PILLSBURY MADISON + SUTRO RANDOLF J. RICE #083712 BARBARA R. SHUFRO #128857 MELISSA A. BUR
PILLSBURY MADISON & SUTRO
RANDOLF J. RICE #083712
BARBARA R. SHUFRO #128857
MELISSA A. BURKE #171710
Ten Almaden Boulevard
San Jose, CA 95113-2226
Telephone: (408) 947-4000
Attorneys for Defendant
NETCOM ON-LINE COMMUNICATION SERVICES, INC.
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
____________________________________
No. C95-20091 RMW
RELIGIOUS TECHNOLOGY CENTER, a
California non-profit corporation;
and BRIDGE PUBLICATIONS, INC., a
California non-profit corporation,
Plaintiffs,
VS.
NETCOM ON-LINE COMMUNICATION Date: February 21, 1995
SERVICES, INC., a Delaware Time: 9:00 a.m..
corporation; DENNIS ERLICH, an Courtroom: 6
individual; and TOM KLEMESRUD, an Before the Honorable
individual, dba CLEARWOOD DATA Ronald Whyte
SERVICES,
Defendants.
____________________________________
MEMORANDUM OF POINTS AND AUTHORITIES OF DEFENDANT
NETCOM ON-LINE COMMUNICATION SERVICES, INC. IN
OPPOSITION TO PLAINTIFFS' REQUEST FOR INJUNCTIVE RELIEF
TABLE OF CONTENTS
Page
I. INTRODUCTION..................................... 1
II. BACKGROUND....................................... 1
III. ARGUMENT........................................ 4
A. Plaintiffs cannot demonstrate irreparable
harm..................................... 5
1. The threat of harm to plaintiffs has been
dissipated in light of the execution of the
Court's order of
seizure.............................. 5
2. In contrast, the threat of harm to NETCOM and the
public at large, if the injunctive relief is
granted, is extraordinary because it would
terminate the service of hundreds of individuals
against whom the plaintiffs allege no
wrong................................. 6
B. Plaintiffs cannot show a probability of success on the
merits.................................. 7
1. Plaintiffs are demanding an unprecedented
extension of copyright infringement liability to
passive transmitters of electronic information,
who have no control of the information third
parties convey over their lines..... 7
2. Courts have always deferred to Congress the issues
of copyright protection and technological
innovation........................ 8
3. There is no support in the law for plaintiffs,
request..................... 11
4. NETCOM cannot be held liable under the
contributory infringement doctrine because it
cannot exercise editorial control over the
messages transmitted on the
USENET.............................. 13
C. The Order plaintiffs request is completely unnecessary
to address their concerns .............. 14
D. An order against NETCOM would not prevent access to
these materials by other means...... 14
IV. CONCLUSION..................................... 15 TABLE OF AUTHORITIES
Page(s)
Cases
Fortnightly Corp. v. United Artists Television, Inc.,
392 U.S. 390 (1968)............................. 10
Los Angeles Memorial Coliseum v. National Football,
634 P.2d 1197 (9th Cir. 1980)................. 4
Oakland Tribune, Inc. v. Chronicle Pub. Co.,
762 F.2d 1374 (9th Cir. 1985)................ 4
Playboy Enterprises, Inc. v. Frena,
839 F. Supp. 1552 (M.D. Fla.
1993)........................................ 11
Religious Technology Center v. Wollersheim,
796 F.2d 1076 (9th Cir. 1986), cert. denied, 479 U.S. 1103
(1987)........................................ 14
Sega Enterprises Ltd. v. MAPHIA,
857 F. Supp. 679 (N.D. Cal. 1994) ............ 11
Sony Corp. v. Universal City Studios, Inc.,
464 U.S. 417 (1984)......................... 8, 9, 10,
passim
Teleprompter Corp. v. Columbia Broadcasting System, Inc.,
415 U.S. 394 (1974)............................. 10
Statutes and Codes
United States Code
Title 17, section 111............................ 10
Other Authorities
R.T. Nimmer, The Law of Computer Technology,
15.11B at S15-36 (2d ed. 1994)................. 12
Sarah B. Deutsch, "Superliability on the Superhighway?",
The Multimedia Law Report,
at 4-6 (November 1994)........................... 12
Defendant NETCOM ON-LINE COMMUNICATION SERVICES, INC.
("NETCOM") submits this memorandum of points and authorities in
opposition to plaintiffs, application for temporary restraining
order, order to show cause, and for order of impoundment.
I. INTRODUCTION.
Plaintiffs are seeking to obtain an order from this Court
which has never previously been granted by a court, or to
defendant NETCOM's knowledge, ever even requested of a court.
Plaintiffs are demanding an unprecedented extension of
infringement liability that, if recognized by this Court, would
impact each of the estimated 36 million users of the Internet.
Moreover, the granting of the requested relief against
NETCOM is wholly unnecessary since an order against defendant
Dennis Erlich, if the court finds a basis for that to be
established, will entirely address Plaintiffs, claims.
Further, there is no showing of irreparable harm, since the
allegedly offending materials have already been seized. No
extraordinary relief is necessary in order to prevent defendant
Erlich from posting documents no longer in his possession.
II. BACKGROUND.
The Internet is a worldwide, constantly changing, 7 network
of private and public computer networks. Declaration of Rick
Francis (hereinafter "Francis Decl."), at 3. The computers
communicate through a common computer language which is in the
public domain. Id. The Internet network is connected in a
variety of ways, including regular telephone lines, high speed
dedicated leased lines, and fiber optic links. Id. It is
estimated that the number of Internet users is approximately 36
million. Id. Millions of messages are transmitted on the
Internet daily. Id. at 12. Once connected to the Internet, users
can exchange messages, access forums for Internet users on
various topics, and access vast amounts of data including text,
graphics, video and audio information, anywhere in the world. Id.
at 3.
NETCOM is a provider of Internet connectivity services.
Francis Decl. at 7. NETCOM markets a computer software product
which permits access to the Internet. Id. It provides the
technological key for direct navigation of the Internet system.
Id. NETCOM does not maintain any database, bulletin board or any
content-based service for its subscribers, except as a means of
communicating to them or facilitating communications among them
about the NETCOM service. Id. at 11. NETCOM simply markets a
computer program and maintains a computer switch which allows its
subscribers to access the Internet themselves. Id.
Defendant Klemesrud is a NETCOM subscriber. Francis Decl.,
at 13. He in turn reportedly runs a "bulletin board service"
("BBS"), a computer network, to which approximately 500 people
subscribe. Through his BBS, Klemesrud allows his individual
subscribers to gain access to the Internet via the connection he
maintains with NETCOM. Defendant Dennis Erlich is apparently one
of Klemesrud's 500 reported subscribers. Erlich can 'dial-up"
Klemesrud's computer and cause messages to be generated by
Klemesrud's computer which are posted to any number of newsgroup
categories on the USENET. Newgroups are simply the name for
subject matter categories assigned by an Internet participant to
his or her posting. Any material posted to a USENET newsgroup
will eventually end up being transmitted to everyone on the
USENET system, no matter where the message is posted from.
NETCOM, along with tens of thousands of others, is a link
for USENET News, a world-wide distribution chain for local
postings on a BBS. Id. at 5. Klemesrud's BBS allows its
subscribers to access approximately 900 newsgroups through the
USENET system via NETCOM. Rice Decl., Exh. B. One of these
newsgroups is dedicated to the discussion of Scientology
("alt.religion.scientology"). It is on this newsgroup that
defendant Erlich has allegedly posted excerpts of plaintiffs,
copyrighted materials. Compl., 27.
The BBS can be accessed from any other computer on the
Internet through the USENET that has access to one of thousands
of USENET participants. Any material loaded onto the Internet
from any source connected to USENET will eventually end up on the
NETCOM system, whether or not it is generated by a NETCOM
subscriber and whether or not the subscriber is "cut-off" by
NETCOM. Rice Decl., Exh. A.
III. ARGUMENT.
Plaintiffs, as the party seeking the drastic remedy of
injunctive relief, bear the heavy burden of demonstrating either
(1) a combination of probable success on the merits and the
possibility of irreparable injury or (2) that serious questions
are raised and the balance of hardships tips sharply in its
favor. Los Angeles Memorial Coliseum v. National Football, 634
F.2d 1197, 1201 (9th Cir. 1980). These two formulations represent
two points on a sliding scale in which the required degree of
irreparable harm increases as the probability of success
decreases. Oakland Tribune, Inc. v. Chronicle Pub. Co., 762 F.2d
1374, 1376 (9th Cir. 1985). Under any formulation of the test,
however, plaintiffs must demonstrate that there exists a
significant threat of irreparable injury. Id. Plaintiffs have
not and cannot make that showing.
In addition, and significantly, it is beyond cavil that the
purpose of injunctive relief is "to preserve the status quo ante
litem pending a determination of the action on the merits." Larry
P. v. Riles, 502 F.2d 963, 965 (1974). Furthermore, a court must
resist the moving party's attempt to turn the hearing for
injunctive relief "into a trial of the merits of the action upon
affidavits, and it is not usually proper to grant the moving
party the full relief to which he might be entitled if successful
at the conclusion of a trial. This is particularly true where
the relief afforded, rather than preserving the status quo,
completely changes it." Id. It is perhaps impossible to imagine
a situation wherein the status quo would be more drastically
changed than if the plaintiffs obtain the relief they seek
against Netcom. The relief, if granted, will fundamentally alter
the functioning of the world's largest electronic public library
and potentially expose each of its millions of users to unlimited
tort liability.
A. Plaintiffs cannot demonstrate irreparable harm.
1. The threat of harm to plaintiffs has been dissipated in
light of the execution of the Court's order of seizure.
NETCOM is aware that the Court issued an order of seizure
against defendant Erlich and that pursuant to that order Erlich's
home was searched and all copies of the allegedly copyrighted
materials are now in the possession of plaintiffs. As a result
of the seizure of these materials on Monday, February 20, 1995,
there is no imminent threat that Erlich will continue his
allegedly infringing practices and, consequently, plaintiffs
cannot demonstrate that they will suffer irreparable harm if an
injunction is not granted.1 On this basis alone, the Court
should deny plaintiffs' requested injunction.
_________
1. Messages posted on the USENET have an exceedingly short
'shelf life,, and are deleted automatically every several days.
Thus, all messages posted by Erlich prior to Monday cannot be
retransmitted.
2. In contrast, the threat of harm to NETCOM and the
public at large, if the injunctive relief is granted,
is extraordinary because it would terminate the service
of hundreds of individuals against whom the plaintiffs
allege no wrong.
Internet users often gain access to the Internet through
multiple intermediate access providers. Often, the intermediate
access provider is a bulletin board service ("BBS") to whom
individuals directly subscribe. The BBS, in turn, subscribes to
an access provider, like NETCOM, to gain access to the Internet
for all of its subscribers.
Given the nature of this multi-tiered access process, NETCOM
has no way to discretely terminate Erlich's access to the
Internet. He is not a subscriber of NETCOM and has no direct
relationship with it. Francis Decl., at 15. Accordingly,
plaintiffs' demand, if granted, would require NETCOM to cut off
its subscriber defendant Klemesrud in order to defeat Erlich*'s
access to the Internet. This action, however, would also
simultaneously terminate the Internet access of all of
Klemesrud's 500 active subscribers. Id. As a result, hundreds of
innocent users who rely upon Klemesrud to provide their link to
the Internet would also have their access terminated because of
the alleged misconduct of one. The law does not countenance such
a baseless result or imposition of liability.
B. Plaintiffs cannot show a probability of success on the
merits.
To obtain the requested injunctive relief, plaintiffs must
demonstrate a likelihood of success on the merits. Plaintiffs
have not and cannot make such a showing.
1. Plaintiffs are demanding an unprecedented extension of
copyright infringement liability passive transmitters
of electronic information, who have no control of the
information third parties convey over their lines.
Plaintiffs are asking this Court to issue extraordinary
relief that is without precedent and cannot be supported. As
discussed further below, no case has held that such liability
exists. Plaintiffs, request, to extend liability for copyright
infringement to Internet access providers over whose transmission
lines Internet users may convey infringing material, is akin to
seeking redress against the telephone company for torts committed
by telephone. Passive transmitters have no knowledge or control
of the content of communications that pass over their access
lines.
If the Court were to grant Plaintiffs, request, it would
have profound implications for millions of people and for the
future of the "information superhighway." In reality, a finding
of liability on NETCOM's part under the facts of this case would
inevitably prompt the dismantlement of the Internet because it
would establish a precedent whereby every user faces the
potential of committing copyright infringement simply by the act
of accessing the Internet. Because everyone who accesses the
USENET system automatically receives a complete copy of the
postings transmitted by others, all USENET users could be subject
to liability for direct infringement if any posting contains
unauthorized, copyrighted material.
2. Courts have always deferred to Congress the issues of
copyright protection and technological innovation.
In Sony Corp. v. Universal City Studios, Inc., 464 U.S. 417
(1984), the Supreme Court was faced with a dilemma similar to the
one presently confronting this Court. It was asked to fit into
the landscape of copyright law a technological innovation--video
cassette recorders ("VCRs")--that Congress did not envision at
the time the Copyright Act was drafted. Sony manufactured
millions of video recording devices primarily used for making
copies of television shows and audio-visual works subject to
copyright protection. The Court of Appeals held that Sony was
chargeable with knowledge of the infringing activity because the
reproduction of copyrighted materials was a major use of the
product.
The Supreme Court reversed. "There is no precedent in the
law of copyright for the imposition of vicarious liability on
such a theory." Id. at 438. It concluded that since the Sony
"Betamax" was also capable of substantial non-infringing use, (in
that case, "time shifting" of program viewing which the court
found to be subject to the defense of fair use), that Sony could
not be held contributorily liable. It stated "one may search the
Copyright Act in vain for any sign that the elected
representatives of the millions of people who watch television
every day have made it unlawful to copy a program for later
viewing at home, or to have enacted a flat prohibition against
the sale of machines that make such copying possible." Id., at
456.
Similarly, in this case, the Internet, and the NETCOM access
station, are used for millions of legitimate communications.
There is no support in the statute for holding NETCOM liable for
a third party act. The import of the Plaintiffs' request is
breath-taking: anyone accessing or passively transmitting
material on the Internet may be liable for infringement and/or
may be cut-off the Internet because of another party's posting.
The Supreme Court quoted the district court, which found in
favor of Sony, for reasoning which is instructive here:
Selling a staple article of commerce - e.g., a type-writer,
a recorder, a camera, a photocopying machine - technically
contributes to any infringing use subsequently made thereof,
but this kind of 'contribution,' if deemed sufficient as a
basis for liability, would expand the theory beyond
precedent and arguably beyond judicial management . . . .
Commerce would indeed be hampered if manufacturers of staple
items were held liable as contributory infringers whenever
they 'constructively' knew that some purchasers on some
occasions would use their product for a purpose which a
court later deemed, as a matter of first impression, to be
an infringement.
Id., 417 U.S. at 426 quoting 480 F. Supp. 429 (1979). The same
is true here, where plaintiffs seek an order against a means of
communication and not against a wrong-doer.
"The judiciary's reluctance to expand the protections
afforded by the copyright without explicit legislative guidance
is a recurring theme." See, e.g., Fortnightly Corp. v. United
Artists Television, Inc., 392 U.S. 390 (1968) and Teleprompter
Corp. v. Columbia Broadcasting System, Inc., 415 U.S. 394 (1974)
(technology that makes possible the retransmission of television
programs by cable or microwave systems did not constitute
copyright infringement).2 As the Supreme Court has noted,
Sound policy, as well as history, supports our consistent
deference to Congress when major technological innovations
alter the market for copyrighted materials . . . . In a case
like this, in which Congress has not plainly marked our
course, we must be circumspect in construing the scope of
rights created by a legislative enactment which never
contemplated such a calculus of interests.
Sony, 464 U.S. at 431.
The Supreme Court closed with a acknowledgement that applies
with equal force to this case: "It may well be that Congress will
take a fresh look at this new technology, just as it so often has
examined other innovations in the past. But it is not our job to
apply laws that have not yet been written." Id. at 456.
_________
2. These cases were codified in a complex statutory scheme at
17 U.S.C. 111, which makes exempts secondary transmissions in
the broadcast industry from the provisions of the copyright act.
3. There is no support in the law for plaintiffs' request.
In the only two reported-decisions that address the issue of
copyright infringement and the Internet, two federal courts have
found that a BBS may be liable for direct copyright infringement,
if it stores copyrighted material on its database and allows
subscribers to download and copy the material without the
permission of the copyright owner. Sega Enterprises Ltd. v.
MAPHIA, 857 F. Supp. 679 (N.D. Cal. 1994); Playboy Enterprises,
Inc. v. Frena, 839 F. Supp. 1552 (M.D. Fla. 1993). Neither of
these cases involve the access providers that linked the BBS in
question to the Internet.
An equally significant indication that such liability is not
contemplated by the Act is the July 1994 Report of the Working
Group on Intellectual Property Rights ("Working Group"). The
Working Group is a subcommittee of the Clinton Administration's
Information Infrastructure Task Force and is charged with
recommending changes to the Copyright Act to accommodate the
realities of the information superhighway. Rice Decl., Exh. C,
Intellectual Property and the National Information
Infrastructure: A Preliminary Draft of the Report of the Working
Group on Intellectual Property Rights ("Report"). The Working
Group's recommendations were uniformly aimed at safeguarding the
rights of intellectual property owners whose works appear on the
Internet. However, the Working Group did not suggest any
amendments to the Copyright Act that would extend infringement
liability to companies, like NETCOM, that passively transmit
protected works over the Internet. See, Id. In addition, it is
clear that such liability is not contemplated by the Task Force
under the existing law.
Commentators have also uniformly concluded that the
extension of infringement liability to passive information
conduits is wholly unwarranted. The leading authority on
copyright law concurs with the court's decision in Sega to hold a
BBS operator liable as a contributory infringer based on his
personal solicitation and encouragement of infringing practices.
However, he concludes that a finding of infringement is not
appropriate in cases where "the information service is less
directly involved in the enterprise of creating unauthorized
copies . . . . " R.T. Nimmer, The Law of Computer Technology,
15.11B at S15-36 (2d ed. 1994). That is exactly the situation
present here. See also, Sarah B. Deutsch, "Superliability on the
Superhighway?", The Multimedia Law Report, at 4-6 (November
1994), (Rice Decl., Exh. D). "Should the law of contributory
and vicarious (copyright infringement) liability be allowed to
apply to activities outside Information Conduits, knowledge and
control, the [National Information Infrastructure) will suffer
greatly. Companies would be discouraged from providing services
or building the NII infrastructure, which would hinder a fully
interactive and open environment as envisioned today.").
Accordingly, there is do support in the case law or
commentary for the position which Plaintiffs ask the Court to
take here. Further, such extraordinary relief will be
devastating to the operation of the Internet and the industry it
has created.
4. NETCOM cannot be held liable under the contributory
infringement doctrine because it cannot exercise
editorial control over the messages transmitted on the
USENET.
In Sony, the Supreme Court recognized the longstanding rule
that contributory infringer status has traditionally been given
to those who were "in a position to control the use of
copyrighted works by others and had authorized the use without
permission from the copyright owner." Sony, 464 U.S. at 437.
NETCOM does not fit this definition because, short of
discontinuing its service in its entirety, it has no control over
the use of copyrighted works by subscribers who post on the
USENET and it has in no way authorized the use of copyrighted
works without permission of the copyright owner. Furthermore,
given the speed and volume of the digital messages transmitted
via the *USENET, it would be impossible for access providers like
NETCOM to attempt to exercise editorial control. There are
approximately 150 megabytes, or 150 million key strokes of
information passing over NETCOM's transmission lines per day.3
_______
3. Furthermore, the Court must also consider the application of
the fair use defense in this case, if liability could be found.
In particular, NETCOM makes no use whatsoever of the information
and derives no pecuniary benefit from any item posted on the
Internet. NETCOM merely provides the means for access to it.
Similarly, the parties should have an opportunity to fully brief
the applicability of the fair use doctrine to Erlich's use of the
allegedly copyrighted materials once information about such use
can be obtained.
C. The Order plaintiffs request is completely unnecessary
to address their concerns.
Plaintiffs allege that certain copyrighted written works and
trade secret materials are being published without their consent
by defendant Mr. Erlich. To the extent that plaintiffs can prove
such to be the case,4 an order impounding the materials and
prohibiting publication against Mr. Erlich will address this
problem entirely.
________
4. NETCOM has had limited time to investigate the merits of
such claims, however, NETCOM directs the Court to Religious
Technology Center v. Wollersheim, 796 F.2d 1076 (9th Cir. 1986),
cert. denied, 479 U.S. 1103 (1987) in which the court held that
Plaintiffs' religious materials do not constitute trade secrets
under California law.
D. An order against NETCOM would not prevent access to
these materials by other means.
The relief requested against NETCOM would be fruitless. It
wrongly assumes that NETCOM is the sole access point available to
Erlich and Klemesrud. Internet users, however, may gain access
to the information, database or newsgroup that they seek through
multiple access points and by multiple means of communicating
with the Internet. In addition, experienced "hackers" can gain
nondirect access to the Internet without special software or an
access service. Francis Decl., at 6.
In the instant matter, for example, it is not clear that
NETCOM is Klemesrud's only link to the Internet and, if this is
not the case, a severing of his NETCOM subscription would be
entirely meaningless. Second, and assuming that NETCOM is the
only access provider upon which Klemesrud relies and that a
termination of his NETCOM account will consequently defeat the
Internet access of Erlich and Klemesrud's 500 other subscribers,
Erlich could gain access through any commercial on-line service,
such as America OnLine, Prodigy and CompuServe, or through his
local university to name just a few available alternatives.
Accordingly, the relief requested is unnecessary and, further,
would be fruitless. In contrast, the harm to the public and
NETCOM, if the injunctive relief is granted, would be immense.
IV. CONCLUSION.
For the foregoing reasons, plaintiffs, request for a
Temporary Restraining Order should be denied.
Dated: February 17, 1995.
PILLSBURY MADISON & SUTRO
RANDOLF J. RICE
BARBARA R. SHUFRO
MELISSA A. BURKE
Ten Almaden Boulevard
San Jose, CA 95113-2226
By /s/
Attorneys for Defendant
NETCOM ON-LINE COMMUNICATIONS
E-Mail Fredric L. Rice / The Skeptic Tank