Sysop Liability for Copyright Infringement (Sysop Beware) from cudigest

[David Farber <farber () central cis upenn edu>]

Date: Thu, 8 Jul 1994 22:50:18 PDT
From: George, Donaldson & Ford <gdf () well sf ca us>
Subject: File 1--Sysop Liability for Copyright Infringement (Sysop Beware)


Source: LEGAL BYTES, Spring 1994, Volume 2, Number 1
                            gdf () well sf ca us
                   ___________________________________


           Copyright (c) 1994 George, Donaldson & Ford, L.L.P.
              (Permission is granted freely to redistribute
            this newsletter in its entirety electronically.)


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1.  BBS SYSOP LIABILITY FOR COPYRIGHT INFRINGEMENT:
    LET THE OPERATOR BEWARE!


     Two recent court decisions should remind electronic bulletin
board ("BBS") system operators that, despite popular theories and
arguments, current statutory and common law is being applied to
BBSs without much attention to the unique nature of the
communications technology.  These legal actions are challenging the
notion that BBSs can be unregulated virtual swap meets or
unsupervised shopping malls, where the sysop can provide a place
for the swapping of computer files and information, without tending
to the content or pedigree of the files available on the board.


     1.  PLAYBOY ENTERPRISES, INC. v. FRENA.


     In December, 1993, a federal trial court in Florida decided an
important copyright case involving a typical situation faced by
many BBS sysops:  the unauthorized uploading of copyrighted files
by users.  The case imposes a high standard of liability on sysops,
and should be a reminder that sysops need to pay attention to
*actual* court decisions, not just the latest legal theories
bandied about the Net.


     George Frena is the sysop of a BBS in Florida called "Techs
Warehouse."   His BBS carries, among other things, adult material.
At the time of the court decision, Frena provided free access to
users who purchased products from him, and charged $25 a month to
those who did not.  Frena allowed subscribers to upload whatever
they wanted onto his BBS, and uploads were apparently immediately
available for downloading.


     According to the opinion, Techs Warehouse contained among its
files 170 copyrighted PLAYBOY and PLAYGIRL pictures.  Frena
conceded that these pictures were on his BBS, and that he did not
have authority from Playboy Enterprises, Inc. ("PEI"), to
distribute the pictures.  The pictures' file descriptions included
the registered trademarks PLAYBOY and PLAYMATE.  PEI's text had
been removed from these pictures, and Frena's name, "Techs
Warehouse BBS," and the BBS's phone number had been added.


     According to Frena, he did not post or alter the pictures; the
files were all modified and uploaded by users.  After PEI sued him,
Frena removed the offending files and now monitors his BBS to
assure that no more PLAYBOY pictures are uploaded.


     In a simple one-two analysis of "ownership" and "copying", the
Court held that Frena violated PEI's copyrights.


     The Court first held that PEI owned the copyrights in the
pictures, which was not disputed.  The Court then decided that
Frena had "copied" these pictures, despite his claim not to have
posted the pictures on the BBS himself.  The Court *inferred* that
Frena had copied because (a) Frena had access to the original
pictures, because *PLAYBOY* is a widely circulated magazine; (b)
the computer file images were "substantially similar" to the
copyrighted PLAYBOY pictures; and (c) the copyright owner's "public
distribution" and "display" rights were infringed by having the
image files available on the BBS.


     The two arguments a typical sysop might think persuasive in
this situation were rejected.


     First, even if Frena himself did not copy the pictures, the
Court said that was irrelevant.  The mere presence of the images on
his BBS was enough:


     There is no dispute that Defendant Frena supplied a product
     containing unauthorized copies of a copyrighted work.  It does
     not matter that Defendant Frena claims he did not make the
     copies himself.


     Second, even if Frena did not *intend* to violate PEI's
copyrights, the Court held this too was irrelevant:


     It does not matter that Defendant Frena may have been unaware
     of the copyright infringement.  Intent to infringe is not
     needed to find copyright infringement. ... [E]ven an innocent
     infringer is liable for infringement ... .


Innocent intent only matters when it comes to damages, not
liability.


     Along with copyright infringement, the Court also held that
Frena was liable for trademark infringement, because the offending
files contained the PLAYBOY and PLAYMATE registered trademarks.
Again, Frena's claim that he did not himself put these words on the
images nor post the images was held to be irrelevant.  As a final
reproof, the Court held that the trademark infringement also made
Frena liable for "unfair competition" against PEI.  The Court left
the question of damages for a later hearing.


     The procedural posture of the FRENA decision makes this an
especially important precedent:  the Court was required to believe
Frena's claims, but found him liable anyway.


     The Court in FRENA has essentially put the burden on BBS
sysops (at least those that charge money for access) of reviewing
all files on their boards for possible copyright and trademark
infringements.  Regardless of the sysops' good faith or efforts to
remove infringing files, the sysop will be liable for copyright
trademark infringement for those files that escape detection.


     Several aspects of the FRENA decision are open to question and
the opinion certainly will not be the last word, especially when a
case is decided by a court more attuned to the technology involved.


     The FRENA court was certainly correct that a person need not
intend to infringe, or know he is infringing, to be liable for
copyright infringement.  In that sense, it is a "strict liability"
tort.  When applied to computer files actually uploaded by the
sysop, this principle is no less fair than when it is applied to
non-electronic publishers like newspapers and magazines.


     However, one can wonder about the Court's unquestioning
application of this principle to files uploaded by users.  Are a
BBS's file directories similar to paper publications, as the Court
assumed without discussing the question, or are they more like a
swap meet or shopping mall where the sysop provides the space, and
the users provide the goods?  Holding a sysop strictly liable for
the legal pedigree of every file on the BBS significantly limits
the core innovation of BBSs -- free two-directional file transfer.


     A newspaper publisher cannot claim not to know what is in the
newspaper; the publisher makes the decision what to include and
what to leave out.  The sysop does not necessarily do this, or know
what is on the BBS at any given time.  Given the ability to upload
and download files without the sysop's knowledge, is it proper to
hold the sysop strictly liable for the presence of infringing
files?  If it is, is it also correct, as the FRENA court did, to
automatically infer the additional element of copyright
infringement -- "copying"?  Is simply providing the *means* to swap
copyrighted files enough to make a sysop liable for illegal
"copying"?  Should there be some requirement that the sysop at
least *know* that copyrighted files are being posted and downloaded
by users, and made no attempt, or only inadequate attempts, to
prevent such activity before a Court finds that he copied the
files?


     The Court in FRENA imposed liability regardless of the sysop's
knowledge of what users were doing on his board.  Would the Court
have reached the same conclusion so easily if Frena had been the
owner of a shopping mall leasing space to a tenant who was (without
his knowledge) selling Metallica T-shirt rip-offs?


     The Court also appeared to misunderstand the nature of a BBS
when it held that the availability of the image files violated the
"display" right aspect of a copyright.  The Court apparently
believed the images were actually *displayed* to the user, a
capability that is only offered by some large commercial BBSs, and
is limited by the user's communication software.  Of course, the
"public distribution" aspect of a copyright can still be violated
by the distribution of a computer file containing an image, and so
this error has no meaningful effect on the decision.


     Finally, toward the end of its opinion, the Court seemed to
lose track of Frena's claim that he did not upload the images,
erase PEI's text, or add the BBSs' name and phone number himself --
a claim the Court legally had to accept at that stage in the
proceedings.  It is not clear whether Frena unequivocally stated
that he did not know the PLAYBOY pictures were on his BBS before he
was sued.   However, the Court went a step further, stating that
Frena himself deleted PEI's text from the PLAYBOY pictures,
"add[ed] his own text" and "appropriat[ed] PEI's photographs
without attribution," even though Frena denied having done so.  The
Court's assumption of disputed facts in PEI's favor, while
questionable, might actually limit the impact of the opinion as
precedent, because if Frena *had*, in fact, done those things
himself there would be little question of his liability.


     These problems with the FRENA opinion demonstrate that the
courts continue to struggle to understand computer communication
technology.  The natural tendency of the law is to make square pegs
fit round holes until someone persuasively explains the difference.


For example, judging from the Court's opinion, Frena's lawyers
spent substantial energy making an obviously weak, losing defense
that making copyrighted PLAYBOY pictures available for download on
a commercial BBS was a "fair use" of those pictures exempt from
copyright law.  The effort would better have been spent explaining
the unique nature of BBSs to the judge, and the unique problems
facing sysops in patrolling for copyright infringement.


     PLAYBOY ENTERPRISES, INC. v. FRENA can be found at 22 Media
Law Reporter 1301 (M.D. Fla. Dec. 9, 1993).