Fair Use

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

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

Copyright is distinct from other forms of creator protection such as Patents, which give inventors exclusive rights over use of their inventions, and Trademarks, which are legally protected words or symbols or certain other distinguishing features that represent products or services. Similarly, whereas a patent protects the application of an idea, and a trademark protects a device that indicates the provider of particular services or goods, copyright protects the expression of an idea. Whereas the operative notion in patents is novelty, so that a patent represents some invention that is new and has never been made before, the basic concept behind copyright is originality, so that a copyright represents something that has originated from a particular author and not from another. Copyrights, patents, and trademarks are all examples of what is known in the law as Intellectual Property.

As the media on which artistic and intellectual works are recorded have changed with time, copyright protection has been extended from the printing of text to many other means of recording original expressions. Besides books, stories, periodicals, poems, and other printed literary works, copyright may protect computer programs; musical compositions; song lyrics; dramas; dramatico-musical compositions; pictorial, graphic, and sculptural works; architectural works; written directions for pantomimes and choreographic works; motion pictures and other audiovisual works; and sound recordings.

History of Copyright Law

U.S. copyright law grew out of English Common Law and statutory law. When the printing press was developed in the fifteenth century, rights for the reproduction of written works extended to printers rather than to authors. In England, a printers' guild, the Stationers' Company, claimed for itself the exclusive right—in effect, a monopoly—on written works. It was not until 1710 that Parliament passed a statute relating to copyright. That law, called the Statute of Anne, established authors' rights to control the reproduction of their work after it was published. It also created a term of protection of 28 years from the date of publication. After that time, an author's work entered the public domain, meaning that anyone could print or distribute it without obtaining the author's permission or paying a royalty, or fee, to the author. Other European countries developed similar laws in the late eighteenth and early nineteenth centuries.

Under the British system, the author retained a common-law right to ownership of his or her work until publication. After publication, copyright was established as a statutory right, protected by the Statute of Anne. U.S. copyright law retained this distinction between prepublication common-law rights and post-publication statutory rights, until 1976.

By the late eighteenth century, the protection of intellectual property as a means of advancing the public interest was considered important enough to receive mention in the U.S. Constitution. The Patent and Copyright Clause—Article I, Section 8, Clause 8—of the U.S. Constitution empowers Congress "To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." Congress passed its first copyright statute in 1790—and has substantially revised copyright law four times, in 1831, 1870, 1909, and 1976.

Revisions in the copyright law have been driven largely by commercially significant changes in technology. In 1802, for example, graphic prints came under copyright protection, establishing the notion that the Constitution's language regarding copyright not be interpreted to apply literally to "Writings" alone. In 1831, musical compositions were incorporated into copyright protection, and in 1870, paintings, statues, and other works of fine art were placed under copyright protection.

The distinction between common-law protection for unpublished works and statutory protection of published works received increasing criticism in the twentieth century, particularly as the notion of publication changed greatly with technological innovations in communication. Congress removed this distinction in the landmark Copyright Act of 1976 (17 U.S.C.A. § 102(a)). According to this statute, an author receives copyright protection as soon as a work is recorded in a concrete way—when, for example, it is written on a piece of paper, recorded on an audiotape, or stored on a computer disk. Any unauthorized copying of the work is subject to an infringement suit and criminal charges. The 1976 act also allows copyright protection of works that derive from the original, such as motion pictures, CD-ROM multimedia editions, and other adaptations. These subsequent creations are known as derivative works.

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

Copyright cases typically involve disputes between competing private interests: an author against someone who has copied the author's work without permission. However, the outcome of such cases often has significant repercussions for the general public as well. One such case with significant public effect was Basic Books v. Kinko's Graphics Corp., 758 F. Supp. 1522 (S.D.N.Y. 1991), which dealt with the question of whether photocopy stores may sell copied excerpts of books to college students without authorization from the books' publishers. The decision in the case ultimately affected the price that the public must pay for access to copyrighted information.

Many college and university students purchase photocopied materials from copy stores in association with courses they are taking. Usually consisting of chapters or sections taken from different books or journals, these photocopied materials enable students to read from a wide variety of sources without having to purchase a large number of books. By the late 1980s, book publishers realized they were losing sales owing to such photocopying. As a result, several publishers, including Basic Books, Inc., filed a lawsuit in federal court against one of the largest photocopy firms in the United States—Kinko's Graphics Corporation, a company that in 1989 had more than two hundred locations and annual sales of $54 million.

At issue in the case was the question of who may profit from the reproduction of an author's work, particularly with regard to the practice that Kinko's called anthologizing, which is the copying of book excerpts into course "packets" sold to college students. The publishers, the plaintiffs in the case, maintained that Kinko's violated the Copyright Act of 1976 (17 U.S.C.A. § 101 et seq.), by failing to secure permission to reprint the excerpts included in course packets and, in turn, pay the necessary fees involved, part of which would be passed on to the authors of the books. Kinko's claimed that its sale of the excerpts was an example of the kind of fair use that is allowed by the Copyright Act.

Citing the commercial interests involved—namely, the fact that Kinko's made a significant amount of money from the sale of course packets, and that packet sales competed with book sales—the court found that Kinko's was guilty of copyright infringement. It ordered the company to pay $500,000 in damages to the publishers and issued an order forbidding it to prepare anthologies without securing permission from and prepaying fees to the appropriate publishers.

Basic Books was a victory for the publishers and authors of books that are excerpted for course anthologies. As for Kinko's, it now has to pay fees to publishers, but it is able to pass on those costs to customers in the form of higher prices. Does this mean that students are the losers in this case? In the short run, yes, because they will pay more for their course materials. But in the long run, students and the rest of society may derive more benefit, even if it is indirect, from a system that rewards authors for their intellectual labor.

Many features of the 1976 act make U.S. copyright law conform more to international copyright standards, particularly with regard to the duration of copyright protection and to the formalities of copyright deposit, registration, and notice. These changes have been greatly influenced by the most important international copyright treaty, the Berne Convention for the Protection of Literary and Artistic Works (828 U.N.T.S. 221, S. Treaty Doc. No. 99-27). In 1988, the United States passed the Berne Convention Implementation Act (102 Stat. 2853), which made the nation an official member of the treaty as of 1989. Section 2(a) of this act holds that provisions of the treaty are not legally binding in the United States without domestic legislation that specifically implements them.U.S. copyright law has continued to evolve toward greater conformity with international copyright standards. In the 1990s, for example, the Berne Convention added 20 years to the minimum standard for copyright duration, changing it to the length of the author's life plus 70 years. U.S. copyright law followed suit in 1998, with the passage of the Sonny Bono Copyright Term Extension Act.

Copyrightable Works

The 1976 Copyright Act provides that copyright protection "subsists … in original works of authorship fixed in any tangible medium of expression, now known or later developed" (17 U.S.C.A. § 102(a)). Thus, virtually any form of fixed recording is protected, no matter how new the technology.

Originality is the most important quality needed by a work in order for it to receive copyright protection. Originality is not dependent on the work's meeting any standard of aesthetic or artistic quality. Thus, a work need not be fine art to be copyrightable.

Works That Are Not Copyrightable

Copyright protects the expression of an idea or vision, not the idea itself. In legal terminology, this concept is called the idea-expression dichotomy, and it has been an important feature of legal reasoning related to copyright. Ideas, procedures, processes, systems, methods of operation, concepts, principles, and discoveries are not within the scope of copyright protection. Other works that are not copyrightable are words and short phrases, including slogans; blank forms for recording information (such as bank checks); and works containing no original authorship (such as standard calendars or simple phone listings).

Some works are not copyrightable because they are not fixed in a tangible medium. These include unrecorded dance choreography, and unrecorded speeches, lectures, and other vocal performances. Although typefaces are tangible, they traditionally have been regarded as lying outside of copyright protection. A dramatic character is not copyrightable.

Holders of a Copyright

A copyright is initially owned by the author or authors of the work, except in the case of a "work for hire." A work for hire can arise in two situations: (1) where an employee creates a work within the scope of his or her employment, in which case the employer owns the copyright to the work upon its creation; (2) where two parties enter a written agreement designating the creation as a work for hire and the work falls within one of nine specific categories of work designated by copyright law. If the work does not fit one of the specified categories, it will not be a work for hire even if the parties have called it one. In such a case, the author or authors retain the copyright, and transfer must be accomplished through a written assignment of copyright. Where there is a valid work for hire, the employer who owns the copyright has the same rights as any copyright holder, including the right to initiate an action for copyright infringement.

The ownership of a copyright, or the ownership of any of the five exclusive rights afforded by a copyright (discussed later in this article), can be transferred to another and is regarded as Personal Property upon the death of the copyright holder. Copyright ownership and ownership of the material object in which the copyrighted work is embodied are two entirely separate legal entities. Furthermore, transfer of an object and transfer of the copyright to that object are separate, independent transactions, neither of which, by itself, has any effect on the other. Therefore, transfer of a material object, such as an original manuscript, photograph negative, or master tape recording, does not transfer the copyright to that work. Likewise, transfer of the copyright to a work does not require transfer of the original copy of the work.

Exclusive Rights

Copyright affords an author a number of exclusive rights: (1) the exclusive right to reproduce, or copy, the work; (2) the exclusive right to prepare new works that derive from the copyrighted work; (3) the exclusive right to distribute the work to the public by sale or other arrangement; (4) the exclusive right to perform the work publicly; and (5) the exclusive right to display the work publicly. The first two rights, involving reproduction and derivation, are infringed whether violated in public or in private, or whether violated for profit or not. The last three rights are infringed only when violated publicly, that is, before a "substantial number of persons" outside of family and friends (17 U.S.C.A. § 101).

All of the exclusive rights afforded by copyright may have significant economic value. For example, derivative works, which may include translations, dramatizations, films, recordings, and abridgments, can offer substantial rewards to the author. An author may sell, license, or transfer one or all of the exclusive rights.

Duration of Ownership

Under the original provisions of the Copyright Act of 1976, copyright protection of an authored work extended through the life of the author and to fifty years after the author's death. However, in a major piece of legislation, Congress extended copyright terms in 1998 in the Sonny Bono Copyright Term Extension Act, Pub. L. No. 105-298, 112 Stat. 2827 (17 U.S.C.A. §§ 101 et seq.). Title I defines the terms of the copyright extension, while Title II provides a "music licensing exemption for food service or drinking establishments." This portion of the law is also known as the Fairness in Music Licensing Act of 1998.

The duration of copyright law under the 1998 act was extended for all copyrighted materials. Works created on January 1, 1978, or after are protected from the time the work was "fixed in a tangible medium of expression." The term is for life of the creator plus 70 years. If the creator is a corporation, then the term is 95 years from publication or 120 years from the date of creation, whichever is shorter.

Works published between 1923 and 1963 are protected, if they were published with notice, for 28 years and can be renewed for 67 years. If not renewed, they will fall into the public domain. Materials that were published during this period without notice entered the public domain upon publication.

Items published between 1964 and 1977 are protected if they were published with notice. They are protected for 28 years, and the copyright has been automatically extended for 67 years. Works created before January 1, 1978, but not published, are protected for the life of the creator plus 70 years or until December 31, 2002, whichever is later. Materials created before January 1, 1978, but published between then and December 31, 2002, are protected for the life of the creator plus 70 years or until December 31, 2002, whichever is later.

Libraries, archives, museums, and scholars expressed concerns about the 20-year extension. Items created in 1923 would have passed into the public domain on January 1, 1999, if the law had not been changed. At the beginning of 2000, works created in 1924 would have fallen under the public domain. The act's opponents argued that original scholarly research would be hampered by the extension.

In answer to those concerns, a special clause was included in the Copyright Term Extension Act for libraries, archives, and nonprofit educational institutions. Such institutions are permitted to "reproduce, distribute, display, or perform in facsimile or digital form" a copy of any copyrighted, published work during the last 20 years of its term "for purposes of preservation, scholarship, or research." However, the work must not be used in such a manner if it "can be obtained at a reasonable price."

The changes in the duration of copyrights were made partly to keep pace with the evolution of European copyright laws. In 1995, Europe extended its copyright protection to life of the creator plus 70 years, but in the United States it remained the life of the creator plus 50 years.

Copyright Infringement

Copyright infringement involves any violation of the exclusive rights of the copyright owner. It may be unintentional or intentional. When unintentional, it is called innocent infringement. An example of innocent infringement occurred when former Beatle George Harrison created his song "My Sweet Lord." Harrison was found to have unconsciously copied the tune of another song, "He's So Fine," by the Chiffons, and thus was liable for infringement (Bright Tunes Music Corp. v. Harrisongs Music, 420 F. Supp. 177 [S.D.N.Y. 1976]). Vicarious or related infringement refers to those who profit indirectly from the infringement of copyright, as in the case of a theater owner who profits from booking a band that illegally performs copyrighted works.

Since evidence of direct copying or Plagiarism of an authored work is difficult to obtain, infringement of copyright is usually established through Circumstantial Evidence. Such evidence typically must show a substantial similarity between the original and the copy, as well as prove that the copier had access to the original. This means that where two works are similar or identical, there is nevertheless no infringement if each work was produced through the original and independent work of its creator. An infringer is not relieved of liability by crediting the source or the creator of the infringed work. Although infringement does not require that even a large portion of the work be similar, it does require that a substantial part be similar. It is irrelevant if the copied work is an improvement of the original work.

The Copyright Act of 1976 recognizes a copyright not only in a publisher's collective work, but also a separate copyright for each author's contribution to the work. With the growth in the use of electronic databases and disk to store data, some freelance authors began to object to their articles being sold to companies that produced these databases and disks. The Supreme Court, in New York Times v. Tasini, 533 U.S. 483, 121 S. Ct. 2381, 150 L. Ed. 2d 500 (2001), held that the Act protects the copyrights of the writers, rejecting an argument by the publishers that the conversion of the original works to an electronic format constituted a "revision" of the collective work, which would have been permissible under the Copyright Act.

Remedies for Infringement

Because the owner loses the value of a copyright when infringement occurs, relief is often sought through filing a lawsuit in federal court. If infringement is established, the court can grant preliminary and permanent injunctions, or court orders that restrain the offending party from continuing to infringe the copyright. A court may also award monetary damages as a remedy for copyright infringement. The copyright owner can recover for actual financial losses and any additional profits that the infringer earned from the infringement.

The copyright owner may instead choose to receive statutory damages, which range from a minimum of $250 to a maximum of $10,000. The court may adjust these limits based on the innocence or willfulness of the infringer. Innocent infringers may prove their Good Faith and may have damages reduced to as little as $100, whereas willful infringers may be punished by the court with damages as high as $50,000. Courts may also impound and even destroy illicit reproductions of copyrighted works.

Willful copyright infringement can be a federal misdemeanor, punishable by as much as $10,000 or one year's imprisonment. Criminal prosecutions on this basis require that infringement be for the "purposes of commercial advantage or private financial gain"(17 U.S.C.A. § 506(a)). Criminal prosecutions for copyright infringement are generally rare. Nevertheless, Piracy of music and motion picture recordings—in which criminals mass-produce such recordings without permission and without paying royalties—has become increasingly common. This fact led to the passage of the Piracy and Counterfeiting Amendments Act of 1982 (18 U.S.C.A. § 2318), which allows punishment of up to $250,000 in fines or five years in prison for pirating 1,000 phonorecords or 65 films within 180 days. The fraudulent use or removal of copyright notices is also a punishable offense.

Fair Use

Fair use is a judicial doctrine that refers to a use of copyrighted material that does not infringe or violate the exclusive rights of the copyright holder. Fair use is an important and well established limitation on the exclusive right of copyright owners. Examples of fair use include the making of braille copies or audio recordings of books for use by blind people, and the making of video recordings of broadcast television programs or films by individuals for certain private, noncommercial use.

Examples of fair use typically involve, according to the Copyright Act of 1976, the reproduction of authored works for the purpose of "criticism, comment, news reporting, teaching …, scholarship, or research" (17 U.S.C.A. § 107). The same act also establishes a four-part test to determine fair use according to the following factors: (1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for, or value of, the copyrighted work (17 U.S.C.A. § 107).

It is usually considered fair use of an authored work to take small quotations or excerpts and to include them in another work, as when quotations are taken from a book and inserted into a book review. However, courts have found that such quotation is not fair use when material is taken from unpublished sources, as happened in the 1985 case Harper & Row v. Nation Enterprises, 471 U.S. 539, 105 S. Ct. 2218, 85 L. Ed. 2d 588.

The Harper case involved publication by The Nation magazine of quotations from Gerald R. Ford's unpublished memoir, A Time to Heal. Harper & Row, publisher of the memoir, sued The Nation, claiming that the magazine's actions had caused it to lose a lucrative contract with Time Magazine to publish excerpts from the memoir. The Court ruled in favor of Harper, citing the economic value of first publication to the copyright holder as an important factor in its decision. It found that The Nation had infringed Ford's copyright by becoming the first publisher of his original expression, thereby inflicting economic losses on Ford. It rejected The Nation's argument that it was simply reporting news. Lower courts have subsequently applied the Court's reasoning to other cases involving quotations from unpublished works. In Salinger v. Random House, 811 F.2d 90 (2d Cir. 1987), a federal appeals court blocked publication of a book that used extensive quotations from unpublished letters of the author J. D. Salinger. The court ruled that the author retained copyright ownership of the "expressive content" of the letters, even when the letters themselves were deposited in university library collections.

Parody often constitutes fair use of copyrighted material. In cases involving parodies of copyrighted works, courts typically assess the purpose and intent involved in taking material from the original expression, and whether or not the author of the parody has borrowed a reasonable amount of material in producing the parody. For example, in the 1994 case of Campbell v. Acuff-Rose Music, 501 U.S. 569, 114 S. Ct. 1164, 127 L. Ed. 2d 500—which involved a parody by the rap group 2 Live Crew of the Roy Orbison song "Pretty Woman"—the U.S. Supreme Court ruled that a parody could be fair use under copyright law even if it is created for commercial purposes.

Copyright Registration, Deposit, and Notice

Registration of copyright involves recording the existence of an authored work and the identity of its author with the U.S. Copyright Office, which is a part of the Library of Congress. Deposit involves placing the work in its recorded, physical form with the same office. Notice, or notification, involves placing on an authored work the © or the word Copyright or the abbreviation Copr., along with the year of first publication and the name of the owner of the copyright.

Many of the major copyright acts in U.S. history have required that works be registered and deposited with a U.S. district court or with the U.S. Copyright Office, in order to be legally enforceable. Over time, however, deposit, registration, and notice of copyright have increasingly become formalities. Under the Copyright Act of 1976, authors automatically receive federal copyright protection when they fix their work in a tangible medium. Even if a copyright is not registered and an authored work is not deposited, the author maintains exclusive rights to the work.

Nevertheless, registration and deposit may have significant legal consequences. Most importantly, owners of copyright cannot sue for copyright infringement until they have registered the copyright (17 U.S.C.A. § § 411, 412). Deposit is not a requirement for copyright protection, but federal law requires that two copies of a published work be deposited within three months of publication. Failure to deposit a copy after it has been demanded by the U.S. Copyright Office is an offense punishable by a fine. Registration of copyright requires the deposit of at least one copy of a work and two copies of a published work. The U.S. Copyright Office has the power to vary these requirements.

Copyright notice serves a number of functions. A lack of copyright notice has traditionally informed users that a particular work is in the public domain, whereas the presence of a notice has warned users that a work is copyrighted and identifies the date and year of the work. Despite these traditions, copyright notice is optional for works distributed after October 31, 1988. Under prior law, an omission of copyright notice resulted in a loss of copyright protection.

Digital Millennium Copyright Act

Copyright laws have had to evolve in order to protect the interests of owners of copyrights from infringement through transfer of digital copies of protected works. Internet users may employ a myriad of methods to transmit digital files, and much of the information contained in these files consists of copyrighted works. Given the sheer number of Internet users—estimated by some at more than 500 million in 2002—and trillions of pages on the World Wide Web, protection of electronic publications and media is a global concern.

In 1998, then-President William Jefferson Clinton signed the Digital Millennium Copyright Act (DMCA), Pub. L. No. 105-304, 112 Stat. 2860 (17 U.S.C.A. §§ 101 et seq.) into law following a 99-0 vote in the U.S. Senate. This legislation was the focus of intense Lobbying efforts on the part of a wide range of interest groups. These groups included Telecommunications companies and online service providers; consumer-electronics manufacturers, library, museum, and university groups; and the publishing, recording, film, and software industries. The primary goal of this legislation was to adapt U.S. copyright laws for the digital age.

Passage of the DMCA was also required for the United States to keep pace with changes in international copyright treaties. In December 1996, the World Intellectual Property Organization (WIPO), an agency of the United Nations, negotiated the Copyright Treaty and the Performances and Phonograms Treaty at a meeting in Geneva, Switzerland. WIPO is responsible for the advancement and safeguarding of intellectual property throughout the world, and it has 170 member countries.

The treaties, ratified in 2002, provide increased protection for copyrighted materials in the digital world. By signing, each country agrees to put into place laws, based on their own legal system, in order to enforce the treaties. The DMCA serves that purpose for the United States.

The DMCA consists of five main sections: WIPO Treaties Implementation, Online Copyright Infringement Liability Limitation, Computer Maintenance or Repair Copyright Exemption, Miscellaneous Provisions, and Protection of Certain Original Designs. Title I, WIPO Treaties Implementation, contains an "anti-circumvention" provision, making it illegal to "manufacture, import, offer to the public, provide, or otherwise traffic any technology, product, service, device, component, or part thereof," for the primary purpose of "circumventing a technological measure that effectively controls access to" a copyrighted work. Thus, technologies that are designed to protect digital material are safeguarded.

Moreover, this provision makes the act of circumventing a "technological measure that effectively controls access to a work protected" by copyright illegal. Every three years, the librarian of Congress, the register of copyrights, and the assistant secretary for communications and information of the Commerce Department must determine whether people with legitimate noninfringing uses of copyrighted materials are being unfavorably affected by the law. The law does state that fair use is not affected, but this nevertheless has been a controversial provision. Libraries, museums, and scholars were concerned about digital materials only being available on a pay-per-use basis. An exemption was included for nonprofit libraries, archives, and educational institutions allowing them to circumvent technical protection measures for the purpose of determining whether or not to purchase the copyrighted work.

Title I of the DMCA contains another addition to U.S. copyright law required by the WIPO treaties. This section prohibits the deletion or alteration of information associated with copyrighted material. Organizations will benefit from this provision because it will help protect information and images on their web sites. Furthermore, it prohibits the distribution of false copyright-management information. The DMCA provides for civil and criminal enforcement. However, archives, schools, nonprofit libraries, and public broadcasting stations are exempt from criminal prosecution.

The DCMA also limits the liability for copyright infringement by providing safe harbors for online service providers. The definition of an online service provider is generous. Other organizations may qualify for protection, which could be useful if they provide Internet access, have a company bulletin board or inhouse E-Mail system, or chat rooms. Prior to the passage of the DMCA, online service providers could have been liable if infringing materials were posted on their sites, even if they were unaware of the problem. The DMCA explains the responsibilities of copyright owners and service providers. Under specific conditions, online service providers are exempt from having to pay monetary damages as long as they are not benefiting financially from infringing activity and as long as they remove the material promptly from the Internet.

Limitations have also been set on exclusive rights for computer programs. A provision allows users to copy programs that are needed in order to maintain and repair a machine. Any such copies must be destroyed as soon as the machine is repaired, however.

One significant exemption for libraries and archives was included in Title IV of the DMCA. Up to three copies may be made of a copyrighted work without the permission of the copyright owner for research use in other libraries or archives through interlibrary loan. The word "facsimile" has been struck from the former copyright law, thus allowing for digital formats. Libraries and archives can now loan digital copies of works to other libraries and archives by electronic means. Copies for preservation and security purposes are also permitted when the existing format in which the material is stored becomes outdated, or if the work is lost, stolen, damaged, or deteriorating.

Title IV also established guidelines for licensing and royalties in regard to copyrighted music transmitted over the Internet and in other digital forms. Transmissions are not subject to licensing if transmitted with encoded copyright information and with permission from the copyright owner of the sound recording.

No Electronic Theft Act

The concerns surrounding the protection of the copyrights of electronic data extend to computer software. In 1997, Congress approved the No Electronic Theft (NET) Act, Pub. L. No. 105-147, 111 Stat. 2678, which substantially enhanced existing federal copyright law. Aimed primarily at the rampant theft of computer software, it allows the prosecution of anyone who violates the copyright of materials worth more than $1,000 in a six-month period by copying, distributing, or receiving software.

Congress passed the law in November 1997 after the software and entertainment industries strongly lobbied for it, claiming losses amounting to $2 billion in 1996 in the United States alone. In particular, the law closed a narrow loophole in existing federal law, which made criminal prosecution for copyright violation only possible if the violation resulted in financial gain. Under the NET Act, individuals face fines and jail sentences even if they do not profit financially from the violation. The law was enacted over protests by scientists who feared that it would hinder their research.

Lobbyists pointed to what became known as the "LaMaccia loophole." This term refers to an unforeseen weakness in federal law that was exposed by the failed federal prosecution of computer hacker David LaMacchia in 1994 (United States v. LaMacchia, 871 F. Supp. 535 [D. Mass. 1994]). LaMacchia, then a 21-year-old student at the Massachusetts Institute of Technology, had used an electronic bulletin board to freely distribute countless commercial software programs. Although he was indicted for wire Fraud under 18 U.S.C.A. § 1343 for allegedly causing software companies losses of more than $1 million, the case was dismissed. U.S. District Court Judge Richard Stearns ruled that criminal sanctions did not apply because LaMacchia had not profited from his actions.

According to the software industry, the decision paved the way for piracy of material through web pages and other commonly used Internet sites. Software manufacturers were not only concerned about deliberate piracy by computer hackers; they also wanted to stop the casual lending and copying of computer software between consumers and within offices as well. Joining them in this effort were the music and film industries, which have increasingly become partners of software companies in the production of multimedia CD-ROMs. Additionally, the music industry viewed with alarm the widespread distribution of commercial recordings by fans, which became popular over the Internet in 1997 with the development of new software technology for digitally copying songs.

The NET Act was designed to close the LaMacchia loophole. Swiftly passed by the House and subsequently approved by the Senate, the act accomplished this by amending two key parts of federal copyright law: Titles 17 and 18 of the United States Code. These laws previously defined copyright violation strictly in terms of financial gain. The NET Act broadened them to include the reproduction or distribution of one or more copies of copyrighted works and considers financial gain simply to be the possession of copyrighted work. It defines a misdemeanor violation as occurring when the value of the copied material exceeds $1,000 over a 180-day period; a felony occurs if the value exceeds $2,500. Penalties range from a one-year jail sentence and up to $100,000 in fines for first-time offenders, to five years' imprisonment, and up to $250,000 in fines for repeat offenders.

Further readings

Electronic Frontier Foundation. 1995. To Have and to Hold: Can Copyrights Extend to Cyberspace Without Increased Costs and Threats to Privacy? (June 8).

Goldstein, Paul. 2003. Copyright's Highway: From Gutenberg to the Celestial Jukebox. Rev. ed. Stanford, Calif.: Stanford Univ. Press.

Vaidhyanathan, Siva. 2001. Copyrights and Copywrongs: The Rise of Intellectual Property and How It Threatens Creativity. New York Univ. Press.


Copyright, International; Intellectual Property.

West's Encyclopedia of American Law, edition 2. Copyright 2008 The Gale Group, Inc. All rights reserved.

fair use

n. the noncompetitive right to use of copyrighted material without giving the author the right to compensation or to sue for infringement of copyright. With the growing use of copy machines, teachers and businesses copy articles, pages of texts, charts, and excerpts for classroom use, advice to employees, or assisting in research without violating the copyright. For example, Professor Elmer Smedley makes 100 copies of a photograph from Time magazine of starving Somalians to illustrate to his students the deprivations in Africa (which is fair use), but then Smedley publishes a book Africa on the Brink, and uses the photograph in a chapter on starvation (not fair use), and is responsible to the photographer for a royalty. (See: copyright)

Copyright © 1981-2005 by Gerald N. Hill and Kathleen T. Hill. All Right reserved.
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