second Circuit has held that a broadcast-to-Internet service was not a “cable system” entitled to the statutory compulsory license for retransmitting television content. WPIX, Inc. v. IVI, Inc., 691 F.3d 275, 283 (2d Cir. 2012). 78. Cartoon Network LP v. CSC Holdings, Inc., 536 F.3d 121, 138 (2d Cir. 2008). 79. Id.



of capturing the signals with a single antenna and recording all of the content on a master.

We might also ask whether there is a policy basis for distinguishing the Zediva service from that offered by Cablevision and Aereo. Zediva buys content on disks; Cablevision buys (licenses) content from creators; and Aereo captures free broadcast content. In each case, the service streams that acquired content to individual customers upon their order. Viewed in this way, we again see the real policy issue, which is how best to divide the spoils from the new markets being created by digital technologies.80 The statutory definitions, in heavy reliance on the definition of “copy,” are leading to results that increasingly must be considered arbitrary.

VIII. MODIFYING SOFTWARE TO RUN ON OTHER HARDWARE

Apple, Inc. v. Psystar Corp.81 involves software copying that, at first glance, few would be prepared to defend. In this case, the defendant wanted to sell non-Apple computer hardware that would run the Mac OS X operating system. A piece of the Apple software, called the bootloader, would not operate unless it found a decryption key in the hardware, so the defendant placed a copy of OS X on an “imaging station” and replaced the original bootloader with one that would let the software run on non-Apple hardware. The imaging station software thus became the “master software” that was loaded onto the non-Apple computers that the defendant was selling. The defendant claimed that it was including a Mac OS X disk with each computer it sold—presumably in an effort to show that Apple did not lose any sales—but the court concluded that even if this were true it would not affect the copyright claims.82 The defendant also raised § 117 too late and in any event did not fully understand its applicability, so the judge refused to entertain the argument.83

The case looks like a slam dunk for Apple. We might want to think about this more carefully, however. Apple has a business model that seeks to limit the use of Mac software to Apple hardware. The issue is, how much, if at all, copyright law should assist Apple in implementing this business model.

80. See Malkan, supra note 66, at 551–52. 81. 673 F. Supp. 2d 931 (N.D. Cal. 2009). 82. Id. at 938. 83. The district court said that the assertion of § 117 on these facts was “frivolous.” Id. at 936. Properly argued, it would not be frivolous. Had each individual purchaser of defendant’s hardware purchased a copy of the Mac OS X on disk, § 117 would seem to give them the right to modify it so that it would run on their hardware. If the individual purchaser of the software has the right to modify it in this way, it is at least arguable that the purchaser also has the right to hire an expert who can actually do the necessary modifications. In essence, that seems to be what the defendant was doing here. The Ninth Circuit affirmed this decision against what was primarily a copyright-misuse challenge by holding that Psystar was not an “owner” under § 109 and Vernor v. Autodesk. Apple, Inc. v. Psystar, Corp., 658 F.3d 1150, 1155 (9th Cir. 2011). Presumably the Ninth Circuit would have concluded that Psystar was not an “owner” under § 117, either.



As a general matter, copyright protects against unauthorized activities that violate § 106, not business models. When the business model is selling hardcopy books that have been printed with authority, it makes sense to say that copying the books for competitive sale is infringing. But, assuming that a copy of Mac OS X was in fact purchased with each computer sold by the defendant in Psystar, Apple is getting all the sales of copies of the work that copyright is designed to protect. If books were sold with a hardware lock that could be opened only with a separately purchased key, supplying such a key—even though in violation of the bookseller’s intended business model—would not be copyright infringement.

Thus, if the Mac OS X software is available on disk for purchase84 by consumers, § 117 should allow those consumers to make such modifications as are necessary to use the software on the users’ hardware. As a corollary, most users will need the assistance of companies like Psystar in order to make the necessary modifications, and in the course of making these modifications efficiently, “copies” will necessarily be made. We must therefore consider the degree to which copyright, which is a statute designed to regulate the market for embodiments of protected works85—subject to important users’ rights like first sale and § 117—is properly manipulated either to reduce or eliminate those users’ rights due solely to the technological artifact requiring formal “copies” to be made before the protected works are actually usable by consumers. Put another way: would we be better off, if Microsoft were a hardware maker, if we allowed Microsoft to mandate that Windows could only be used on Microsoft hardware?

IX. CONCLUSION

The definition of “copy” in § 101 of the Copyright Act has served its original purpose of overturning the holding in White-Smith regarding piano rolls. Coming just prior to the appearance of computers in the daily lives of just about everybody, it does not sufficiently take into account the need to make copies whenever software and other digital representations of protected works are used. Courts tend to apply the definition as it is written, and it is difficult to ask them to do much more. Unfortunately, applying the definition as it is written leads to results that, from a policy perspective, are often arbitrary. As Professor Sag has recommended, fair use should be available in many cases, and in many cases fair use may get us to the correct policy result. 84. Of course, Apple and all other software suppliers in its position undoubtedly assert that the disks are not sold but only “licensed.” See supra notes 52-61 and accompanying text . We need not repeat the policy discussion here that mass-market transfers of copies of software for a fixed, one-time price and indefinite duration should be treated under federal copyright law as “sales” and not “licenses.” 85. See J.H. Reichman, Computer Programs as Applied Scientific Know-How: Implications of Copyright Protection for Commercialized University Research, 42 VAND. L. REV. 639, 685 (1989) (pointing out how application of the copyright model, designed to regulate the market for literary and artistic works, can restrain trade in the general markets for copyright-unprotected products).



Litigating a fair use defense is expensive, however, and to some extent remains a zero-sum game: Either plaintiff or defendant wins, neither of which may be the answer that would result from careful legislative deliberations. We must therefore begin to think of proxies other than “copies” for measuring the activities that are properly regulated by what we continue to call “copyright.”

Statutory revision is always a theoretical possibility, but even that would require us to decide the new wording or the new proxy for measuring infringement. Not only is it difficult to come up with a “one size fits all” approach, experience in the digital age teaches that, whatever we do, technology will change in the near future to pose new difficulties that we did not, and perhaps could not, foresee. In the absence of statutory change, we can ask the courts to apply the fair use defense more nimbly. Courts could be urged, for example, to find infringement by denying fair use but take to heart the suggestion of the U.S. Supreme Court in Campbell v. Acuff-Rose Music, Inc.86 and refuse to issue injunctions. Such an approach in the case of the Google Book Project, for example, would allow the Project to go forward but would supply financial benefits to copyright owners in the form of damages—a kind of judicially-created compulsory license. A similar approach is certainly conceivable in remote DVR cases like Cartoon Network. The doctrinal question is what standard a court should use in determining the amount of damages. The ultimate policy question is whether a court is the appropriate institution for making such fundamental social policy decisions. Until Congress acts, however, there may be little we can do. The scholarly community must be in position to make positive recommendations if and when Congress appears ready to take some action. In the meantime we must analyze at least those cases we know of in an effort to guide the courts in achieving optimal balances. Loud claims of “piracy” will get us nowhere. Even proof of “copying,” however, under the statutory definition, will only get us to the correct policy result some of the time, usually by chance.

86. 510 U.S. 569, 578 n.10 (1994).

“copying” and “piracy” in the digital age

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