Business of all sizes are clamoring to take advantage of the Internet by establishing their presence on the World Wide Web. But what are some of the legal risks for businesses that establish a “home page” or “Web site”? Is a Web site operator liable for posting someone else’s copyrighted information or making it available for downloading? What if one web site operator simply provides a link to another Web site which makes available someone else’s copyrighted information? Is the business supplying the link liable?

The World Wide Web is a network of interconnected computers on the Internet enabling users to literally jump from one site to another anywhere on the planet to access or download information by simply clicking on a highlighted word or symbol that provides a link to another site. The more links a Web site contains to other sites, in addition to its own presumably worthwhile content, the greater the perceived value of that site. The result will hopefully be greater traffic through the site leading to increased sales, recognition, prestige, good karma or other benefits (the Web is so new, it’s too early to tell whether businesses will profit from being on it).

The culture of the Internet, including the Web, thrives on the free flow and ready accessibility of information. Whether that information is software or digitized video, music or text, there is a widespread misconception that once it is on the Internet, it can be copied and transmitted with impunity – a perception squarely at odds with the copyright interests of those who earn a living developing and selling that information, and with copyright law.

Suppose a manufacturing business operating a Web site wants to induce potential customers to visit its site to obtain information about its products. The manufacturer wants to provide a useful service to its target market, so it makes numerous articles from current and back issues of a popular industry trade journal available for downloading from its Web site. The journal is otherwise available only from its publisher at an exorbitant subscription rate. Seeking to piggy-back on the manufacturer’s efforts, several independent consultants in the industry with their own Web sites provide links to the manufacturer’s site in order to access and download the trade journal.

The journal’s publisher, after noticing a marked downward slide in subscription revenues, discovers that her publication is now on the Internet. What are the publisher’s legal rights? Who, if anyone, is liable?

One must look to copyright law to see where the chips may fall. Generally, copyright law protects original works of authorship “fixed” in a “tangible medium of expression.” The copyright owner has the exclusive right to copy, modify, distribute and publicly perform and display the copyrighted work. Under the Copyright Act, a work is “fixed” when it is “sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than a transitory duration.”

Clearly, the printed version of the journal described above meets the criteria for copyright protection. So, the unauthorized creation of copies from the printed journal, even in digitized form on the Web site’s computer hard drive, would lead to liability for the manufacturer. The manufacturer may also be liable for creating additional infringing copies each time a journal article is accessed on its Web site. Current caselaw holds that the act of a computer creating a copy of a protected work in its random-access memory (RAM) – a brief but necessary step in the transmission of the journal from the manufacturer’s Web site to anyone accessing it from another Web site – results in the creation of a sufficiently “fixed” copy for infringement liability to exist if the copy was unauthorized. If the manufacturer’s copying was determined to be “willful,” i.e., it knew it was violating the law when it made the copies, it could be assessed statutory damages of up to $100,000 for each work infringed.

As is usually the case with new technologies, there is a small but growing body of caselaw addressing legal issues specific to the Internet and on-line providers. One published court decision found a defendant BBS operator liable for distributing copies of copyrighted materials, but not specifically for making the infringing copies. In Playboy Enterprises, Inc. v. Frena, Playboy sued a BBS operator for distributing scanned photographs from its magazine, which apparently garnered the BBS nearly $3 million a year. The defendant BBS was found liable notwithstanding its claim that its subscribers, and not the BBS, placed the copyrighted pictures onto its system. In Sega v. MAPHIA, a members-only BBS offered access to Sega’s copyrighted video games on its system. The court held the BBS liable for infringing Sega’s copyrights by distributing the games and stated that the BBS could be found liable for direct infringement for making the copies as well.

While the manufacturer in our example might argue that having the journal on its Web site available for downloading does not involve distributing a copy in the precise manner prohibited by the Copyright Act, i.e., “by sale or other transfer of ownership, or by rental, lease or lending,” the publisher could likely successfully argue that the manufacturer has violated the publisher’s exclusive right to make copies by copying the journal onto its Web site hard drive. At any rate, the manufacturer has legal troubles ahead as a direct infringer of the publisher’s copyrights.

Are the independent consultants who provide links in their Web sites to the journal articles on the manufacturer’s site liable to the publisher for copyright infringement as well?

The Copyright Act not only provides for direct liability for infringement, as would result from the manufacturer first copying the journal articles, but for contributory and vicarious liability as well. A contributory infringer has been defined in numerous court decisions to be one who, with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another, often by providing services or equipment that facilitate the direct infringement of the protected work. To be found liable for contributory infringement, the alleged infringer must know or have reason to know that its conduct may lead to an infringement.

Similarly, vicarious liability results when the alleged infringer has the right and ability to control or supervise the infringing activity of another and derives a financial benefit from the exploitation of the copyrighted materials. Actual knowledge of the infringement is not a prerequisite for vicarious liability. The law, in essence, punishes the vicarious infringer for sitting idly by and benefiting from the infringement if it could have prevented it.

In our example, the independent consultants whose Web sites link to the manufacturer’s site clearly facilitate the infringement of the publisher’s copyrights. They provide the means to connect users accessing their sites directly to the infringing copies of the journal articles on the manufacturer’s site. But unless the publisher can prove that the independent consultants knew or had reason to know that the downloadable journal articles on the manufacturer’s Web site were infringing copies, they may escape contributory liability for infringement. They may also escape vicarious liability for infringement unless the publisher can successfully argue that the consultants financially benefited from the link to the infringing articles on the manufacturer’s site and had the ability to control or supervise the infringing conduct of the manufacturer. Proving the latter point may be especially difficult.

There is no caselaw directly addressing the issue of a Web site operator’s liability for contributory or vicarious copyright infringement for providing a link to infringing material on another site. Businesses seeking to take advantage of the World Wide Web are best advised to obtain the advice of competent legal counsel in deciding what materials they may display or link to on their sites – lest they find themselves test cases for new law in the cyber age.

This article is provided for general informational purposes only and does not constitute legal advice. Each factual situation is different and requires specific analysis.

Attorney Eric Freibrun specializes in Computer law and Intellectual Property protection, providing legal services to information technology vendors and users. Tel.: 847-562-0099; Fax: 847-562-0033; E-mail: