Religious Tech. Ctr. v. Netcom On-Line Communications Servs., Inc.

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907 F. Supp. 1361 (N.D. Cal. 1995)

Plaintiff, the Church of Scientology, sued a former church member, claiming that his distribution over the Internet of church materials violated the church’s copyright. The church also sued the operator of the bulletin board (“BBS”) on which the material had been posted as well as Netcom, the Internet access provider that allowed the BBS to be online.

The court held that plaintiff could not establish a claim of direct infringement against Netcom, noting that:

Where the infringing subscriber is clearly directly liable for the same act, it does not make sense to adopt a rule that would lead to the liability of countless parties whose role in the infringement is nothing more than setting up and operating a system that is necessary for the functioning of the Internet. . . . The court does not find workable a theory of infringement that would hold the entire Internet liable for activities that cannot reasonable be deterred.

Id. at 1372. The court refused to distinguish the case on the basis of Netcom’s actual knowledge of infringement, explaining that “such liability cannot be based on a theory of direct infringement, where knowledge is irrelevant.” Id.

The court also held that plaintiff had not adequately alleged direct infringement because the complaint failed to allege that the operator “took any affirmative steps to cause the copies to be made.” Id. at 1381. In addition, the court held that plaintiff had not adequately established vicarious liability for infringement because there was no allegation that the BBS operator “in any way profit[ed]” from allowing the end user to infringe copyrights, but the court granted plaintiff leave to amend to cure this pleading defect. Id. at 1382. However, it did hold that plaintiff had stated a claim for contributory infringement based on the allegation in the complaint that the BBS operator “knew or should have known” of the infringing activity, particularly since plaintiff claimed to have put the operator on notice. Id.

The court based its ruling on its interpretation of Section 106 of the Copyright Act, which it held required "volition or causation" by the purported infringer: "[a]lthough copyright is a strict liability statute, there should still be some element of volition or causation which is lacking where a defendant’s system is merely used to use a copy by a third party." 907 F. Supp. at 1370.

The Netcom decision has been widely followed, and was adopted by the Fourth Circuit in CoStar v. LoopNet, 373 F.3d 544 (4th Cir. 2004), which endorsed Netcom's interpretation of Section 106 over Playboy Enterprises, Inc. v. Frena, 839 F. Supp. 1552 (M.D. Fla. 1993) (holding an ISP strictly liable for illegal copying on its computer system). The Fourth Circuit "conclude[d] that Netcom made a particularly rational interpretation of § 106 when it concluded that a person had to engage in volitional conduct — specifically, the act constituting infringement — to become a direct infringer."

Chapter 3 - Copyright
General · Rights Acquisition · Infringement Issues · Digital Millennium Copyright Act (DMCA) · Non-Preemptable Common Law Claims