The Graphic Artists Guild:

• Opposes limiting the copyright liability of on-line service providers as contrary to the fundamental Constitutional intent of copyright law to protect the rights of creators;
• Opposes limiting the copyright liability of on-line service providers because they are adequately protected under existing law;
• Opposes limiting the copyright liability of on-line service providers to the extent that they lay unilateral claim, by terms of service or otherwise, to copyright in works posted on or transmitted by on-line services;
• Supports holding on-line service providers and their subscribers accountable for the unactionable infringements enabled by the distribution of copyrighted works over on-line networks;
• Opposes limiting the copyright liability of on-line service providers to the extent that such limitation removes the incentive for on-line service providers to assist and participate in the dissemination of copyright education to the general public.

THE GRAPHIC ARTISTS GUILD

The Graphic Artists Guild promotes and protects the economic interests of its members. It is committed to improving conditions for all creators of graphic art and raising standards for the entire industry. The Guild is a union that embraces creators of graphic art at all levels of skill and expertise, producing work intended for presentation as originals or reproductions.

Graphic artists create a wide variety of intellectual property: company and product logos; illustrations for media and advertising; posters for political and sales campaigns; merchandise in the apparel, home decorative and stationery markets; and computer graphics which enhance and drive the digital marketplace.

Graphic artists have already suffered from infringements caused or facilitated by on-line service providers (see Appendix A), and are particularly vulnerable to further injury without relief if the On-Line Copyright Liability Limitation Act passes.

THE PROPERTY RIGHTS OF CREATORS MUST BE SAFEGUARDED.

The Constitutional authorization for copyright protection in Article I, ¤8 mandates safeguarding the rights of creators, for their own benefit and for the public interest. The Copyright Act is designed to protect the rights of creators in their work, and the rights of successor interests; licensees, purchasers and heirs. Any alteration of liability for infringement must be measured against this standard; unless the effect is the better protection of creatorsâ rights, the alteration is contrary to the legislative history and intent of the copyright law.

This bill proposes to shield a specific class of business from copyright liability in the course of its distribution or transmission of copyrighted work. It does not address the threat which such distribution may pose to the protection of creatorsâ rights. In failing to do so, such an alteration in liability threatens the constitutionally-mandated incentives intended to foster the creative process.

ON-LINE SERVICE PROVIDERS PROTECTED BY EXISTING LAW.

On-line service providers are common carriers to the extent that they simply engage in secondary transmissions, providing their subscribers with an avenue for the interchange of their primary transmissions. Carriers engaging solely in the passive transmission of copyrighted work are exempt from liability under ¤111(a)(3) of the copyright law; additional protection is unnecessary. Extending the scope of protection accorded passive transmissions is undesirable in light of the active attempts by on-line service providers to claim a copyright interest in the works transmitted (see infra).

On-line service providers currently shield themselves from liability for copyright infringement under existing law by means of warranty and indemnity. The contract between on-line service provider and subscriber, as expressed in the terms of service, warrants that those disseminating works have the right to do so, and will indemnify and hold harmless the on-line provider from any actions arising from breach of that warranty. (see Appendix, Compuserve Operating Rules: Copyrighted Material; Content and Uses of the Service; Indemnification; Compuserve Terms of Service #4.) This remedy is in keeping with the traditional reliance upon private remedies and civil suits for the settling of copyright claims. Continued reliance on these remedies and on existing statutory protection is preferable to enacting unnecessary special interest legislation, which will extend insulation from liability to the detriment of the integrity of copyright protection.

ON-LINE SERVICE PROVIDERS CANNOT SIMULTANEOUSLY LAY UNILATERAL CLAIM TO A PROPERTY INTEREST IN TRANSMISSIONS AND ACHIEVE INSULATION FROM LIABILITY.

Many on-line service providers do not restrict themselves to a passive role as regards their secondary transmissions. They assert a copyright interest in the works posted on their services, claiming that by virtue of providing the means of transmission they have created value-added compilations, with the non-exclusive right to publish, alter and use the material (see Appendix, excerpt from America Online Terms of Service; excerpt from Compuserve Terms of Service; What is a Compilation Copyright?; Compuserve Copyright). Not only do the on-line service providers pay no compensation for these rights, they compel paying subscribers to forfeit full control of their own property.

On-line service providers cannot simultaneously claim ownership and insulate themselves from liability. To the extent that they claim copyright in the works of creators and copyright holders that are posted or circulated on their networks, they forfeit common carrier status and the corresponding insulation from liability. The proposed act is flawed in that it would not prevent on-line service providers from asserting property rights in the works of others, but would insulate them from liability if they did not themselves post the work. Such a wholesale endorsement of unilateral copyright acquisition is wholly contrary to the protection of creatorsâ rights which is fundamental to the copyright law; further statutory insulation from liability for transmitters who assert a property interest in the work transmitted is neither necessary nor desirable.

ACCOUNTABILITY FOR UNACTIONABLE INFRINGEMENTS ENABLED BY THE DISTRIBUTION OF COPYRIGHTED WORKS.

On-line networks offer great opportunities for the distribution of works. But with this opportunity comes a corresponding peril to the worksâ protection and integrity. The new electronic environment by its very nature makes infringement easy. Technology has vastly increased the means whereby copyrights may be infringed, whether by alteration or dissemination, and the infringement rapidly distributed, without an equivalent increase in means to guard against or detect such infringements.

Not only electronically created work is at risk. Work done in traditional media may be easily taken and placed on an electronic network unbeknownst to the creator. The proposed limitation on liability for on-line service providers, while insulating the means of infringement from liability, offers no compensating means to protect the individual creator.

Despite the pervasiveness of on-line infringements, the difficulty of detecting them and identifying the originating infringer renders them largely unactionable. Yet infringing subscribers and the on-line service providers which furnish the engine for such infringements must be held accountable. A licensing system offers a solution to the threat posed to the copyright system by unactionable infringements. Such a system could include a licensing fee in the subscription collected by on-line service providers from their subscribers, which would be apportioned among rightsholders or their appropriate representatives. Similar systems already exist among cable television providers, which routinely assess and distribute a copyright fee from subscribers.

Liability as an incentive to private sector participation in copyright education.

The swiftly expanding group of on-line users is not generally knowledgeable about the need for intellectual property protection. The result is cavalier treatment of copyrighted material as freely available property. This is a threat to a major United States trade asset as well as to the private interests of rightsholders. If the US is to preserve its constitutionally-based policy of guarding incentives to individual creators, public education in the value of property rights in copyright must be expanded.

Potential liability in copyright infringement suits has given on-line service providers a financial interest in helping to remedy the lack of copyright education in the general populace. Copyright warnings and on-line copyright education sites are widely posted to insulate service providers from liability. Statutory insulation from liability will diminish, if not destroy, the incentive for service providers to create and provide such educational material causing the responsibility and expense of improving copyright education to fall much more heavily on the public sector. Such public policy is not merely short-sighted, but unjust in light of the claims made by on-line service providers on the copyrighted material posted by users.

CONCLUSIONS.

Any alteration of liability for infringement must be measured against the Constitutional mandate to protect the rights of creators. This bill fails to meet that standard; it is not designed to protect the incentives intended to foster the creative process, but to shield a specific class of business from copyright liability. The Graphic Artists Guild believes the On-Line Copyright Liability Limitation Act will benefit a single special interest over the public interest at the expense of individual creators.

Existing law adequately addresses the liability of on-line service providers. Service providers engaging in passive transmission of copyrighted work are common carriers exempt from liability under ¤111(a)(3) of the copyright law. Extending the protection accorded passive transmissions is undesirable in light of on-line service provider claims to a copyright interest in transmitted works. On-line service providers currently shield themselves from infringement liability through warranty and indemnity, in keeping with the traditional reliance upon private remedies and civil suits for settling copyright disputes. Continued reliance upon these remedies and on existing statutory protection is preferable to enacting unnecessary special interest legislation.

On-line service providers asserting a copyright interest in the works posted on their services forfeit common carrier status and the corresponding insulation from liability.

Service providers cannot simultaneously claim ownership and insulate themselves from liability. The proposed Act would not prevent on-line service providers from asserting property rights in the works of others, but would insulate them from liability if they did not themselves post the work. Such a wholesale endorsement of unilateral copyright acquisition is wholly contrary to the protection of creatorsâ rights which is fundamental to the copyright law.

The proposed limitation of liability for on-line service providers insulates the means of infringement while offering no compensating means to protect the individual creator. Technology has increased the means whereby copyrights may be infringed, without an equivalent increase in means to guard against or detect such infringements. On-line infringements are largely unactionable, due to the difficulty of detecting them and identifying the originating infringer. Including a licensing fee in the subscriptions collected by on-line service providers would hold infringing subscribers and on-line service providers accountable for unactionable on-line infringements.

Copyrighted material is often treated as freely available property, due to the publicâs lack of understanding in copyright matters. This harms the private interests of rightsholders and threatens a major United States trade asset. Expanded copyright education is essential for continued US leadership in the area of intellectual property. Potential liability has given on-line service providers a financial interest in improving this situation, but statutory insulation from liability will diminish, if not destroy, their incentive. The responsibility and expense of improving copyright education will fall upon the public sector.

The wider availability of information through electronic networks must not be achieved at the expense of creatorsâ rights. The Graphic Artists Guild urges that the On-Line Copyright Liability Limitation Act be defeated.

Mr. Chairman, my name is Michael Whelan. I have been a professional illustrator since 1974. My works have appeared on numerous book covers, posters, album covers and other sources. I was awarded the prestigious HUGO award 13 times, the HOWARD award three times, and also received the Grumbacher Gold Medal, the Communication Arts Award for Excellence and the Society of Illustrators Gold Medal. I have been a member of the Graphic Artists Guild since 1978.

I am writing to oppose The On-Line Copyright Liability Limitation Act as one who was personally injured by on-line service providers.

Early 1990 I learned that a large number of my works had been scanned, uploaded, and electronically distributed, without my knowledge or authorization, on to the bulletin board/forum areas of three major online information services. In most instances, authorship and copyright information regarding the uploaded works was absent or deliberately deleted. In some cases, other individuals claimed to be the creators of the works. That my name and copyright notice were cropped off the edges of my works indicated to me a willful attempt to destroy my status as creator of the works, but even if not, the resultant damages were the same. The Graphic Artists Guild helped me secure legal counsel, who pursued these infringements on my behalf.

Through discovery, I learned that my images were accessed and downloaded hundreds of times. In at least two cases, some of the images were downloaded onto reproducible media (CDs and floppy disks), and offered for sale by software vendors. In another instance, a software company distributed diskettes of my images as shareware to Macintosh computer dealers across the country so they could demonstrate the graphic capabilities of the Macintosh computer. My artwork had been digitally altered so that an advertising legend was splashed across the left half of the image. I was never compensated for any of those uses. Even worse, because my name and copyright notice were removed, my rights of ownership and attribution were abused.

My livelihood depends upon my ability to control the copyrights to my works. As a small business, I have successfully developed revenue streams from secondary uses of my images. Since a significant portion of my income depends upon the sale of limited edition print reproductions of my art, the financial damages I suffered from these infringements were enormous. How could I

estimate the number of sales I lost to a public with free access to those same images that could be downloaded and printed on a subscriber's own color printer? As it was, the work and money I lost in wrangling with the online companies over my rights were considerable.

Were it not for the widespread popularity of my art and the concern of a loyal following who support my work, I would never have known of these copyright infringements. The vast amount of time and money needed to monitor the online companies is beyond my means, and beyond what most artists can afford to protect themselves. I could never have monitored all the online services and discovered the uploads on my own: I'm too busy earning my living as an artist!

When I took action against the three major on-line service providers, their characteristic response was , "But we assumed the images were public domain, because they carried no copyright notification." My position, which ultimately prevailed, was that the on-line service providers facilitated and encouraged the widespread distribution of my works by failing to manage their downloadable image banks and checking for attribution before accepting the images.

My settlement with these on-line service providers prevents me from disclosing their identities or the details of my compensation, but it doesnât prevent me from addressing this problem as one who was personally violated. There was no doubt they were liable for the injury I suffered and without the legal remedies available to me at the time, I could not have asserted my property rights. God help the artists who are unaware of how much their work has been violated, or who lack the resources in time and money required to keep track of the online service providers and to confront each violation as it occurs.

Our best defense is to rely on laws intended to protect individual creators. Without the protection of copyright law, I probably would never have been compensated for the infringements. Artists like me have a hard enough time defending our copyrights in an era when thieves proclaim "information wants to be free." I urge the committee not to weaken any weapons in our defense arsenal by limiting the liability of on-line providers, who have the means and resources to be held accountable.

Excerpt from Terms of Service, America On-line (AOL).

By submitting Content to any "public area" of AOL (e.g., message boards, forums, the Member Directory), you grant AOL, Inc. and its affiliates the royalty-free, perpetual, irrevocable, non-exclusive right (including any moral rights) and license to use, reproduce, modify, adapt, publish, translate, create derivative works from, distribute, communicate to the public, perform and display the Content (in whole or in part) worldwide and/or to incorporate it in other works in any form, media or technology now known or later developed, for the full term of any rights that may exist in such Content. You also warrant that the holder of any Rights, including moral rights in such Content, has completely and effectively waived all such Rights and validly and irrevocably granted to you the right to grant the license stated above. You also permit any Member and authorized user to access, display, view, store and reproduce the Content for personal use. Subject to the foregoing, the owner of Content placed on AOL retains any and all Rights that may exist in such Content.

Excerpt from Terms of Service, CompuServe.

WHAT IS A COMPILATION COPYRIGHT?

CompuServe has copyrighted the contents of the CompuServe Information Service as a compilation copyright, just as many magazines and newspapers reserve such a copyright on the contents of their publications. This copyright is held in accordance with the 1976 Copyright Act of the United States.

A compilation copyright is granted when an organization collects information in a lawful way, adds value to it, and offers it to others. In this case, the CompuServe Information Service is a value-added product; CompuServe Incorporated has committed substantial financial resources to collecting more than 1700 areas on the service and offering them in an organized, structured way to a defined user base through a nationwide telecommunications network. The compilation copyright is intended to protect that substantial investment from unauthorized exploitation. This does NOT mean that CompuServe assumes ownership of individual programs and databases provided to the system by members or information providers.

IF I UPLOAD A SOFTWARE PROGRAM I'VE DEVELOPED TO COMPUSERVE, DO I STILL RETAIN OWNERSHIP OF THE PROGRAM?

Yes, you do. CompuServe's compilation copyright does NOT supersede individual ownership rights or copyrights to any of the material furnished to the Service by members or information providers.

For example, a member who creates a program and uploads it to a CompuServe forum data library STILL OWNS that program, and may upload it to other information services and bulletin board systems.

It should be noted, however, that CompuServe cannot grant any redistribution rights for materials copyrighted by the author, unless specifically authorized to do so, CompuServe does not own the material or the copyright. These rights must be obtained directly from the author.

WHAT IS COMPUSERVE'S STANCE TOWARD COPYRIGHTED, PUBLIC DOMAIN, AND SHAREWARE PROGRAMS?

Each of these types of property have special characteristics, and deserves separate explanation:

COPYRIGHTED MATERIAL

CompuServe does not allow copyrighted material to be placed on the CompuServe Information Service without the author's permission. Only the owner(s) or persons they specifically authorize may upload copyrighted material to the Service.

Any member may download copyrighted material for their own use. Any member may also non-commercially redistribute a copyrighted program with the expressed permission of the owner or authorized person. Permission must be specified in the document, on the Service, or must be obtained directly from the author. See menu choices 5,6 and 7 for more information about redistribution guidelines.

PUBLIC DOMAIN

Any member may upload public domain programs to the Service. Any member may download public domain programs for their own use or non-commercially redistribute a public domain program. See menu choices 5,6, and 7 for more information about redistribution guidelines.

SHAREWARE

Only the owner or an authorized person may upload shareware programs. Any member may download shareware programs for their own use, subject to the terms provided by the owner. Any member may non-commercially redistribute a shareware program subject to the provided terms explicitly displayed in the software itself, or with permission of the owner or authorized person. See menu choices 5,6 and 7 for more information about redistribution guidelines.

AS A COMPUSERVE MEMBER, CAN I DOWNLOAD PUBLIC DOMAIN INFORMATION AND SHAREWARE PROGRAMS FOR MY OWN USE FROM COMPUSERVE FORUM DATA LIBRARIES?

Yes, you can. Public domain information and shareware programs are uploaded to CompuServe data libraries by their authors for use by other CompuServe members.

MAY I DOWNLOAD PROGRAMS FROM COMPUSERVE FORUM DATA LIBRARIES AND SHARE THEM WITH A FRIEND, OR UPLOAD THEM TO ANOTHER BULLETIN BOARD SYSTEM?

In keeping with the spirit of the development of public domain information and shareware, it is not CompuServe's current policy to prevent casual redistribution of this type of information -- this is low volume and low frequency use or redistribution of information where no commercialism is involved. This means that a member may download a file and share it with others for no commercial gain -- either via a bulletin board service, diskette, or other means.

A member may not, however, download a large number of files for redistribution via any means, nor is it acceptable for a member to update another bulletin board regularly with files obtained from CompuServe.

It's important to note that CompuServe cannot grant redistribution rights for programs clearly copyrighted by the author, unless specifically authorized to do so. Such permission must be obtained directly from the author of the program.

MAY I DOWNLOAD AND RESELL A PROGRAM FROM A COMPUSERVE FORUM DATA LIBRARY?

Commercial exploitation of material contained on the CompuServe Information Service is specifically prohibited by the CompuServe Service agreement, to which each member agrees before being permitted to access the Service. Therefore, members cannot lawfully download and redistribute public information or shareware programs for personal gain.

In addition, mass redistribution of public domain information or shareware is also prohibited. Mass distribution is defined as high frequency and/or high volume transfers.

WHAT ARE THE PENALTIES FOR VIOLATING THE COMPILATION COPYRIGHT OR SERVICE AGREEMENT PROVISIONS?

When a situation involving exploitation is brought to CompuServe's attention, we investigate and, if warranted, remind the violator of the Service Agreement Terms. If subsequent violations are reported, access to the CompuServe Information Service may be terminated for the violator and, in extreme cases, a letter is sent from our legal counsel asking that he or she cease and desist, or risk further legal action.

This is done as a positive step to protect the value and use of the material for CompuServe Information Service members, and to discourage unauthorized redistribution of that material.

COMPUSERVE INFORMATION SERVICE OPERATING RULES

The CompuServe Information Service (the "Service") consists of computing and information services and software, information and other content provided by CompuServe Incorporated ("CompuServe"). In addition, third parties provide information, software, and other content (collectively, "Third Party Content") which may be accessed over the Service. These Operating Rules are provided to make on-line information usage and communications a positive and secure experience for members.

Members agree during the on-line sign up procedure to the terms and conditions outlined in the Operating Rules.

INTRODUCTION

These Operating Rules are part of the terms of your Service Agreement with CompuServe, and you are bound by them. CompuServe may modify these rules at any time by publishing the modified rule(s) over the Service.

COMPUSERVE COPYRIGHT

The entire contents of the Service are copyrighted as a collective work under the United States Copyright laws. The copying, redistribution, or publication of any part of the Service is prohibited, except as expressly provided below.

Each member who places information, software or other content, in the public areas of the Service grants CompuServe the right to edit, copy, publish, distribute, and translate such information, software or other content. Subject to this grant, each member who places information, software or other content on the Service retains any rights member may have in such information, software or other content.

COPYRIGHTED MATERIAL

Copyrighted material must not be placed on the Service without the permission of the owner(s) or person(s) they specifically authorize. Only the owner(s) or such authorized person(s) may upload copyrighted material to the Service.

Members may download copyrighted material for their own use. Except as expressly provided by copyright law, copying, redistribution, or publication must be with the express permission of CompuServe and the owner(s) or such authorized person(s), if other than CompuServe. Permission must be specified in the document, on the Service, or must be obtained directly from CompuServe and the owner(s) or such authorized persons(s), if other than CompuServe. In any copying, redistribution, or publication of copyrighted material, any changes to or deletion of author attribution or copyright notice are prohibited.

PUBLIC DOMAIN MATERIAL

Any member may upload public domain programs to the Service. Any member may download public domain programs for their own use or non-commercially redistribute a public domain program. Member assumes all risks regarding the determination of whether a program is in the public domain.

CONTENT & USES OF THE SERVICE

Member agrees not to publish on or over the Service any information, software or other content which violates or infringes upon the rights of any others or which would be abusive, profane or offensive to an average person, or which, without the approval of CompuServe, contains any advertising or any solicitation to use goods or services. This paragraph, however, shall not be interpreted to restrict member from utilizing CompuServe Mail in the conduct of a legitimate business except that member may not, without the approval of CompuServe, send unsolicited advertising or promotional material.

Member agrees not to use the facilities and capabilities of the Service to conduct any business or activity or solicit the performance of any activity which is prohibited by law or to solicit members to become members of other competitive information services.

EDITING AND DELETING CONTENT

CompuServe reserves the right in its sole discretion to edit or delete any information, software or other content appearing on the Service, regardless of whether it violates the standards for content.

SERVICE TERMINATION

CompuServe reserves the right in its sole discretion to suspend or terminate Service to any member at any time.

INDEMNIFICATION

Member agrees to indemnify and hold CompuServe harmless from any claims and expenses, including reasonable attorney's fees, related to member's violation of the Service Agreement, including these rules or any information, software or other content placed on the Service by the member.

STANDARD PRICING PLAN

Multiple members of the same household may share a single User ID Number. However, only one person is authorized to access the Service at any given time on one User ID Number.

COMPUSERVE ON-LINE INFORMATION SERVICE AGREEMENT TERMS