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Links, links, links; everywhere on the Internet there are links. They are a fundamental building block of the Web and an integral part of many Web sites. A review of recent headlines might lead one to the conclusion — unbelievable as it may be — that these links could make Web site operators liable for copyright infringement. Copyright owners have the exclusive right to reproduce, distribute, adapt, publicly perform and publicly display their works. Few would dispute the conclusion that copyright law prohibits people from using the Internet to perform these activities. It is clear that, both online and offline, a person or company that violates one or more these exclusive rights will be deemed a direct infringer and, absent a defense, may be liable for damages. In the past year, however, there has been a marked increase in the number of copyright infringement cases brought against Internet sites that do not directly infringe, but provide direct links to infringing works or links to other web sites posting infringing content. For instance, the Recording Industry Association of America Inc. (RIAA) filed lawsuits against Napster, an Internet service that allows users to exchange sound files, A & M Record Inc. v. Napster Inc., No. C 99-05183 (N.D. Cal. Aug. 10), and MP3Board, a site that provides links to sound files. MP3Board Inc. v. Recording Industry Association of America Inc., C-00 20606 (N.D. Cal. filed June 2); Arista Records Inc. v. MP3Board Inc., No. 00 Civ 4660 (S.D.N.Y. filed June 23). Both of these suits allege infringement based on the defendants’ links to unauthorized sound files. What are the bases of this new source of potential liability, and what can be done to reduce the risk? SOURCE OF SERVICE PROVIDERS’ LIABILITY For these purposes, service providers are providers of online services or network access. This, arguably, includes large access providers as well as chat rooms and Web page hosting services. The Copyright Act makes it clear that these parties may, in certain cases, be liable for monetary damages and injunctive relief for linking to infringing content or sites posting infringing works. See17 U.S.C. � 512(d). Under the applicable provision, service providers can be liable if they have actual knowledge that the linked material or activity is infringing or if they are aware of facts or circumstances that make the infringing activity apparent. See17 U.S.C. � 512(d)(1). If they receive a financial benefit from the infringing activity, service providers that have the right and ability to control the infringing conduct, such as those that review and censor users’ postings, can be liable for such links irrespective of their actual or constructive knowledge of the of the linked material’s infringing nature. See17 U.S.C. � 512 (d)(2). Moreover, according to the Copyright Act, once a service provider receives written notice that its site links to infringing material, it must expeditiously remove or disable the links to that allegedly infringing conduct ( see17 U.S.C. �� 512(1)(C), 512(3)), and register a contact person, or “designated agent,” with the U.S. Copyright Office. 17 U.S.C. � 512(c)(2). Those who register a designated agent also receive a limited liability exemption for infringement that directly resides on its system at the direction of a user, which makes registering an agent extremely worthwhile. See�17 U.S.C. Sec. 512(c)(2). SOURCE OF NON-SERVICE PROVIDER’S LIABILITY The Copyright Act’s liability provisions do not apply to companies other than service providers. Therefore, the potential liability of such companies for links to infringing content or sites is premised on the theories of contributory and vicarious infringement. Contributory liability developed from the tort law theory that one who directly contributes to a tortious act should be liable for any damage that results from that tortious act. In extending this theory to copyright cases, courts have imposed liability if the defendant knew of the infringing activity and induced, caused or materially contributed to it. For example, in Fonovisa v. Cherry Auction, 76 F.3d 259 (9th Cir. 1996), a flea market owner was held contributorily liable for its vendors’ sales of infringing cassette tapes on the ground that the venue owner “provided the site and facilities for known infringing activity.” This theory of liability has been extended to hold Web sites liable for providing links to infringing content if there is evidence that the linking site was aware of the infringing nature of the content. Intellectual Reserve Inc. v. Utah Lighthouse Ministry Inc., 75 F. Supp. 2d 1290 (D. Utah 1999), involved a defendant, Utah Lighthouse Ministry, which posted copyrighted materials from a Mormon handbook directly on its site and, after the court ordered that the postings be removed, replaced those postings with an e-mail message that listed, but did not link to, Internet addresses where the entire handbook could be accessed. The court held that the defendants were not liable for the infringing acts of the sites that directly posted the handbook, as there was no evidence that Utah Lighthouse Ministry induced, caused or materially contributed to the sites’ infringement. Finding the defendants actively encouraged others to browse the sites and to download the handbook, however, the court held the defendants contributorily liable for the users’ unauthorized copying of the handbook. Courts also may look to the theory of vicarious liability, which imposes liability based on a defendant’s right and ability to supervise the infringing conduct, and the defendant’s direct financial interest in the exploitation of the copyrighted work. As seen in Religious Technology Center v. Netcom Online Communications Services Inc., 907 F. Supp. 1361 (N.D. Cal. 1995), demonstrating a direct financial interest in an Internet case can be difficult. In Netcom, the plaintiffs claimed that the defendant was vicariously liable for allegedly infringing bulletin board postings containing excerpts from the Church of Scientology’s texts. Due to Netcom’s past practice of policing and deleting its subscribers’ postings, the court held that whether Netcom had the right and ability to supervise the infringing conduct was a triable issue of fact. However, the court ultimately dismissed the vicarious liability claims on the basis that there was no evidence that Netcom derived a direct financial benefit from this infringing activity. The landscape of the Internet has changed greatly in the five years since the Netcomdecision was rendered, however. As business models for the Internet continue to develop and as companies consolidate and strike exclusive deals, demonstrating the financial interest prong of the vicarious liability test may become easier. Both the copyright and Internet communities will be watching the RIAA cases with bated breath to see how these alternative theories of liability are developed further and applied in the Internet arena. Until then, practitioners should advise their Internet clients to take the following steps: � Service providers should register a designated agent with the Copyright Office. It’s one of the requirements a service provider must fulfill to take advantage of the Copyright Act’s limitations on service providers’ liability for linking to infringing content or sites posting infringing works. � Web sites should review their links. If a link is a means of providing access to questionable content without having it physically reside on the site, as suggested by the Utah Lighthouse Ministrycase, the Web site still can be liable for the activity under the theory of contributory liability. � Web sites should question whether there is a direct financial interest between their site and the content or sites to which they link. If there is such an interest, the Web site may be liable for any resulting infringement under the theory of vicarious liability, even if it does not have actual knowledge of the infringement. Common sense should be the rule when assessing your client company’s links. As demonstrated by the case law thus far, just because an infringement is not physically occurring on your client’s site does not mean that your client will not end up on the wrong side of the “v.” in a copyright infringement lawsuit. Denise I. Mroz is an associate in Woodcock Washburn Kurtz Mackiewicz & Norris’ Philadelphia office. She can be reached at Denise I. Mroz.

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