July 2000
More than a year after enactment of the Digital Millennium Copyright Act (DMCA) two cases have been decided under the Act's anti-circumvention provisions. The DMCA, discussed in previous columns[1] was signed into law on October 28, 1998 and was effectively immediately. Both of the new cases have implications for libraries including those in the for-profit sector.
Kelly v. Arriba Soft Corp.[2] was decided in December, 1999. It held that the display of "thumbnail images" in a visual search engine was fair use and did not violate the DMCA. The plaintiff, Kelly, is a photographer who maintained two websites that contained some of his copyrighted photographs. The websites were used primarily to promote Kelly's book and his business of hosting corporate retreats. The defendant, now Ditto but formerly known as Arriba Soft, operated a visual search engine. When the search engine was used to search for various images it returned the results as thumbnail images as opposed to text files. A user of the search engine then could click on the thumbnail image and see a full size version of the image along with information such as a description of the size of the image and an address for the originating website. Ditto placed about 35 of the plaintiff Kelly's images in its database. Kelly sued for copyright infringement and violation of the anti-circumvention provisions of the DMCA.
The court applied the four fair use factors to reach its conclusion. The first factor, purpose and character of the use, focuses on whether the use is commercial or educational. Here, the court found that the use was commercial in that Ditto operates a commercial website, but there was no special exploitation of the images. Instead, the images reproduced as thumbnail images were a result of the search engine's indiscriminate way of gathering images. The court held that the use thus was less exploitative of copyrighted works than one normally sees in commercial use infringement cases. Most significantly, the transformative nature of Kelly's images favored Ditto. In other words, according to the court, Ditto did not use the images in the way that Kelly intended the original images to be used. Those images were artistic works to be used for illustrative purposes. Ditto' search engine, however, was designed to "catalog and improve access to images on the Internet." Thus, the character of Ditto's use of the images was found to be functional and not aesthetic.
Fair use factor two, nature of the copyrighted work, weighs against a finding of fair use. Factual works have greater fair use rights than do creative works. Here, the photographs are creative works as opposed to factual. The third factor, amount and substantiality used, is also not in the defendant’s favor since Ditto's search engine reproduced the entire photograph, in other words, 100% of the work as opposed to a small portion. The fourth factor, effect on the potential market for or value of the work, favored the defendant Ditto despite Kelly's allegation that Ditto's use had harmed the market for his works because it permitted users to copy the photographs and use them witout permission. The court found that there was no evidence of harm to Kelly’s market. In fact, Kelly’s images were vulnerable to infringement because they were displayed on websites. So, factors one and four favored the defendant, while two and three favored the plaintiff. The court then balanced the factors and found that the first factor was the most important in this case and that defendant’s conduct was fair use. On the DMCA anti-circumvention claims, the court found that Section 1202 of the DMCA, which governs the integrity of copyright management information and its unlawful removal from copies, was inapplicable. Kelly claimed that the text surrounding the photographs contained the copyright notice, but the notice did not appear on the images themselves on his website. Thus, the defendant did not remove the copyright management information in contravention of the law. Further, the court held that users of defendant’s search engine were no more likely to infringe copyright than were other users of Kelly’s website. The defendant had no reasonable grounds to know that it would cause users to infringe copyright.
The second case, Universal Studios v. Reimerdes[3] concerned the distribution of software that defeats the copy protection scheme on digital versatile disks (DVDs). The software had been available on various Internet websites. Universal and seven other major motion picture studios sought a preliminary injunction to require the removal of the software from the Internet, and the judge ageed. DVDs utilize a technological protection device called the Content Scramble System (CSS) which is an encryption scheme that allows a proper DVD player to play but not copy the digitized motion picture or other images on DVD disk. Development of CSS accounts for the tremendous growth of DVDs which were first introduced in the United States in 1996. By the time of the case, over 4000 motion pictures had been released in DVD format at the rate of 40 per month.
In late 1999 a group of “hackers” hacked CSS and began to offer over the Internet, DeCss, a software utility that enables users to break the CSS copy protection system, decrypt the copyrighted motion picture on DVD without authority of the copyright holder and make unauthorized copies.
Plaintiffs sued under Section 1201(a)(2) of the DMCA which prohibits among other things the unauthorized offering of products that circumvent technological protections that copyright holders use to control access to copyrighted works. Defendant Reimerdes argued that if the DeCss software fell within the type of device prohibited under the DMCA, various exemptions applied. The court found that DVD was covered by the statute, and no exemptions applied. For example, neither the reverse engineering exception nor the encryption research exception was found to apply. Nor was defendant’s conduct “security testing” under the DMCA.
Defendant also claimed fair use. The court held that there is no fair use in the DMCA; if there was such, then Congress would have said so. (This particular statement is likely to generate a great deal of controversy). Nor, according to the court, is there any First Amendment objection to dissemination. Defendant claimed that DeCss is speech protected by the First Amendment, but the court said it was far from clear that this was protected speech at all. In granting the preliminary injunction, the court stated that the DMCA is a tool to protect copyright in the digital age, and without limits on software and other devices such as DeCSS, the protections provided by the DMCA would be meaningless.