Cross-posted from the Center for the Protection of Intellectual Property (CPIP) blog.
In a letter submitted to the FCC late last week defending the Commission’s deeply flawed set-top-box proposal, a group of professors make an incredible claim: Everyone is perfectly free to distribute copyrighted works online however they please. No license? No problem! According to these professors, many of whom teach copyright law, copyright owners have no distribution right in cyberspace. If you think this sounds wrong, you’re right! This claim sounds ridiculous because it is ridiculous, and it’s simply amazing—and troubling—that professors would mislead the FCC in this way.
The professors argue that a copyright owner’s “right to distribute encompasses the distribution of physical copies of a work, not electronic transmissions.” In support, they cite no case law whatsoever. There’s a good reason for this: None exists. The reality is that every single court that has ever considered this argument on the merits has rejected it. Time and again, this argument has been summarily dismissed by the courts. As the Nimmer on Copyright treatise puts it: “No court has held to the contrary on this issue[.]” Yet, the professors present this to the FCC as an accurate description of the law, with no equivocation whatsoever.
In their defense, one can make a plausible argument that this follows from certain parts of the Copyright Act. And the professors do in fact cite these parts. They quote Section 106(3), which gives copyright owners the exclusive right “to distribute copies . . . of the copyrighted work to the public,” and Section 101, which says that “copies are material objects.” At first blush, one could question how it’s possible to distribute a “material object” online. Indeed, many academics have questioned this very thing. For example, one professor wrote in 2001 that “transmitting copyrightable works over a computer network such as the Internet do[es] not involve any transfer of such material objects.” On this view, transfers over digital networks are not distributions of material objects.
While some academics may insist that this is the only way to interpret the Copyright Act, the reality is that the courts have uniformly interpreted it differently. Many courts have explicitly rejected the textual argument that there are no digital distributions, and many others have just assumed that such digital distribution rights exist. As the district court in Arista Records v. Greubel noted in 2006, despite “scholarly articles reflecting debate over the scope” of the distribution right, “the courts have not hesitated to find copyright infringement by distribution in cases of file-sharing or electronic transmission of copyrighted works.” The district court then cited opinions by the Supreme Court in New York Times v. Tasini, the Seventh Circuit in In re Aimster, and the Ninth Circuit in A&M Records v. Napster that applied the distribution right in cyberspace without even flinching.
Perhaps the most in-depth analysis of the issue comes from London-Sire v. Doe, where District Judge Nancy Gertner held in 2008 that it “makes no difference that the distribution occurs electronically[.]” Judge Gertner reasoned that “[w]hat matters in the marketplace is not whether a material object ‘changes hands,’ but whether, when the transaction is completed, the distributee has a material object.” Even though the “distributee” has a different “material object”—the hard drive or other storage media where the file resides—Judge Gertner held that a digital distribution has taken place nonetheless. She warned that “an overly literal definition of ‘material object’ . . . ignores the phrase’s purpose in the copyright statutes.”
Other courts have adopted this reasoning. For example, the district court in Capitol Records v. ReDigi cited London-Sire approvingly: “[T]he Court agrees that ‘[a]n electronic file transfer is plainly within the sort of transaction that § 106(3) was intended to reach [and] … fit[s] within the definition of ‘distribution’ of a phonorecord.’” The court then held that the distribution right exists in cyberspace: “Accordingly, the court concludes that . . . the sale of digital music files on ReDigi’s website infringes Capitol’s exclusive right of distribution.” Likewise, just last year, the district court in BMG v. Cox relied on London-Sire in holding that, “[n]ot only can electronic files be ‘material objects,’ but transferring files using a BitTorrent protocol satisfies the transactional element of distribution.”
The fact is that courts have not wavered in finding that the distribution right applies online. As one district court said in 2012, “[i]n the electronic context, copies may be distributed electronically.” The point is so well-settled that it defies logic to claim otherwise, and it’s certainly consistent with other parts of the Copyright Act. For instance, Section 506(a)(1)(B) makes it a crime to “willfully” infringe by “distribution, including by electronic means[.]” And Section 115(c)(3)(A) creates a compulsory license “to distribute . . . by means of a digital transmission[.]” If digital distributions didn’t implicate the public distribution right, it wouldn’t be a crime to distribute “by electronic means,” and one wouldn’t need a license to distribute “by means of a digital transmission.”
To claim that the “right to distribute encompasses the distribution of physical copies of a work, not electronic transmissions,” as the professors do, is simply wrong. There’s certainly an argument that can be made, but it’s not an accurate description of the law—which is how the professors present it. Everyone knows the distribution right exists online, and it’s industry practice to license digital distributions. Do you think iTunes and Amazon pay for distribution licenses because they just feel like it? It’s disturbing that professors would state without any qualification that electronic transmissions don’t implicate the distribution rights of copyright owners. And if they’re willing to say that, it makes you wonder what else they’re willing to say.
 My colleagues and I have written extensively about the copyright concerns with the FCC’s set-top box proposal. See, for example, here, here, here, and here. The FCC now claims that a revised version of its proposal addresses these concerns, but the new language has not yet been released. Despite this fact, these professors claim that the yet-to-be-released proposal “does not interfere with any legitimate copyright interests of programmers, and that it is within the Commission’s authority to implement.” We’ll save our analysis of the new proposal for when the text itself is made available.