Volume 11, Issue 1, pp 27-40, Knox

The Role of Novelty in a California Idea

Submission Case

William 0. Knox*


In California, a claim for breach of an implied-in-fact contract aris-

ing out of one party’s submission of an idea to another party raises

many intriguing issues. One of the most interesting issues revolves

around whether there is, or should be, any requirement that the submit-

ted idea be novel in order to support a claim; i.e., the idea be one that is

not already generally known or in use or, at least, is not known to the

recipient or in its trade. This issue cannot be easily understood and

requires clarification based on California Supreme Court and Court of

Appeal opinions dating back to the 1950s.



For purposes of this analysis, the following hypothetical scenario is


Assume that an individual with a passing acquaintance to a mana-

gerial employee of a corporate entity approaches that manager with an

idea which he represents, both verbally and in writing, to be unique and


Upon the disclosure of the idea, the manager realizes that the pur-

portedly “unique and original” idea is actually neither, because the con-

cept is either a generally known and used concept or is one that was

already being discussed in-house within the company.

* Mr. Knox is a 1985 graduate of the UCLA School of Law. Formerly a litigator concen-

trating in the area of general business litigation with particular emphasis on intellectual

property issues, he is presently General Counsel and Corporate Secretary of Fruit Growers

Supply Company. Special thanks to Ronald S. Rosen, Esq., for his support and guidance as

both a mentor and a friend.

28          UCLA ENTERTAINMENT LAW REVIEW                  [Vol. 11:1

Thereafter, the company informs the individual that it will not be

pursuing his idea. However, the company continues to pursue its own

concept or decides to pursue a similar project encompassing the same

generally known and used concept. The individual collects press re-

leases and other information regarding the company's plans for what he

views as the project he had proposed. After almost two years of re-

search, development and production, the company brings its project to

market. Immediately thereafter, the individual sues the company

under California law, claiming that it breached an implied-in-fact con-

tract with him.


In an action for breach of the alleged implied-in-fact contract

under California law, the plaintiff has the burden of establishing, by a

preponderance of the evidence, all of the facts necessary to prove each

of the following:

1) That the plaintiff submitted an idea to the company, which the

company received.

2) That before submitting his idea to the company, the plaintiff

clearly conditioned his disclosure upon the company's agreement to

pay for those of his ideas that the company used, if any.

3) That the company knew, or should have known, this condition

upon which the disclosure was being made before the disclosure was


4) That the company voluntarily accepted the submission on the

plaintiff's terms and thereby impliedly agreed to pay him the reason-

able value of any of his ideas it used.

5) That in producing the project, the company actually used plaintiff's

ideas; that is, that the project was based substantially upon the plain-

tiff's ideas rather than on the company's own idea(s) or those from

any other source(s).

6) That plaintiff's ideas that were used by the company had value.'

The reader should note that in setting forth the elements for a

breach of implied-in-fact contract claim under California law, there is

no mention of any required minimal characteristics for the idea to be

protectable by contract. As this article will show, however, that does

not mean that such required characteristics do not, or should not, exist.

1 See Mann v. Columbia Pictures, Inc., 180 Cal. Rptr. 522, 533 n.6 (Cal. Ct. App. 1982).




To begin an analysis of the role of novelty in an idea submission

case, one must consider first the California Supreme Court's decision in

Stanley v. Columbia Broadcasting System, Inc.2

In Stanley, the court stated as follows:

As a general observation from the cases, it may be stated that the

right of the originator of an idea to recover from one who uses or

infringes it seems to depend upon whether or not the idea was novel

and reduced to concrete form prior to its appropriation by the defen-

dant, and, where the idea was disclosed by the originator to the ap-

propriator, whether such disclosure took place under circumstances

indicating that compensation was expected if the idea was used.

Where these prerequisites exist, recovery may be had upon a theory

of contract implied in fact or in law.3

After noting the defendant's concession that the plaintiff's idea

was in concrete form, the majority dealt with the requirement of nov-

elty by stating that "[t]he next question to be discussed is whether or

not plaintiff’s idea as such was so new and novel as to be worthy of

protection.”’4 In so stating, the majority of the court acknowledged that

novelty plays an important role in idea submission cases.

It is, however, the dissent of Justice Traynor in Stanley that must be

reviewed to determine the role of novelty in an idea submission case.

Justice Traynor dissented in Stanley because, contrary to the majority,

he believed that the plaintiff’s idea was not novel as a matter of law. In

his dissent, Justice Traynor provided an exegesis on California law con-

cerning the protection of ideas by contract, whether novel or not. Re-

garding express contracts, he stated: “Even though the idea disclosed

may be ‘widely known and generally understood’ . . . , it may be pro-

tected by an express contract providing that it will be paid for regard-

less of its lack of novelty.”’5

In discussing implied contracts, Justice Traynor stated as follows:

An implied-in-fact contract differs from an express contract only in

that the promise is not expressed in language but implied from the

promisor’s conduct. It is not a reasonable assumption, however, in the

absence of an express promise, or unequivocal conduct from which

one can be implied, that one would obligate himself to pay for an idea

that he would otherwise be free to use. Even an express contract to

pay for ‘valuable information’ to be submitted by the plaintiff does

2 221 P.2d 73 (Cal. 1950).

3 Id. at 75 (citations omitted).

I Id. at 79.

5 Id. at 85 (citations omitted).


30          UCLA ENTERTAINMENT LAW REVIEW                  [Vol. 11:1

not carry the implication of a promise to pay if it is found upon dis-

closure to be common knowledge. If the idea is not novel, the evi-

dence must establish that the promisor agreed expressly or impliedly to

pay for the idea whether or not it was novel.6

Thus, both the majority opinion and Justice Traynor's dissenting

opinion in Stanley indicate that novelty is a required element in an idea

submission case asserting a claim for breach of an implied-in-fact con-

tract. Moreover, both opinions make clear that the plaintiff bears the

burden of proving (1) that by either express contractual language or

unequivocal conduct, the defendant agreed to pay for the idea even if it

is not novel or, in the alternative, (2) that the plaintiff's idea was, in

fact, novel.

In 1956, the California Supreme Court recognized that various

principles first enunciated in Justice Traynor's Stanley dissent "are ac-

cepted as the law of California."'7 Specifically, the Court in Desny

quoted the portion of Justice Traynor's dissent wherein he stated that

"[e]ven though the idea disclosed may be ‘widely known and generally

understood,’ it may be protected by an express contract providing that

it will be paid for regardless of its lack of novelty.”‘ Given the Desny

court’s adoption of Justice Traynor’s Stanley dissent, a non-novel idea

should only be protected where there is an express contract or where

the unequivocal conduct of the recipient of the idea makes it clear

that-even with full knowledge of the commonplace nature of the

idea-he or she nevertheless agrees to pay if the idea is used.

This central position of novelty in an idea submission case is fur-

ther supported by the California Supreme Court’s decisions in Kurlan

v. Columbia Broadcasting System, Inc.9 and Weitzenkorn v. Lesser,10

which were both decided on the same day.

In Kurlan, the plaintiff claimed to have “conceived, originated and

devised a new and original radio program idea and original untitled

radio program” in connection with which he “originated new program

techniques and methods of radio presentation, including a new radio

production format.”‘” The plaintiff also alleged that he “created a new

and original radio program which he submitted to the defendants in

return for their promise, express or implied, to pay ‘the reasonable

6 Id. at 85-86 (citations omitted) (emphasis added).

7 Desny v. Wilder, 299 P.2d 257, 266 (Cal. 1956) (citing Weitzenkorn v. Lesser, 256 P.2d

947, 957-58 (Cal. 1953)).

8 Desny, 299 P.2d at 266.

9 256 P.2d 962 (Cal. 1953).

10 256 P.2d 947 (Cal. 1953).

11 256 P.2d at 965.


value thereof’ if they used it.’12 In reversing the trial court’s judgment

sustaining the general demurrer of defendants, the court observed that

“[t]he pleading allows Kurlan to present evidence, if there be such,

tending to prove a promise, express or implied in fact, to pay for the

use of his program whether or not it is original.”’13

By its holding, the Court placed the burden of proof on the plain-

tiff as to whether the alleged promise to pay for use of the plaintiff’s

idea was unconditional. According to the court, “[t]he terms of the con-

tract and the content of the programs present questions of fact for the

jury as to the contractual provisions, access, similarity, and copying.”’14

Similarly, in Weitzenkorn, the court stated:

It is conceivable, even though improbable, that Weitzenkorn might

be able to introduce evidence tending to show that the parties en-

tered into an express contract whereby Lesser and Lesser Produc-

tions agreed to pay for her production regardless of its protectability

and no matter how slight or commonplace the portion which they

used. Such evidence, together with comparison of the productions,

would present questions of fact for the jury as to the terms of the

contract, access, similarity and copying.15

The court continued:

The only distinction between an implied-in-fact contract and an ex-

press contract is that, in the former, the promise is not expressed in

words but is implied from the promisor’s conduct. Under the theory

of a contract implied-in-fact, the required proof is essentially the

same as under the first count upon express contract, with the excep-

tion that conduct from which the promise may be implied must be


Based on the aforementioned cases, it is clear that a plaintiff in a

breach of implied-in-fact contract case bears the burden of proving that

the defendant agreed, either expressly or by its unequivocal conduct, to

pay for the use of the plaintiff’s idea, regardless of whether or not the

idea was novel.

If the plaintiff cannot meet this burden, however, he still has the

opportunity to persuade the jury that his idea actually is novel.17 As a

practical matter, allocating this burden to the plaintiff is appropriate

because, before the plaintiff’s actual disclosure, the defendant has no

12 Id. at 969-70.

13 Id. at 970.

14 Id. (emphasis added).

15 Weitzenkorn, 256 P.2d at 958.

16 Id. at 794; accord Chandler v. Roach, 319 P.2d 776, 781 (Cal. Ct. App. 1957) (“In our

opinion, the terms of the contract were for the jury to decide.”).

17 Stanley, 221 P.2d at 86 (“If the idea is not novel, the evidence must establish that the

promisor agreed expressly or impliedly to pay for the idea whether or not it was novel.”).


32          UCLA ENTERTAINMENT LAW REVIEW                [Vol. 11:1

idea as to what it is really being offered. Without such protection, a

defendant, such as in the above hypothetical, could be held liable even

though the idea was not novel and, in fact, was an idea it was pursuing

on its own. Under such circumstances, the plaintiff might receive a

windfall from the defendant without any agreement, express or implied,

by the defendant to pay for a non-novel idea.




Notwithstanding the foregoing California Supreme Court authori-

ties, the requirements for the plaintiff to prove his case have become

diluted in California due to the Court of Appeal, Second Appellate

District's decision in Chandler.28 In Chandler, the Court of Appeal re-

versed a judgment for the defendants.19 The court found that certain

jury instructions submitted by defendants and given to the jury by the

trial court were prejudicially erroneous.20 One of the instructions at

issue provided, in pertinent part, "If you find that Mr. Chandler's idea

of a public defender television series possessed novelty when submitted

to Mr. Roach, then, provided the idea also meets the requirement of

concreteness, the basis would exist for implying a contract to pay for

the idea."'2'

In concluding that the aforementioned jury instruction was preju-

dicially erroneous, the appellate court found "no reason to impose

blindly and automatically upon the implied-in-fact contract the ele-

ments which may be necessary to establish a property right."22 The

court's opinion further stated that "[t]here is nothing unreasonable in

the assumption that a producer would obligate himself to pay for the

disclosure of an idea which he would otherwise be legally free to use,

but which in fact, he would be unable to use but for the disclosure.”’23

Taken together, these two statements have seemingly eliminated the

novelty element from the implied-in-fact contract claim.

However, Chandler is diametrically opposed to Justice Traynor’s

statement in Stanley that “[i]t is not a reasonable assumption … in the

absence of an express promise, or unequivocal conduct from which one

can be implied, that one would obligate himself to pay for an idea that

18 Chandler v. Roach, 319 P.2d 776, 781 (Cal. Ct. App. 1957).

19 Id. at 783.

20 Id.

21 Id. at 779.

22 Id. at 783.

23 Id. at 781.


he would otherwise be free to use.”’24 Thus, despite their long history

of use as precedents in the courts of California, Chandler and its prog-

eny should be disapproved to the extent that they hold that novelty

plays no role in connection with a breach of implied-in-fact contract

claim, except with respect to the assertion of independent creation by a

defendant. Such reasoning should be rejected because (1) the Court of

Appeal in Chandler lacked the authority as an inferior court to over-

rule or otherwise modify the California Supreme Court’s decisions in

Stanley, Weitzenkorn, Kurlan, and Desny because, where there is a con-

flict between decisions of the Supreme Court and a Court of Appeal, a

lower court must disregard the Court of Appeal decision and accept the

Supreme Court decisions as controlling,25 and (2) as more fully dis-

cussed below, there was no reason for such a broad holding in


A careful analysis of its underlying facts reveals that Chandler is

akin to either (1) an express contract case or (2) the situation described

by Justice Traynor in Stanley wherein a party’s unequivocal conduct es-

tablishes an obligation to pay regardless of the idea’s lack of novelty.

Chandler was introduced to defendant Roach by an agent. After Chan-

dler prepared a script at Roach’s request, the parties circulated attor-

ney-prepared drafts of a written contract, which at the least amounted

to unequivocal conduct waiving the novelty requirement, if not the es-

tablishment, of an express rather than implied contract.26 Thus, the

court’s decision in Chandler should be limited to situations where the

necessity of novelty was waived by either the parties’ entry into an ex-

press agreement following the provision of an actual script to defendant

or the unequivocal post-disclosure conduct of the parties. This is so


[t]he doctrine of precedent, or stare decisis, extends only to the ratio

decidendi of a decision, not to supplementary or explanatory com-

ments which might be included in an opinion. To determine the prec-

edential value of a statement in an opinion, the language of that

statement must be compared with the facts of the case and the issues

24 Stanley, 221 P.2d at 85.

25 See Auto Equity Sales, Inc. v. Superior Court of Santa Clara County, 369 P.2d 937, 939-

40 (Cal. 1962).

26 Chandler, 319 P.2d at 778; see also Blaustein v. Burton, 88 Cal. Rptr. 319, 325 (Cal. Ct.

App. 1970) (reversing summary judgment for defendants on the basis of uncontroverted

evidence that after disclosure on the “idea,” counsel for certain of the defendants had in-

formed plaintiff that “under any conditions … there would be a reward for [plaintiffs']

contribution to the project”).



raised. Only statements necessary to the decision are binding prece-

dents; explanatory observations are not binding precedent.27

A limited reading of Chandler is the proper one and is consistent

with Justice Traynor’s dissent in Stanley, and the principles extant in

Kurlan and Weitzenkorn.28

27 W. Landscape Constr. v. Bank of Am. Nat’l Trust and Sav. Ass’n, 67 Cal. Rptr. 2d 868,

870 (Cal. Ct. App. 1997); see also Brown v. Kelly Broad. Co., 771 P.2d 406, 420 (Cal. 1989)

(quoting prior Court of Appeal authority for the proposition that “the language of an opin-

ion must be construed with reference to the facts presented by the case, and the positive

authority of a decision is coextensive only with such facts”) (citations omitted)).

I In Ronald Caswell, Comment, A Comparison and Critique of Idea Protection in Cali-

fornia, New York and Great Britain, 14 Loy. L.A. INT’L & COMP. L. REV. 717, 737-38 (July

1992), the commentator asserts as follows:

Although California appellate court decisions set precedent only for courts below them,

the California Supreme Court arguably adheres to this approach. The parties in Chan-

dler and Ziv both appealed, and each time the California Supreme Court denied the

petitions for rehearing. While this is not dispositive, it gives added significance to the

appellate decisions. It suggests that the California Supreme Court approves of these de-

cisions, because twice it has had the opportunity to clarify the law and has declined to do


This assertion goes too far. To assert that decisions of the California Supreme Court may be

overruled by the court’s denial of petitions to it in other cases involving the same potential

legal issues is a dangerous proposition, especially without any analysis of the factual and

procedural postures of the cases or analysis of the actual issues on which the California

Supreme Court was petitioned by the parties. As noted above, in Chandler, the facts are

such that when properly read, the case fits within the dictates of prior California Supreme

Court opinions. Further, the issues on which the parties might have sought review by the

California Supreme Court are not set forth in the court’s denial. As regards Donahue v. Ziv

Television Programs, Inc., 54 Cal. Rptr. 130 (Cal. Ct. App. 1966), the procedural posture was

such that a new trial for the defendant company was affirmed by the Court of Appeal and,

therefore, the California Supreme Court might have regarded the issues on which it was

petitioned not to be ripe for its review until after the retrial. Further, the facts in Donahue

were similar to those in Chandler because there was post-disclosure conduct from which one

could conclude that the party’s unequivocal conduct established an obligation to pay regard-

less of the idea’s lack of novelty. Moreover, the Court of Appeal in Donahue specifically

noted that “[a]lthough underwater photography was by no means novel in 1955, the idea of a

television series featuring such photography, together with use of diving equipment in an

adventure series could be found to have been original.” Id. at 134. Thus, the California

Supreme Court may have denied the petition because the facts of the case would not support

a reversal even if it were to hold that novelty was a required element of the plaintiffs’ case.

It is this uncertainty regarding the basis for the Court’s denial of a petition for review that

gives rise to the general rule that denial of a petition is not to be taken as an expression of

approval of the propositions of law discussed in the appellate court’s opinion. See, e.g., Peo-

ple v. Triggs, 506 P.2d 232, 236 (Cal. 1973), overruled on other grounds by 587 P.2d 706 (Cal.

1978); People v. Davis, 81 P. 718, 720 (Cal. 1905); CAL. CIv. PROC. § 28 advisory committee’s


[Vol. 11:1




Of those jurisdictions that have considered the issue, a majority

require a showing of novelty in order to enforce an implied-in-fact con-

tract to pay for the submission of an idea.29

Murray is particularly interesting to entertainment industry enti-

ties. The plaintiff alleged that those involved in the production and

broadcast of The Cosby Show had used an idea which he had submitted

to NBC in the form of a two page proposal.30 The plaintiff's idea was

to produce a television series featuring Bill Cosby as the father of a

29 See, e.g., Murray v. Nat'l Broad. Co., 844 F.2d 988 (2d Cir. 1988), cert. denied, 488 U.S.

955 (1988) (noting that there can be no viable breach of implied-in-fact contract claim for a

non-novel idea); Ball v. Hershey Foods Corp., 842 F. Supp. 44 (D. Conn. 1993), affd mem.

14 F.3d 591 (2d Cir. 1993) (holding that, based on a clear consensus of courts that have

considered the issue, Connecticut law would require an idea to be novel and concrete as

elements for claim of breach of implied-in-fact contract); Smith v. Recrion Corp., 541 P.2d

663, 665 (Nev. 1975) (stating that "[g]enerally, abstract ideas will not be protected without a

showing of ‘concreteness’ and ‘novelty”‘ in a case asserting claims for, inter alia, breach of

express contract and breach of implied contract); Burgess v. Coca-Cola Co., 536 S.E.2d 764,

768 (Ga. Ct. App. 2000) (“To survive summary judgment on a claim for wrongful appropria-

tion of … an unpatented or unpatentable idea or product, a plaintiff must adduce some

evidence from which a jury may infer the existence of each of these essential elements:

(1) the idea must be novel; (2) the disclosure of the idea must be made in confidence; (3) the

idea must be adopted and made use of by the defendant; and (4) the idea must be suffi-

ciently concrete in its development to be usable.”) (internal quotations omitted) (citations

omitted); Tate v. Scanlan Int’l, Inc., 403 N.W.2d 666, 671 (Minn. Ct. App. 1987) (“In order

for an abstract idea to be the subject of an express or implied contract or to be otherwise

protected by the law, it must be novel and concrete.”); Johnson v. Benjamin Moore & Co.,

788 A.2d 906, 915 (N.J. Super. Ct. App. Div. 2002) (holding that the trial judge correctly

relied on a prior Law Division opinion in listing novelty as a prerequisite for relief in New

Jersey); Garrido v. Burger King Corp., 558 So. 2d 79 (Fla. Dist. Ct. App. 1990) (finding that

under Florida law, novelty is a required element in a breach of implied contract action filed

by an advertising agency asserting that Burger King used its idea for an advertisement);

Downey v. Gen. Foods Corp., 286 N.E.2d 257, 259 (N.Y. 1972) (stating that “when one

submits an idea to another, no promise to pay for its use may be implied, and no asserted

agreement enforced, if the elements of novelty and originality are absent, since the property

right in an idea is based upon these two elements”); Ed Graham Prods., Inc. v. Nat’l Broad.

Co., Inc., 347 N.Y.S.2d 766, 769 (N.Y. Sup. Ct. 1973) (stating that ideas that are not novel

“‘are in the public domain and may freely be used by anyone with impunity”); Lionel S.

Sobel, The Law of Ideas, Revisited, 1 UCLA ENT. L. REV. 9, 57 (1994) (stating that the

novelty requirement for protection by implied contract is the law in most states whose courts

have considered the issue). But see Reeves v. Alyeska Pipeline Servs. Co., 926 P.2d 1130,

1141 (Alaska 1996) (discussing the California Supreme Court’s preference for the California

approach as articulated in Chandler over the New York approach, and holding that novelty

is not a required element in an implied-in-fact contract claim); Wrench LLC v. Taco Bell

Corp., 256 F.3d 446, 460 (6th Cir. 2001) (concluding that “the district court erred in finding

that Michigan law requires novelty in a contract-based claim”); MELVILLE B. NIMMER &

DAVID NIMMER, NIMMER ON COPYRIGHT § 16.08[B] at 16-58 to 16-66 (1978).

30 Murray, 844 F.2d at 989-90.


36          UCLA ENTERTAINMENT LAW REVIEW                    [Vol. 11:1

closely-knit black family with a wife and five children.31 The show was

to be set in a "contemporary urban setting" and "combine humor with

serious situations in a manner similar to the old Dick Van Dyke

Show."'32 Four years after NBC advised the plaintiff that it was not

interested in pursuing his proposal, The Cosby Show began a successful

run on NBC starring Bill Cosby.33 The Second Circuit affirmed the

district court's dismissal of plaintiff's case on summary judgment and


Our review of New York intellectual property law leads us to the

inescapable conclusion that the district court did not err in deciding

that there was no material issue of fact as to the novelty of plaintiff's

proposal. In our judgment, the basic premise underlying the concept

of novelty under New York law is that special protection is afforded

only to truly innovative ideas while allowing the free use of ideas that

are 'merely clever or useful adaption[s] of existing knowledge.’ In

this case, the record indicates that plaintiff’s idea for a situation com-

edy featuring the non-stereotypical portrayal of a black family simply

was not uniquely plaintiff’s creation.34

In 1993, the Court of Appeals of New York further discussed the

issue of novelty in idea submission cases. In Apfel v. Prudential-Bache

Securities, Inc.,35 the court noted that novelty is not required in all cases

involving disclosure of ideas.36 The court then discussed the difference

between the facts involved in cases like Downey v. General Foods

Corp.,37 where a “buyer and seller contract for disclosure of the idea

with payment based on use, but no separate postdisclosure contract for

use of the idea [having] been made,” and those involved in the case

then before it.3s Regarding the Downey situation, the Court noted:

Such transactions pose two problems for the courts. On the one

hand, how can sellers prove that the buyer obtained the idea from

them, and nowhere else, and that the buyer’s use of it thus constitutes

misappropriation of property? Unlike tangible property, an idea

lacks title and boundaries and cannot be rendered exclusive by the

acts of the one who first thinks it. On the other hand, there is no

equity in enforcing a seemingly valid contract when, in fact, it turns

out upon disclosure that the buyer already possessed the idea. In

such instances, the disclosure, though freely bargained for, is mani-

festly without value. A showing of novelty, at least novelty as to the

31 Id. at 990.

32 Id.

33 Id. at 989.

34 Id. at 995 (citations omitted).

31 616 N.E.2d 470 (N.Y. 1993).

36 Id. at 477.

37 286 N.E.2d 257 (N.Y. 1972).

38 Apfel, 616 N.E.2d at 477-78.

2004]                THE ROLE OF NOVELTY                            37

buyer, addresses these two concerns. Novelty can then serve to es-

tablish both the attributes of ownership necessary for a property-

based claim and the value of the consideration-the disclosure-nec-

essary for contract-based claims.39

The Court found that the Apfel case presented a different factual

situation, in which the concerns regarding a Downey-type fact pattern

did not exist. The Court stated:

Defendant does not claim that it was aware of the idea before plain-

tiffs disclosed it but, rather, concedes that the idea came from them.

When a seller’s claim arises from a contract to use an idea entered

into after the disclosure of the idea, the question is not whether the

buyer misappropriated property from the seller, but whether the idea

had value to the buyer and thus constitutes valid consideration. In

such a case, the buyer knows what he or she is buying and has agreed

that the idea has value, and the Court will not ordinarily go behind

that determination. The lack of novelty, in and of itself, does not

demonstrate a lack of value. To the contrary, the buyer may reap

benefits from such a contract in a number of ways-for instance by

not having to expend resources pursuing the idea through other chan-

nels or by having a profit-making idea implemented sooner rather

than later. The law of contracts would have to be substantially re-

written were we to allow buyers of fully disclosed ideas to disregard

their obligation to pay simply because an idea could have been ob-

tained from some other source or in some other way.40

Following Apfel, many decisions of the trial and intermediate ap-

pellate courts of New York have reiterated the novelty requirement. In

Oasis Music, Inc. v. 900 U.S.A., Inc.,41 the court granted summary judg-

ment for the defendants and dismissed the complaint alleging breach of

contract, breach of confidential and fiduciary relationship, breach of

implied covenant of good faith and fair dealing, misappropriation of

idea, unjust enrichment, and fraudulent misrepresentation in connec-

tion with the plaintiff’s idea for an interactive telephone game.42 The

court found that evidence submitted by the defendants demonstrated

that plaintiff’s ideas lacked the requisite novelty.43 Specifically, the

court found that defendants’ evidence showed that at the time plaintiff

submitted its idea to the defendants, non-trivia-based interactive games

already existed, the concept of sound effects was already introduced

and operating in interactive games, and that plaintiff failed to demon-

strate its skip logic idea “was a novel idea and not a mere adaptation or

39 Id. at 478.

40 Id. (citation omitted).

41 614 N.Y.S.2d 878 (N.Y. Sup. Ct. 1994).

42 Id. at 880.

43 Id. at 884.

38          UCLA ENTERTAINMENT LAW REVIEW                  [Vol. 11:1

natural progression of the concept of linear plot sequence which was in

existence at the time of its proposal.""44

Likewise, in Marraccini v. Bertelsmann Music Group, Inc.,45 the

Appellate Division of the Supreme Court of New York affirmed the

trial court's grant of defendants' motions to dismiss the complaint for

failure to state a cause of action.46 The plaintiff alleged that she had

met with an officer of defendant, Bertelsmann Music Group, Inc.

("BMG"), to discuss her idea for a new cable music channel to market

artists and have them promote music and merchandise in connection

with home shopping.47 The plaintiff further alleged that the defendant

expressed interest in the idea, which led her to prepare and submit a

written proposal nine months later.48 The plaintiff claimed that before

submitting the written proposal, she had entered into an oral contract

with BMG requiring confidentiality and compensation should her pro-

posal be used.49 BMG allegedly expressed continuing interest in plain-

tiff's idea, "explaining that it had 'been in [the] process of aggressively

looking at the cable industry and the home shopping business as poten-

tial areas of expansion for [BMG].’”50 Thereafter, BMG announced a

joint venture with a co-defendant company to form a music video cable

television channel with a home shopping element1.5 Defendants, how-

ever, later announced that they were not going to proceed with the

joint venture.52

Affirming the trial court’s dismissal of the complaint, the appellate

division held:

[T]he documentary evidence indisputably indicates that the concept

for a music video cable television channel, with the marketing of as-

sociated merchandise by means of home shopping, was an idea preex-

isting in the public domain prior to 1992 and that plaintiff’s proposal

was a creative variation on this theme. Accordingly, Supreme

Court’s reliance upon Downey was in all respects proper.53

Thus, the law of New York, as set forth in Apfel and cases follow-

ing it, is consistent with the law of California, as it should be, pursuant

to Stanley and its progeny prior to the misdirection of Chandler. Spe-

cifically, a plaintiff is not required to prove novelty only where there is

44 Id. at 883.

41 644 N.Y.S.2d 875 (N.Y. App. Div. 1996).

46 Id. at 876.

47 Id.

48 id.

49 Id.

50 Id.

51 Id.

52 Id.

53 Id. at 877 (citations omitted).


(1) a pre-disclosure contract expressly waiving novelty, (2) a post-dis-

closure contract entered into after the buyer has had time to evaluate

the idea,54 or (3) unequivocal conduct by the parties from which an

express waiver can be implied.

By admitting that an error was made in Chandler and in the Court

of Appeal decisions that followed it, California would (1) recognize the

primacy of California Supreme Court decisions over Court of Appeal

decisions, (2) properly apply the doctrine of stare decisis reinstating the

principles of Stanley, Kurlan and Weitzenkorn, and (3) rejoin the major-

ity view regarding the role of novelty in idea submission cases. After

over 40 years, this certainly is a justified and worthwhile goal.

In fact, in an unpublished opinion affirmed by the Ninth Circuit,

the United States District Court for the Central District of California,

the Judge Wm. Matthew Byrne, Jr. ignored the long existing problems

created by Chandler and recognized the continuing viability of novelty

as an element in an idea submission case.55 In his Order Granting De-

fendants’ Motion for Summary Judgment, Judge Byrne stated:

In order for plaintiff to demonstrate sufficient similarities between

the two works, the ideas allegedly used by defendants must also be

novel. The California Supreme Court has held that novelty is re-

quired in implied-in-fact contract cases, unless it can be inferred from

“unequivocal conduct” that the recipient of the idea agreed to pay for

it even if the idea was not novel.56

It is appropriate to require a plaintiff to bear the burden of proving

either that his idea is novel or that the recipient waived the novelty

requirement by express agreement or unequivocal conduct. Before dis-

closure, only the disclosing party knows what idea will be disclosed and

whether or not it is novel. On the other hand, the recipient has very

little or no information. At this point, prior to disclosure, the disclosing

party may make his deal with the recipient party.

As in Chandler and Apfel, if the recipient remains interested in the

idea-whether it be novel or not-after its disclosure, there will likely

be a course of conduct between the parties that the plaintiff can use to

establish the unequivocal conduct required to show the recipient’s

waiver of the novelty requirement.

54 This coincides with the facts of Apfel where there was a post-disclosure contract and

actual payment under its terms for a period of more than two years. See Apfel, 616 N.E.2d at


55 See Green v. Schwarzenegger, CV 93-5893-WMB, 1995 U.S. Dist. LEXIS 14031 (C.D.

Cal. July 11, 1995), affd, 1997 U.S. App. LEXIS 3921 (9th Cir. Feb. 28, 1997).

56 Green, 1995 U.S. Dist. LEXIS 14031, at *37 (citing Stanley, 221 P.2d at 85).


40          UCLA ENTERTAINMENT LAW REVIEW                [Vol. 11:1


In applying the law of Stanley, Kurlan and Weitzenkorn to the hy-

pothetical proposed at the beginning of this article, it is evident that the

discloser’s own representations have arguably destroyed any possibility

for him to prove either an express contract or an implied contract

whereby the parties, by their “unequivocal conduct,” have waived nov-

elty as a requirement. In fact, the individual who disclosed his idea

seems to have affirmatively made novelty a term of the parties’ implied

contract or a condition precedent to the recipient’s obligation to pay for

use of the disclosed idea.

However, if the parties thereafter engage in post-disclosure com-

munications and activities as in Chandler and Apfel, a question of fact

may arise regarding waiver of the novelty requirement by such conduct.

Such a factual situation may be handled through appropriate jury in-

structions regarding the necessity of “unequivocal” conduct to effectu-

ate a waiver of the novelty requirement and, thus, may level the playing

field between plaintiffs and defendants.


The courts of California should now recognize the continuing vital-

ity of Stanley and its California Supreme Court progeny while rejecting

the misstep caused by the Chandler decision. Therefore, absent an ex-

press agreement or “unequivocal conduct” waiving novelty, novelty

should once again become an element for the plaintiff to prove in a

breach of implied-in-fact contract case. Such a change would bring the

law regarding idea-based claims into conformity in the entertainment

centers where they most frequently arise: namely, New York and Cali-

fornia. In so doing, both idea disclosers and recipients would have

some additional security in their dealings, and the doors may open a

little wider in favor of disclosers since recipients would have more de-

fined protections against claims based on the mere disclosure of a non-

novel idea.

Volume 11, Issue 1, pp 41-82, Kurzer

Who Has the Right to Edit a Movie?: An

Analysis of Hollywood’s Efforts to Stop

Companies from Cleaning up Their

Works of Art

Michael Kurzer*


I. INTRODUCTION  …………………………………….    42


A.  “Soft-Copy” Editing …………………………….   45

B.  “Playback” Editing …………………………….   46



A. False Designation of Origin-A Likelihood of

Confusion ……………………………………..   48

B. False Advertising-Misattribution of Work ………..       53

C . D ilution  ……………………………………….  55

D. The Lanham Act Case against the “Playback”

E ditors ………………………………………..  60

IV. COPYRIGHT INFRINGEMENT …………………………           60

A . Standing to  Sue  ………………………………..  61

B. Violation of Reproduction and Distribution Rights …       65

C. Violation of Right to Prepare Derivative Works ……      66

D. Contributory Infringement and Vicarious Liability …       71

E . Fair Use  ……………………………………….  72

* J.D. Candidate UCLA School of Law, 2004; B.S. (Mechanical Engineering) Georgia

Institute of Technology, 1997. Prior to law school, Mr. Kurzer was a product engineer for

Hewlett Packard. In Fall 2004, he plans to join the Intellectual Property Group at Milbank,

Tweed, Hadley & McCloy LLP in New York. He wishes to express heartfelt thanks to

Professor Bernard Gold, who provided invaluable advice with regard to this Comment. The

conclusions are solely those of the author, however, and any errors or omissions are attribu-

table to him alone.

42          UCLA ENTERTAINMENT LAW             REVIEW       [Vol. 11:1

1. Purpose and Character of the Use ...............     73

2. The Nature of the Copyrighted Work ...........       74

3. The Amount and Substantiality of the Portion

U sed ............................................. 75

4. The Effect on the Market Value .................     75

5. Beyond the Usual Fair Use Factors ..............     76

F. Moral Rights and Substitutes .........................   78

V . CONCLUSION   .............................................  81


In August 2002, a small company based in Pleasant Grove, Utah

issued a press release. The press release publicized its nationwide de-

but of a service providing a "family friendly alternative" for watching

PG-13 and R-rated movies.1 The company, CleanFlicks, creates "E-

rated" versions of Hollywood movies by editing out nudity, sexual situ-

ations, profanity, offensive language, and graphic violence from DVDs

and videocassettes.2

The "E-rated" movies provide an alternative to people who want

to avoid what they perceive as an overabundance of profanity, sex, and

violence in Hollywood movies.3 The edited movies have become popu-

lar in Utah, where many viewers have avoided watching PG-13 and R-

rated movies because of scenes they find objectionable.4 The option of

watching edited movies is also appealing to parents who want to watch

R-Rated movies with their children or ensure that the movies they rent

or buy for their children are appropriate.5 The editors say that viewers

have a right to skip parts of a movie, just as a reader might skip parts of

a book.6

1 Press Release, MyCleanFlicks, Family Entertainment Revolution - Nationwide Debut

of E-Rated DVD Movie Rentals - Edited or Cleaned Up Movies Take Center Stage Again

(Aug. 6, 2002), available at 8/6/02 Business Wire 08:04:00.

2 Id.

3 Pete Howell, Return of the Zombie Censors - Directors Angry as Service Snips Films'

Offending Parts, TORONTO STAR, Sept. 29, 2002, at D2.

4 "In 1998, a video shop in American Fork, Utah, clipped a nude scene from its copies of

'Titanic,' eliminating what for its many Mormon customers was the only reason not to watch

the movie." Larry Williams, Sanitized For Your Protection; Companies Make a Profit Clean-

ing Up Hollywood's Act, HARTFORD COURANT, Sept. 20, 2002, at Dl, republished at Clean-

ing Up Hollywood - Sanitized Tapes, DVDs Have Directors Crying Foul, CHI. TRIB., Oct. 1,

2002, at 3.

5 Id.

6 See Trilogy's Countercl. in Huntsman v. Soderbergh, Civ. No. 02-M-1662 (MJW) (D.

Colo. filed Dec. 23, 2002).


The editing has drawn sharp criticism from Hollywood directors

and representatives of the Directors Guild of America ("DGA").7 The

directors insist that the right to edit a movie should be reserved to those

people who created the movie.8 They believe it is "wrong" to represent

to the public that the edited movies are the director's work. Some di-

rectors have drawn analogies to ripping pages out of a book and selling

it with the original author's name, or defacing a Van Gogh painting.9

The directors claim that companies that edit movies or supply the

means for doing so are more interested in turning a profit than protect-

ing principles of morality.10 The national executive director of the

DGA called the editing "a direct frontal assault on all aspects of owner-

ship and creativity."'"

Anticipating a lawsuit from the directors, CleanFlicks and Robert

Huntsman, an Idaho attorney with a patent pending in movie editing

technology, filed suit jointly in federal district court against sixteen

prominent Hollywood directors.12 They sought a declaratory judgment

to clarify that their business of making unauthorized edited versions of

major studio release movies is legal.'3 The Directors Guild of America

responded by filing a motion to intervene on behalf of the directors.14

The DGA also sought to broaden the scope of the lawsuit by joining

twelve additional companies engaged in the business of editing mov-

ies.'5 The counterclaim asserted that the "third party editors" were in

violation of the Lanham Act, a federal law that prohibits false designa-

tions of origin, false descriptions, and dilution of famous marks.'6 In

addition, the DGA filed a motion to bring the movie studio copyright

7 See Williams, supra note 4.

8 Id.

9 Id.; see also Bob Baker, Are These Videos Rated C for Clean or Compromised? Directors

Rail Against Firms Such as CleanFlick[s] That Excise Offensive Language and Scenes With

Sex or Violence, L.A. TIMES, Oct. 14, 2002, at El (quoting Steven Soderbergh, a vice presi-

dent of the Directors Guild of America, as saying “Would anyone even attempt to defend

ripping pages out of a book, leaving the author’s name on it and selling it?”).

10 Greg Hernandez, DGA Returns Fire in Film Editing Suit; Cleanflicks’ Editing ‘Wrong,’

L.A. DAILY NEWS, Sept. 21, 2002, at B1 (quoting Martha Coolidge, President of the Direc-

tors Guild of America). “It is wrong to circumvent the studios, who are the copyright hold-

ers, and the director, who is the film’s creator – all in the name of turning a profit.” Id.

(quoting Martha Coolidge ).

11 Baker, supra note 9.

12 Id.; Plaintiff’s Original Compl. in Huntsman v. Soderbergh, Civ. No. 02-M-1662 (MJW)

(D. Colo. filed Aug. 29, 2002).

13 Id.

14 DGA’s Countercl. in Huntsman v. Soderbergh, Civ. No. 02-M-1662 (MJW) (D. Colo.

filed Sept. 20, 2002).

15 Id.

16 Id.; see 15 U.S.C. § 1125(a) (2002) and 15 U.S.C. § 1125(c) (2002). The DGA also as-

serted a violation of California law prohibiting unfair competition. See DGA Counterclaim,


44           UCLA ENTERTAINMENT LAW REVIEW                   [Vol. 11:1

owners into the suit.17 The studios were relatively quiet on the issue,

but ultimately responded by filing a copyright infringement suit against

the third party editors."'

Bob Baker most appropriately phrased the question in this case in

the title of his September 2002 Los Angeles Times article, "Who Can

Edit a Movie?"'19 This Comment answers Mr. Baker's question under

the framework of trademark and copyright law. The Comment also

examines the areas in which the law falls short of protecting the inter-

ests of both Hollywood directors and viewers who want more control

over what they view in their homes. Part II of this Comment describes

the ways in which the third party editors have edited movies. It divides

the editors into two categories: those who make edited copies on video-

cassettes and DVDs, and those who manufacture a device which edits

the movie while it is being watched at home. Part III addresses poten-

tial claims of unfair competition, including evidence of likelihood of

confusion, false advertising, and dilution of famous marks under the

Lanham Act. Part IV discusses the implications of copyright law on

unauthorized third party editing. It highlights the fact that directors do

not have standing to sue on behalf of the copyrights in their movies

because they are not authors under the statutory definition of "works

made for hire." This section then analyzes the movie studios' case for

copyright infringement against the third party editors. It examines the

case under the doctrine of fair use, eventually concluding that editing

by third parties should not be protected as a fair use. Finally, the sec-

tion discusses the status of moral rights of authorship in the United

States and examines contractual obligations between the directors and

the movie studios and how these obligations factor into the right to edit

movies. Part V concludes that directors are not likely to receive an

injunction against third party editors under the Lanham Act. It is up to

the movie studios, which own the movie copyrights, to decide if third

supra note 14. The state claim is not discussed in this Comment, because it sufficiently over-

laps the analysis under the Lanham Act.

17 DGA Mot. to Join Studios in Huntsman v. Soderbergh, Civ. No. 02-M-1662 (MJW) (D.

Colo. filed Sept. 20, 2002).

18 Michael Cieply, Studios Go on Offensive Against Film Sanitizers Companies Are Ex-

pected to Mount an Assault on Firms that Alter Movies to Clean Them Up, L.A.TIMES, Dec.

13, 2002, at Cl. See Answer to Second Am. Compl. and Countercl. by studios in Huntsman

v. Soderbergh, Civ. No. 02-M-1662 (MJW) (D. Colo. filed Dec. 13, 2002). The studios' coun-

terclaim also included a charge of trademark infringement and unfair competition under the

Lanham Act which parallel the directors' Lanham Act claims. Id. This Comment focuses on

the director's Lanham Act claims and the studio's copyright infringement claims.

19 Bob Baker, Who Can Edit a Movie? Directors Guild Files Suit; Dispute: Companies

That Delete What They Describe as Objectionable Material from Videos and DVDs Violate

Copyright Law, Say the Filmmakers, L.A. TIMES, Sept. 21, 2002, at Fl.


party editing should continue. Finally, this section suggests a solution

that could provide directors the opportunity to protect the integrity of

their artistic vision while allowing people who watch movies the free-

dom to watch what they feel comfortable with at home.


There are two distinct ways in which third party editors have ed-

ited movies. This Comment identifies these two editing methods as

"soft-copy" editing and "playback" editing.20 Neither method involves

physically altering the original DVD or videocassette.21

A. "Soft-Copy" Editing

The soft-copy editing method involves copying the movie onto a

computer hard drive and editing it with software, or using a computer

or editing board to enact the edits while copying the movie onto an-

other tape or digital storage device.22 The resulting edited movie is

copied back onto an original lawfully purchased videocassette or

burned onto a blank DVD-R and then resold in the original videocas-

sette or DVD packaging to a home user.23

Companies engaged in soft-copy editing claim that since the edited

copies are only replacing lawfully purchased copies, the distributors of

the movies are unharmed.24 Distributors still receive the income from

the sale of the movies used to make the edited copies for the home

users. The third party editor charges a premium of sometimes 100%

over the original purchase price for the editing work.25 In one variation

of soft-copy editing, people can send previously purchased movies on

20 The name "soft-copy" editor is nomenclature created for this Comment, based on the

fact that this form of editing involves making a copy. The name "playback" editing is how

this Comment describes editing that becomes effective during the actual viewing of the

movie. The actual "playback" edit lists are created by the playback editors before the home-

user watches the movie.

21 A third possible way of editing movies, which does not involve making a reproduction

of a movie, is to physically alter the disc or videocassette.

22 See generally http://www.cleanflicks.com (last visited Jan. 14, 2004); Williams, supra

note 4. The companies classified as "soft-copy" editors are: CleanFlicks, MyClean-

Flicks.com, CleanCut Cinemas, OK Inc., Family Safe Media, EditMyMovies, Family Flix,

USA LLC, and Play It Clean Video.

23 "It's done electronically to a copy of the film, which is recorded onto the original video-

cassette or burned onto a DVD-R inserted into the original package." Williams, supra note

4. The DGA also asserts that the "soft-copy" editors create a master copy when they edit a

movie and use the master to make copies on videocassettes and DVDs. See DGA Am.

Countercl. in Huntsman v. Soderbergh, Civ. No. 02-M-1662 (MJW) (D. Colo. filed Sept. 20,


24 Williams, supra note 4.

25 Id. The prices are listed on http://www.cleanflicks.com (last visited Jan. 14, 2004).


46           UCLA ENTERTAINMENT LAW REVIEW                     [Vol. 11:1

DVD or videocassette to an editor who edits the movie for a service fee

and places an edited copy back on the original videocassette or on a

DVD-R.26 One company that rents edited movies claims that the rent-

ers are owners of the videocassettes collectively under a co-op arrange-

ment and, thus, have a right to edit them.27

B. "Playback" Editing

Playback editing is accomplished by a third party editor watching a

movie, creating an indexed list of the places where edits should take

place, and indicating the times in the movie when the objectionable

scenes appear.28 This type of editing has also been called "masking."'29

The index of edit-points is accessed from a device that the home user

purchases from the third party editor, and the device temporarily

blanks the picture or drops the volume during the objectionable mo-

ments when the movie is played.30 This type of editing provides the

advantage of preserving the original movie on the DVD or videocas-

sette and does not involve making a permanent copy of the movie.

The devices can be incorporated into a DVD player or VCR, or

they can be sold independently to be hooked in between a DVD player

or VCR and a television.31 Some versions of these devices have been

sold as software programs that perform the edits while playing a DVD

on the DVD drive of a home computer.32

More sophisticated versions of these devices digitally replace

images in a movie.33 One company who produces a playback editing

26 Williams, supra note 4; see also http://www.cleanflicks.com (last visited Jan. 14, 2004).

27 Williams, supra note 4; see also http://www.mycleanflicks.com (last visited Jan. 14,


28 Williams, supra note 4; see also http://www.moviemask.com (last visited Jan. 14, 2004);

http://www.clearplay.com (last visited Jan. 14, 2004).

29 See Trilogy's Reply and Countercl. in Huntsman v. Soderbergh, Civ. No. 02-M-1662

(MJW) (D. Colo. filed Dec. 23, 2002).

30 Companies who would be classified as "playback" editors are as follows: ClearPlay,

Family Safe Media's TV Guardian, Trilogy's MovieMask, and Family Shield Technologies'

MovieShield. Idaho attorney, Robert Huntsman has a patent pending for "playback" edit-

ing technology.

31 Williams, supra note 4; see also http://www.familysafemedia.com (last visited Jan. 14,


32 See http://www.clearplay.com (last visited Jan. 14, 2004).

33 Trilogy demonstrated their MovieMask device for Hollywood directors. "A sword fight

from The Princess Bride (1987) was altered so it looked like the characters were using Star

Wars light sabers. The scene from Titanic (1997) of Leonardo DiCaprio sketching a nude

Kate Winslet has been altered by covering her with a digital corset." Rick Lyman, 'Sani-

tized' Movies Make Hollywood Ill, S. FLA-SUN SENTINEL, Sept. 29, 2002, at 1G.


device has reportedly signed a deal to place product advertisements

into edited movies.34



The Lanham Act is the federal counterpart to the common law

doctrine of unfair competition.35 It provides a federal cause of action

for "two major and distinct types of 'unfair competition': (1) infringe-

ment of even unregistered marks, names and trade dress, and (2) 'false

advertising."'36 Traditionally the Lanham      Act provides protection for

trademark infringement, but the provisions have also been interpreted

to provide a cause of action for authors who have been improperly


There are at least three distinct ways in which the conduct of the

third party editors can be actionable under the Lanham Act. First, the

soft-copy editors are selling the edited movies in the original packaging.

This packaging may cause consumers to think that the directors or

movie studios have endorsed or created the edited versions. It may

also cause consumers to mistakenly purchase the edited versions. The

34 Id. "And if the directors are upset about what they have seen so far, they probably will

not like to hear that MovieMask just signed a contract with a product-placement company to

insert products into existing films, perhaps even region by region." Id.


tion 43(a) of the Lanham Act has created a broad federal remedy against unfair competi-

tion." Id. The statute provides:

Any person who, on or in connection with any goods or services, or any container for

goods, uses in commerce any word, term, symbol, or device, or any combination thereof,

or any false designation of origin, false or misleading description of fact, or false or mis-

leading representation of fact, which (A) is likely to cause confusion, or to cause mistake,

or to deceive as to the affiliation, connection, or association, of such person with another

person, or (B) in commercial advertising or promotion, misrepresents the nature, charac-

teristics, qualities, or geographic origin of his or her or another person's goods, services,

or commercial activities, shall be liable in a civil action by any person who believes that

he or she is likely to be damaged by such act.

Section 43(a), 15 U.S.C. § 1025(a) (1988).


27:32 (4th ed. 2002). Although the word competition appears in the term "unfair competi-

tion," with the exception of the Seventh, Ninth, and Tenth Circuits, the courts have not

required a plaintiff and defendant to be in direct competition in order to have standing to

sue under the Lanham Act. Id.

37 GILSON, supra note 35, at § 7.02 [6][d] (“[Wihen a performer or creative artist is mis-

credited-not mentioned in connection with his own work or credited for work not his

own-an action may lie under Section 43(a)."); see also Gilliam v. ABC, 538 F.2d 14, 24 (2d

Cir. 1976) ("[Amn allegation that a defendant has presented to the public a 'garbled,' dis-

torted version of plaintiff's work seeks to redress the very rights sought to be protected by

the Lanham Act, 15 U.S.C. § 1125 (a), and should be recognized as stating a cause of action

under that statute." (citation omitted)).


48          UCLA ENTERTAINMENT LAW REVIEW                 [Vol. 11:1

Lanham Act prohibits use of a trademark or a false designation of ori-

gin that is "likely to cause confusion" as to affiliation, connection, or

association with the rightful owners of the mark.38

Second, the editors may be in violation of the Lanham Act for

simply leaving the name of the director or the movie title in the edited

movie itself and on the packaging. Section 43(a)(1)(B) of the Lanham

Act prohibits the use of false or misleading descriptions of fact in com-

mercial advertising or promotion that misrepresent the quality of "an-

other person's goods, services, or commercial activities."'39 Both the

movie studios and the directors have argued that the edited movie ver-

sions are of inferior quality as compared to the original movies. If the

edited versions are significantly different, it may be false advertising to

promote the edited versions as the same movie that the director and

movie studio made. Consequently, the third party editors are placed in

a difficult position. They cannot simply avoid liability by removing the

names of the movie studios, directors, and everyone associated with the

film. Such an act would be in clear violation of Copyright law and

could further be actionable under the Lanham Act as "reverse passing


The third possible claim under the Lanham Act differs somewhat

from the first two. Even if the sale of edited movies does not cause any

consumer confusion as to who authorized, endorsed, or created the ed-

ited movies, the editing could still be actionable under the Lanham Act.

The sale of the edited movies may dilute the value of the famous names

of the directors or the famous marks of the movie studios. "Trademark

dilution" became actionable under federal law through the Federal

Trademark Dilution Act of 1995, which amended the Lanham Act to

include Section 43(c).40

A. False Designation of Origin-A Likelihood of Confusion

Section 43(a) of the Lanham Act prohibits use of a trademark or

false designation of origin that "is likely to cause confusion, or to cause

mistake, or to deceive, as to the affiliation, connection, or association of

[one] person with another person, or as to the origin, sponsorship, or

approval of his or her goods, services, or commercial activities by an-

other person.”’41

38 15 U.S.C. § 1125 (a)(1)(A) (2003).

” 15 U.S.C. § 1125 (a)(1)(B) (2003).

40 Federal Trademark Dilution Act of 1995 (codified at 15 U.S.C. § 1125(c) (1995)).

41 See 15 U.S.C. § 1125(a) (2003).


In June of 2003, the Supreme Court decided Dastar Corp. v. 20th

Century Fox Film Corp.42 Dastar released a videocassette that it pro-

duced by making minor changes to tapes of Fox’s World War II televi-

sion series, Crusade in Europe.43 The copyright had expired on the

television series leaving it in the public domain.44 Nevertheless, Fox

sued Dastar under the Lanham Act for selling the videocassettes with-

out properly crediting the creators of the series.45 Fox claimed that

Dastar “made a ‘false designation of origin, false or misleading descrip-

tion of fact, or false or misleading representation of fact, which … is

likely to cause confusion… as to the origin… of [its] goods.’ ,,46 The

Court focused on the difficulty of determining which of the various

people involved in the production and distribution of a film should be

within the line of origin.47 Ultimately, the Court refused to include the

original creators of the underlying television series within the meaning

of “origin of goods” under the Lanham Act.48 The Court held that

“origin of goods” extends only “to the producer of the tangible goods

that are offered for sale, and not to the author of any idea, concept, or

communication embodied in those goods.”’49 Dastar prevailed in a

unanimous decision because it was the producer of the tangible video-

cassettes that it sold.50

At first blush, the case of the third party editors has several facts in

common with Dastar. The soft-copy editors are the producers of the

tangible edited videocassettes and DVDs that they sell. The editors

have also made small changes to the underlying work. The creators of

the underlying movies are suing under the Lanham Act claiming a like-

lihood of confusion as to the origin of the edited movies. However,

there are some important differences. The television series in Dastar

was no longer protected by copyright. The movies in the present case

are still under copyright.51 This distinction is not relevant here because

copyright ownership is not necessary when seeking a remedy under the

Lanham Act. But there is another twist. The soft-copy editors place

the edited movies back into the original movie packaging. While Das-

tar represents a claim of “reverse passing off,”52 the claim against the

42 539 U.S. 23 (2003).

4″ Id. at 26.


45 Id. at 26-7.

46 Id. at 28.

47 Id. at 28-9.

48 Id. at 29.

49 Id. at 31.

50 Id.

51 See infra, Part IV (discussing the significance of copyright).

52 Reverse passing off means advertising someone else’s product as your own product.


50          UCLA ENTERTAINMENT LAW REVIEW                   [Vol. 11:1

third party editors is for the editors "passing off"53 their edited versions

as the product of the movie creators. The soft-copy editors produce the

tangible videocassettes, but they may still be "likely to cause confusion"

as to the origin of their product.

There is also judicial precedent interpreting Section 43(a) of the

Lanham Act to support claims of "false endorsement."'54 In the high

profile case of Waits v. Frito-Lay, singer Tom Waits successfully brought

suit against Frito-Lay for imitating his singing voice and style in a radio

advertisement for SalsaRio Doritos.55 The impersonator copied Waits'

distinctive vocal style while performing a parody of Waits' song, "Step

Right Up."56 The court found that the use of the imitated voice was

"likely to confuse" ordinary consumers as to whether Tom Waits spon-

sored or endorsed SalsaRio Doritos.57

The directors and movie studios assert that the editors are using

their names in a way that would be "likely to confuse" or deceive the

purchasing public.58 The confusion may involve: (1) Consumers who

purchase edited versions of movies believing that the directors or

movie studios are affiliated with the editors or are endorsing the edited

work, (2) Consumers who knowingly buy edited versions of movies be-

lieving that the directors or movie studios created the edited versions,

and (3) Consumers who unwittingly buy edited versions of movies,

thinking they are buying unedited versions.

The law does not require any direct, actual evidence of confusion.

Such evidence of actual confusion is rarely demonstrated. Although

the question of whether or not the use of a mark is "likely to confuse"

is rather subjective, courts have made an attempt to place a framework

around the analysis. The Court of Appeals for the Second Circuit has

identified eight non-exhaustive factors, known as the Polaroid factors,

to evaluate whether or not there is a "likelihood of confusion."'59

The first Polaroid factor suggests that the stronger a senior mark is

at identifying a product, the more protection it should be afforded

against the junior user.60 The most famous directors are closely identi-

53 Passing off means advertising your own product as being someone else's product.

54 See, e.g., Better Bus. Bureau v. Med. Dirs., Inc., 681 F.2d 397 (5th Cir. 1982); Dallas

Cowboys Cheerleaders v. Pussycat Cinema, Ltd., 604 F.2d 200 (2d Cir. 1979); Jackson v. MPI

Home Video, 694 F. Supp. 483 (N.D. Ill. 1988); Geisel v. Poynter Prods., Inc., 283 F. Supp.

261, 267 (S.D.N.Y. 1968).

55 Waits v. Frito-Lay, Inc., 978 F.2d 1093 (9th Cir. 1992).

56 Id. at 1097-98.

17 Id. at 1111.

58 15 U.S.C. § 1125(a)(1)(A) (2003).

59 Polaroid v. Polorad Elecs. Corp., 287 F.2d 492, 495 (2d Cir. 1961). The other circuit

courts have adopted essentially the same factor analysis.

60 Id.


fled with the movies they create.61 Steven Spielberg or Martin Scorsese

would fall into this category. As a result, a court will be more likely to

find a likelihood of confusion when others misappropriate these strong

marks. For the lesser-known majority of Hollywood directors, a finding

of likelihood of confusion is more doubtful. The movie studios will

likely be given strong protection of their famous marks, which will in-

clude the titles of the movies, and any other trade dress related to the

packaging of the movies.62

The second factor calls for a direct comparison of the two marks.63

The more similar the marks are, the greater the chance of confusion.

Both edited and unedited movie versions use the name of the director,

the movie titles, and the packaging materials, so this factor favors find-

ing a likelihood of confusion for both the director and movie studio


The third Polaroid factor looks at the competitive proximity of the

two products.64 The edited and unedited movie versions compete for

shelf space in some rental and store outlets, which tends to favor a find-

ing of confusion.65 However, CleanFlicks outlets only carry one ver-

sion of the movie. Confusion will be less likely in stores that only carry

either the edited or unedited movies.

The fourth factor looks at the likelihood that the plaintiff may

enter the same market as the junior user.66 Both the directors' uned-

ited versions and the edited movies already occupy the same market,

the market for home videos. The similarity of the markets increases

the likelihood of confusion.

The fifth factor looks for evidence of actual confusion.67 It is intui-

tive that evidence of actual confusion will make it easier for a court to

find a likelihood of confusion. This is the most convincing and the most

difficult evidence to establish in a Lanham Act case. There is currently

no evidence that anyone has mistaken the edited movie versions for un-


TINE SCORSESE THROUGH AMERICAN MOVIES 29 (Miramax Books 1st ed. 1997). "Some,

like Frank Capra, Cecil B. De Mille, or Alfred Hitchcock carved a niche for themselves by

excelling in a certain type of story and being identified with it. Their very name became a

box-office draw. A few even achieved Capra's dream and secured their name 'above the

title."' Id.

62 Trade dress would be protected where the package design is inherently distinctive or

has acquired secondary meaning. Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763 (1992).

63 Polaroid, 287 F.2d at 495.

64 Id.

65 Id.

66 Id.

67 Id.


52          UCLA ENTERTAINMENT LAW REVIEW                   [Vol. 11:1

edited versions.68 The directors and movie studios may conduct con-

sumer surveys to demonstrate actual confusion to the court.

The sixth factor examines the subjective intent of the junior user.69

The soft-copy editors have placed disclaimers on the edited movies and,

thus, are consciously trying to avoid confusing consumers, so this factor

does not favor finding a likelihood of confusion.

The seventh factor looks at the quality of the junior user's product.

If the junior user's product is inferior to the senior user's product, more

protection is afforded to the senior user. The directors and movie stu-

dios claim that the edited movies are of lower quality than the unedited

movie versions. They cite the inherent story continuity problems of re-

moving important scenes from a movie.70 In addition, the edited DVD-

R versions do not include the extra features normally found on the

original DVDs. However, the proliferation of CleanFlicks stores over

the last two years and the premium charged for the edited versions sug-

gests that the public is satisfied with the quality of the altered


The eighth factor looks at the sophistication of the purchasers.72

The edited movies sell for upwards of twice the price of the unedited

versions.73 The willingness to pay a higher price suggests a more so-

phisticated purchaser who is less likely to be confused.

An overall balance of the factors supports at most a finding of like-

lihood of confusion for well-known directors and for the more famous

movie studio trademarks. However, many Hollywood directors will

have difficulty establishing a likelihood of confusion. Lesser known di-

rectors will have the burden of showing an audience connection be-

tween their names and the movies they direct. Ultimately, the potential

for confusion may be resolved by placing a prominent disclaimer on the

package and by inserting a message before the movie indicating that

the movie is edited and is in no way endorsed or approved of by the

director or movie studio. Placing the movie in a different package and

removing the name of the director entirely would also help prevent the

68 Id.

69 Id.

70 See, e.g., director Brad Silberling's comments concerning the cuts made to City of An-

gels. Gary Gentile, Content-Cleaning Software Angers Some, ASSOCIATED PRESS ONLINE,

Feb. 3, 2003, available at 2003 WL 11477085.

71 Louis Aguilar, Hollywood Directors Countersue against Utah-based CleanFlicks Video

Chain, KRTBN, Sept. 24, 2002, available at 2002 WL 100571430 ("A year ago, CleanFlicks,

founded in Pleasant Grove, Utah, had fewer than 20 stores. Now it has more than 70 stores

in 18 states and 440 movie titles.").

72 Polaroid, 287 F.2d at 495.

73 See Williams, supra note 4. The extra expense in purchasing edited movies may lead to

more careful consumer consideration of the product.


likelihood of confusion, but could give rise to a claim of "reverse pass-

ing off" for failure to attribute the work to the director and the rest of

the people who created the movie.74

B. False Advertising-Misattribution of Work

The Lanham Act prohibits anyone from making false or mislead-

ing descriptions of fact "in commercial advertising or promotion, [that]

misrepresent[ ] the nature, characteristics, qualities, or geographic ori-

gin of [someone's] goods, services, or commercial activities.”’75 Courts

have expanded the false advertising doctrine to prohibit misrepresenta-

tions of credits even though a movie would not typically be considered

a commercial advertisement or promotion.76 A misattribution of a di-

rector’s credit in a movie is commercial in the sense that it induces

someone to buy the movie or pay to see it.77 The directors could assert

that the soft-copy editors are liable for misattribution of the directors’

work. Such a claim will depend on whether or not the movies are sig-

nificantly altered during the editing so as to no longer be the directors’


If the editing job were substantial to the point of creating an en-

tirely different movie, then crediting the director’s name on the movie

would almost certainly be false advertising.79 However, for many of the

edited movies the degree of misattribution will fall short of creating an

entirely new movie. The more appropriate question will be whether

the purchasers are likely to be misled by the misrepresentations.80

The most noteworthy example of a misattribution of work claim

under the Lanham Act is Gilliam v. ABC.8′ ABC broadcast an edited

version of Monty Python’s “Flying Circus” from which they removed

twenty-four minutes from three programs totaling ninety minutes.82

While ABC removed the footage to accommodate commercial inter-

ruptions, they also made the edits to remove anything that the network

felt might be offensive.83 Consequently, ABC removed important parts

of the comedy skits including “essential elements in the schematic de-

14 15 U.S.C. § 1125(a)(1)(A) (2001); GILSON, supra note 37, § 7.02 [6][e][ii].

71 15 U.S.C. § 1125(a)(1)(B) (2001); GILsON, supra note 37, at § 7.02 [6][d].

76 Gilliam, 538 F.2d at 24; GiLsoN, supra note 37, at § 7.02 [6][d].

77 Id.

78 See Gilliam, 538 F.2d at 24.

71 Stephen King v. Innovation Books, 976 F.2d 824, 829 (2d Cir. 1992).

80 Rosenfeld v. W.B. Saunders, 728 F.Supp. 236 (S.D.N.Y. 1990).

81 See Gilliam, 538 F.2d at 14.

82 Id. at 18.

83 Id.


54          UCLA ENTERTAINMENT LAW REVIEW                 [Vol. 11:1

velopment of a story line" and the climax of some of the skits.84 The

Second Circuit found the editing to have "impaired the integrity of

[Monty Python's] work and represented to the public a mere caricature

of their talents.”’85 The viewing public was likely to be misled by this

misrepresentation because for many viewers this was their first impres-

sion of Monty Python.86 The court then issued a preliminary injunction

preventing future broadcasts.87

The directors’ case differs from Gilliam in that the edited movies

are not broadcast on television. The viewing public may be more likely

to be misled by an edited movie on television than a movie on videocas-

sette or DVD that they intentionally purchase, paying a premium. This

would be especially true if the package had a disclaimer. Placing a dis-

claimer at the beginning of the program was deemed inadequate in Gil-

liam because viewers who tuned in a few minutes late would miss it.88

The court also suggested that a disclaimer might be inadequate at over-

coming the permanent image created in the viewer’s mind from watch-

ing the altered work.89 It would be more difficult to argue that people

will miss a prominently placed disclaimer on a DVD or video.

If people understand that they are watching an edited movie, there

would still be a question as to which elements of the movie result from

the director’s choices and which come from the editor. This issue be-

comes more of a problem if the edits are subtle. On the other hand,

people who purchase an edited movie probably do so because they

know specific content has been removed. They would know that the

absence of profanity, nudity, or graphic violence was the work of the

editor. What they might not be able to tell is whether the edits have

made the story less coherent, removed the punch-line to a joke, or

changed the mood of a scene.90

The final element in establishing a claim of false advertising is to

show a likelihood of being damaged by the act.91 Even if viewers are

misled about the director’s abilities by watching the edited movies, it is

unclear that this misrepresentation is likely to harm the director. Some

purchasers of the edited movies only watch because the work is edited

and would not have paid to see the director’s work otherwise. Those

`4 Id. at 25.

85 Id.

86 Id. at 19.

87 Id. at 25.

88 Id.

89 Id.

90 These changes would be similar to the changes made by ABC in Gilliam. See Gilliam,

538 F.2d at 25 n.12.

91 15 U.S.C. § 1125(a) (2003).


who watch the edited movies, but also at times watch unedited movies,

still have the option of watching the unedited version before making up

their minds on the director’s ability. The use of a disclaimer may also

lessen the likelihood of harm from the use of the directors’ names on

the substantially edited movies. In summary, because the directors will

be unable to show likelihood of damage, a false advertising claim under

the Lanham Act is not likely to succeed.

C. Dilution

The concept of dilution in American law is widely attributed to

Professor Frank I. Schechter who espoused its importance in his 1927

article entitled, “The Rational Basis of Trademark Protection.”’92 In

that article, Professor Schechter describes dilution as “the gradual whit-

tling away or dispersion of identity and hold upon the public mind of

the mark or name by its use upon non-competing goods.’”93 Since that

time, more than half of the states have enacted anti-dilution statutes.94

In 1995, Congress enacted the Federal Trademark Dilution Act

(“FTDA”), which amended the Lanham Act to include a federal cause

of action for dilution.95 Dilution is defined under the Lanham Act as

the lessening of the capacity of a famous mark to identify and distin-

guish goods or services, regardless of: (1) the presence or absence of

competition between the owner of the famous mark and other parties;

or (2) the likelihood of confusion, mistake, or deception.96

Traditionally, dilution falls into two categories: blurring and

tarnishment.97 Blurring takes place when the use of the plaintiff’s fa-

mous mark in an unrelated business lessens the ability of that mark to

serve as a unique identifier of the plaintiff’s product.98 Blurring also

occurs whenever a junior mark is identical or sufficiently similar to a

famous mark, such that persons viewing the two will instinctively make

a “mental association” between the two.99 Tarnishment occurs “when a

famous mark is improperly associated with an inferior or offensive

92 40 HARV. L. REv. 813 (1927).

91 Id. at 825.

9′ For a list of the state anti-dilution statutes, see Daniel H. Lee, Remedying Past and

Future Harm: Reconciling Conflicting Circuit Court Decisions Under the Federal Trademark

Dilution Act, 29 PEPe. L. REv. 689, 700 n.92 (2001).

9 Federal Trademark Dilution Act of 1995, 15 U.S.C. § 1125(c).

96 “Dilution” is defined in 15 U.S.C. § 1127 (2003).

97 Panavision Int’l, L.P. v. Toeppen, 141 F.3d 1316, 1326 (9th Cir. 1998).


TITION §24:68 at 24-111 (4th ed. 2002)).

99 Ringling-Bros.-Barnum & Bailey Combined Shows, Inc. v. Utah Div. of Travel Dev.,

170 F.3d 449, 452 (4th Cir. 1999).


56           UCLA ENTERTAINMENT LAW REVIEW                      [Vol. 11:1

product or service."'100 Although the concepts behind blurring and

tarnishment are important for understanding the concept of dilution,

neither is required under the FTDA.l0'

There are five elements necessary to a dilution claim under the

FTDA.102 They are: (1) the senior mark must be famous; (2) it must be

distinctive; (3) the junior use must be a commercial use in commerce;

(4) it must begin after the senior mark has become famous; and (5) it

must cause dilution of the distinctive quality of the senior mark.103

The elements of fame and distinctiveness will likely be established

for the most famous directors who are well known throughout the

United States or, in some cases, worldwide. These directors have

achieved celebrity status and are often touted by name to help market

the films they direct.104 The fact that the director's name is promi-

nently featured in the movie credits, on movie posters, and on the DVD

or videocassette, helps to satisfy the famousness requirement.'05 The

movie studios will have an easy time establishing that many of their

movies have well-known, famous titles. However, not all movie titles

will qualify as famous for protection under the FTDA.

The names of the most famous directors are distinctive in that peo-

ple generally think of their names in relation to popular movies.'06 The

movie studios should be able to establish that some of their movie titles

are distinctive. However, many of the directors who are represented by

the Directors Guild of America will not demonstrate the famousness or


PETITION § 24:104 at 24-172 to 173 (4th ed. 2002)).

101 Moseley v. V Secret Catalogue, Inc., 537 U.S. 418, 427-28 (2003).

102 15 U.S.C. § 1125(c) (2003).

103 Nabisco, Inc. v. PF Brands, 191 F.3d 208, 215 (2d Cir. 1999).

104 For example, James Cameron and Steven Soderbergh have prominent placement on

marketing for Solaris (20th Century Fox 2002). Other examples include Stanley Kubrick's

Eyes Wide Shut (Warner Bros. 1999) and Steven Spielberg's AL. (Warner Bros. 2001).

105 While the first or last names of the directors may be common among less famous direc-

tors, a court would likely apply the "anti-dissection rule ... which serves to remind courts

not to focus only on the prominent features of the mark, or only on those features that are

prominent for purposes of the litigation, but on the mark in its totality." V Secret Cata-

logue, Inc. v. Moseley, 259 F.3d 464, 470 (6th Cir. 2001), rev'd, 537 U.S. 418 (2003).

106 Nabisco, 191 F.3d at 215.

Distinctiveness in a mark is a characteristic quite different from fame. Distinctiveness is

a crucial trademark concept, which places marks on a ladder reflecting their inherent

strength or weakness .... The most distinctive are marks that are entirely the product of

the imagination and evoke no associations with human experience that relate intrinsically

to the product. The arbitrary or fanciful quality is what renders the mark distinctive;

another seller of the same product or service would have no justification for using the

same or a similar mark.

Id. at 215-16.


distinctiveness required for protection under the FTDA.107 These non-

famous and perhaps not so distinctive directors will need the benefit of

a broad injunction against the editors if their work is to be left


The requirement of famousness also ties into the fourth element,

which requires the junior use to begin after the senior mark has become

famous.108 For the directors that are currently famous, this require-

ment does not pose a problem. However, the unknown directors who

later become famous will presumably not have a cause of action for

previous editing of their earlier work, because the editing will have

taken place before the mark became famous. It is not clear whether a

court would need to determine the fame status of a director each time a

director makes a movie, to decide if his or her movies can be edited. A

broad injunction prohibiting third party editing or allowing it may keep

unnecessary litigation costs down but may also involve protection for

non-famous directors who fail to meet the statutory standard of dilu-

tion under the FTDA. It is important to note that third party editing

takes place after release on DVD or video. Major-studio-release mov-

ies will have time to become famous from a theatrical run before being

released on DVD or video. During the theatrical run, studios will mar-

ket the titles of the films nationwide. Consequently, the movie studios

will probably have an easier time establishing the prior famousness ele-

ment in a dilution claim. Directors may also benefit from the theatrical

release of their movies, but only to the extent that the studio or the

press prominently use their names.

The third element of a dilution claim requires that the junior use

must be a commercial use in commerce.109 The soft-copy editors are

selling and renting the movies that they have edited.110 The directors'

names are credited and are printed on the DVD or videocassette pack-

aging and, thus, would be a commercial use in selling the edited movies.

The movie titles and packaging materials are also on the edited movies

that are sold. The companies that offer to edit a previously purchased

personal copy of a movie are engaged in a commercial enterprise but

may claim not to be using the director's name or the movie titles in

commerce. A court will probably still find the practice of shipping back

107 The DGA represents more than 1,000 directors. Most of these directors are not fa-

mous and/or distinctive.

108 Nabisco, 191 F.3d at 215. If the director's name automatically becomes famous upon

use on a movie distributed nationwide, then any use by the editors would always come after

the senior mark was famous.

109 Nabisco, 191 F.3d at 215; see also 15 U.S.C. §1125(c) (2003).

110 See Williams, supra note 4; see also http://www.cleanflicks.com (last visited Jan. 14,



58           UCLA ENTERTAINMENT LAW REVIEW                       [Vol. 11:1

the edited copy in the original package satisfies "use of the mark in


The final and most important element to establish in a claim of

dilution under the FTDA is the requirement that the junior use "causes

dilution" of the distinctive quality of the famous mark.'11 In February

2003, the Supreme Court attempted to resolve a sharp division between

the circuit courts as to what is meant by the words "causes dilution.""u2

Prior to the Supreme Court decision in Moseley v. V Secret Catalogue,

there were two competing interpretations of this phrase.113

In Ringling Bros. Barnum and Bailey Combined Shows v. Utah Di-

vision of Travel Development, the Court of Appeals for the Fourth Cir-

cuit interpreted the FTDA to require a plaintiff to demonstrate the


(1) a sufficient similarity between the junior and senior marks to

evoke an "instinctive mental association" of the two by a relevant

universe of consumers which (2) is the effective cause of (3) an actual

lessening of the senior mark's selling power, expressed as "its capac-

ity to identify and distinguish goods or services."114

The deciding and most important part of the test set forth in Ringling

Bros. is the stringent requirement of objective proof of an actual harm

to the senior trademark's selling power."5

Under the Fourth Circuit approach, set forth in Ringling Bros., the

directors would need to prove actual economic injury from the sale of

the edited movies.116 Presumably the directors would have to show a

reduction in revenue that occurred with the use of their names on ed-

ited movies. The problem for the directors is that the marginal increase

in the sale of movies that are converted into edited copies will also

111 "The fifth element, 'dilution of the distinctive quality of the mark' is the key operative

element of the statute." Nabisco, 191 F.3d at 216; see 15 U.S.C. §1125(c)(1) (2003).

112 Moseley v. V Secret Catalogue, 537 U.S. 418 (2003).

113 See, e.g., Daniel H. Lee, Remedying Past and Future Harm: Reconciling Conflicting

Circuit Court Decisions Under the Federal Trademark Dilution Act, 29 PEPP. L. REV. 689

(2002); Jennifer Mae Slonaker, Conflicting Interpretations of the Federal Trademark Dilution

Act Create Inadequate Famous Mark Protection, 26 U. DAYTON L. REV. 121 (2000); Paul

Edward Kim, Preventing Dilution of the Federal Trademark Dilution Act: Why the FTDA

Requires Actual Economic Harm, 150 U. PA. L. REV. 719 (2001).

114 Ringling Bros., 170 F.3d at 458. "This concededly is a stringent interpretation of 'dilu-

tion' under the federal Act." Id.

115 Ringling-Bros., 170 F.3d at 461 ("[I]n place of the ‘likelihood of dilution’ language of

the state antidilution statutes, the [federal Act] … creates an actual dilution requirement”)

(citing Robert N. Klieger, Trademark Dilution: The Whittling Away of the Rational Basis for

Trademark Protection, 58 U. PrIr. L. REV. 789, 840 (1997))).

116 Ringling-Bros., 170 F.3d at 458 (“[B]y specifically defining dilution as ‘the lessening of

the capacity of a famous mark to identify and distinguish goods or services,’ the federal Act

makes plain what the state statutes arguably may not: that the end harm at which it is aimed

is a mark’s selling power, not its ‘distinctiveness’ as such.”).


result in an increase of residuals paid to the director. If the use of the

directors’ names on edited movies takes many years before negatively

affecting sales of the directors’ movies, this potential dilution could not

be taken into account for an action today.117 The directors will not be

able to show any direct proof of actual economic harm and, thus, would

not prevail on a dilution cause of action under the Fourth Circuit test.

In Nabisco Inc. v. P.RE Brands, Inc., the Second Circuit rejected the

Fourth Circuit requirement of actual harm.’18 Instead, the court inter-

preted the phrase “causes dilution” to mean “likely to suffer economic

harm in the future.”119 In other words, a plaintiff could be granted an

injunction by merely showing a “likelihood of dilution.”’20 The

Nabisco court listed ten non-exclusive factors to be used in finding a

“likelihood of dilution.””21

The Nabisco decision was short-lived. In February of 2003, the Su-

preme Court decided the case of Moseley v. V Secret Catalogue, in

which the key issue was whether or not proof of actual harm was neces-

sary to prove dilution under the FT’DA.122 In Moseley, the Supreme

Court made clear that the words “causes dilution” meant that the

FTDA required a showing of actual dilution of the famous mark rather

than a mere “likelihood of dilution.”’123 The Moseley opinion rejected

Nabisco in so far as Nabisco allowed potential future dilution to be

actionable. However, the Court stated that it is not necessary to prove

the effects of actual harm, such as a loss of sales or profits, as suggested

by the Fourth Circuit in Ringling Bros.124 The Court left open the pos-

sibility of proving actual dilution without any “direct evidence of dilu-

… Id. at 460-61 (“[T]he conduct proscribed is that which ‘lessens’ capacity, not that which

‘will’ or ‘may’ lessen.”).

118 Nabisco, 191 F.3d at 223.

119 Id. at 224-25 (“[W]e read the statute to permit adjudication granting or denying an

injunction, whether at the instance of the senior user or the junior seeking declaratory relief,

before the dilution has actually occurred.”).

120 Id.

121 Id. at 217-22. The Nabisco factors are: (1) distinctiveness, (2) similarity of the marks,

(3) proximity of the products and the likelihood of bridging the gap, (4) interrelationship

among the distinctiveness of the senior mark, the similarity of the junior mark, and the

proximity of the products, (5) shared consumers and geographic limitations, (6) sophistica-

tion of consumers, (7) actual confusion, (8) adjectival or referential quality of the junior use,

(9) harm to the junior user and delay by the senior use, and (10) effect of senior’s prior laxity

in protecting the mark. Id.

122 Moseley v. V Secret Catalogue, 537 U.S. 418 (2003); see also Amicus Brief No. 01-1015

in Moseley v. V Secret Catalogue, in which the Solicitor General Theodore Olson argued that

the Court should find a “likelihood of dilution” standard that does not require proof of

actual harm to prevail under the FTDA.

123 Moseley, 537 U.S. at 433.

124 Id. at 433-34.


60          UCLA ENTERTAINMENT LAW REVIEW                 [Vol. 11:1

tion such as consumer surveys.''125 In cases where the marks are

identical, mere circumstantial evidence of actual dilution could be suffi-

cient to find dilution.126 The Court did not answer the question of what

type of circumstantial evidence would suffice. In conclusion, it may still

be possible for the directors to demonstrate circumstantial evidence of

actual harm, despite the holding in Moseley.

D. The Lanham Act Case against the "Playback" Editors

The sellers of the playback editing devices do not sell a product

with the director's name on it. It will be difficult for the directors to

make out a Lanham Act case against them.127 The movie studios may

have a better case if the playback editors actually use the movie titles to

sell the editing devices. The directors have argued a theory of contribu-

tory infringement of the Lanham Act because the playback editing de-

vice leaves the director's name on the edited movie that it displays.'28

This argument is not persuasive because the home users are not infring-

ing the Lanham Act by watching the movies. Without a direct infringe-

ment, there can be no contributory infringement by the playback

editors. Another important requirement to a Lanham Act claim is that

use of the mark must be "in commerce."'129 Personal home use will not

be considered "in commerce" and thus it is not actionable. If the sale

of the device satisfies use in commerce, then any confusion caused by

the device could be eliminated by the home user turning off the play-

back editing device and watching the unedited movie.130 Further, the

playback editing device could also be made to display a disclaimer mes-

sage when playing the edited movies. So long as these companies do

not advertise their device with the names of the directors or make false

or misleading descriptions, or false designations of origin concerning

the movies that the device edits, there will be no Lanham Act cause of

action against them.'3'


American copyright law offers protection to the copyright owners

of motion pictures in the form of several exclusive rights.132 These ex-

125 Id.

126 Id. at 434.

127 15 U.S.C. § 1125(a) (2003).

128 See DGA Countercl. in Huntsman v. Soderbergh, Civ. No. 02-M-1662 (MJW) (D.

Colo. filed Sept. 20, 2002).

129 See 15 U.S.C. § 1125(a)(1) (2003).

130 This assumes that a person would be willing to watch the unedited version.

131 See 15 U.S.C. § 1125(a)(1) (2003).

132 17 U.S.C. § 106 (2003), which states:


clusive rights include the right to make copies, distribute copies by sale

or rental, and to prepare derivative works.133 There are also provisions

granting the copyright owners exclusive rights to the public perform-

ance of a motion picture and to display the individual frames of a mo-

tion picture.'34 Absent a fair use exception, the third party editors may

well be treading on the exclusive rights of the motion picture copyright

owners.135 The law allows the copyright owner to seek an injunction or

even monetary relief for actual damages or loss of profits as a result of

the copyright infringement.136

A. Standing to Sue

The problem with the directors bringing a suit for copyright in-

fringement is that the directors do not own the copyrights in the mov-

ies.137 In all but a few cases, the director is an employee of the

studio.138 Copyright law makes clear that work done in the scope of

employment belongs to the employer.139 The major studios own the

Exclusive Rights in Copyrighted Works Subject to sections 107 through [122], the owner

of copyright under this title has the exclusive rights to do and to authorize any of the


to reproduce the copyrighted work in copies or phonorecords;

to prepare derivative works based upon the copyrighted work;

to distribute copies or phonorecords of the copyrighted work to the public by sale or

other transfer of ownership, or by rental, lease, or lending;

in the case of literary, musical, dramatic, and choreographic works, pantomimes, and

motion pictures and other audiovisual works, to perform the copyrighted work publicly;

in the case of literary, musical, dramatic, and choreographic works, pantomimes, and

pictorial, graphic, or sculptural works, including the individual images of a motion picture

or other audiovisual work, to display the copyrighted work publicly; and

in the case of sound recordings, to perform the copyrighted work publicly by means of a

digital audio transmission.


133 See 17 U.S.C. § 106 (1), (2), and (3) (2003).

134 See 17 U.S.C. § 106 (4) and (5) (2003).

“I See 17 U.S.C. § 107 (2003). For analysis of fair use, refer to infra Section III.E.

136 17 U.S.C. § 502 (2003) Remedies for Infringement: Injunctions; 17 U.S.C. § 504 (2003)

Remedies for Infringement: Damages and Profits.

137 See DGA Mot. To Join Studio Copyright Owners in Huntsman v. Soderbergh, Civ. No.

02-M-1662 (MJW) (D. Colo. filed Sept. 20, 2002).

138 Id.

131 17 U.S.C. § 201(b) (2003).

(b) Works Made for Hire. In the case of a work made for hire, the employer or other

person for whom the work was prepared is considered the author for purposes of this

title, and, unless the parties have expressly agreed otherwise in a written instrument

signed by them, owns all of the rights comprised in the copyright.

Id. See the definition under 17 U.S.C. §101 (2003):

A ‘work made for hire’ is- (1) a work prepared by an employee within the scope of his

or her employment; or (2) a work specially ordered or commissioned for use as a contri-

bution to a collective work; as a part of a motion picture or other audiovisual work, as a


62           UCLA ENTERTAINMENT LAW REVIEW                        [Vol. 11:1

movie copyrights as "works made for hire."'140 Thus, if the third party

editors are infringing these copyrights, it is up to the major studios to

bring the infringement action.141 Consequently, the eight major studios

have decided to file a copyright infringement suit against the editors.

Had the studios decided not to file the infringement claim, the directors

may have attempted to gain standing as beneficial owners of the copy-

rights. The copyright law states that both owners and beneficial owners

of a copyright may sue on behalf of that copyright.142 The directors

receive residual payments on the continued lawful use of the copy-

right.143 They may have been able to assert status as beneficial owners

under the theory that the studios own copyrights in equitable trust for

the directors.144 A case illustrative of beneficial ownership is Cortner v.

Israel.145 In Cortner, the two plaintiff composers created the musical

score for ABC's "Monday Night Football" and later assigned all rights

in the copyright to ABC for a lump sum payment and the chance to

receive royalty payments on the use of the music.146 Four years later,

ABC hired a new composer to create a derivative theme based on the

plaintiffs' work and discontinued use of the original theme.147 The

court decided that the plaintiffs were beneficial owners of the copyright

and thus had standing to sue to protect their copyright interest.148

translation, as a supplementary work, as a compilation, as an instructional text, as a test,

as answer material for a test, or as an atlas, if the parties expressly agree in a written

instrument signed by them that the work shall be considered a work made for hire.


140 See DGA Mot. To Join Studio Copyright Owners in Huntsman v. Soderbergh, Civ. No.

02-M-1662 (MJW) (D. Colo. filed Sept. 20, 2002).

141 17 U.S.C. § 501(b) (2003) ("The legal or beneficial owner of an exclusive right under a

copyright is entitled, subject to the requirements of section 411, to institute an action for any

infringement of that particular right committed while he or she is the owner of it.").

142 See 17 U.S.C. § 501(b) (2003).

143 See generally Alliance of Motion Picture & Television Producers and Directors Guild

of America, Inc. Basic Agreement of 1999 (hereinafter "DGA BA"), art. 18. Provision 18-

104 lists the residual payments for use of theatrical motion pictures in supplemental markets,

which include videocassette and DVD distribution.

144 See DAVID NIMMER, NIMMER ON COPYRIGHT § 12.02(c) (2003) "[A] ‘beneficial owner’

for this purpose would include, for example, an author who had parted with legal title to the

copyright in exchange for percentage royalties based on sales or license fees.” Id. (citing

H.R. REP. No. 94-1476, 94th Cong., 2d Sess. 159). The theory of “Beneficial ownership”

comes from “In Rem Theory” of the law of trusts. Id. Beneficiaries, although not the legal

holders of property in trust, are considered equitable holders of the property. Id. Under the

theory that beneficiaries own an “in rem” interest in the trust property, the beneficiary could

sue to protect the equitable interest. Id. See GEORGE GLEASON BOGERT, THE LAW OF

TRUSTS AND TRUSTEES § 183 (Rev. 2d. ed. 1979).

14″ 732 F.2d 267 (2d Cir. 1984).

146 Id. at 269.

147 Id. at 270.

148 Id. at 271.


However, they could not successfully sue ABC or its employees be-

cause ABC, as the rightful owner of the copyright in the underlying

theme, did not infringe the copyright in creating the derivative work.149

In the present case, the directors could seek beneficial ownership

status to sue the third party editors. Like the composers in Cortner

who received beneficial ownership status to protect their interest in

royalty payments, the directors could presumably sue to protect their

residual payments. However, the activities of the third party editors,

which may amount to infringement, likely will not prevent the directors

from receiving their residual payments. Both the soft-copy editors and

playback editors require the end user to lawfully purchase a copy of a

movie.150 Thus, the justification of a suit to protect the residuals may

be lost.151 While the Cortner opinion suggests that beneficial owner-

ship status is required to protect against a potential wrongdoer’s in-

fringement, it does not state a requirement that the royalty or residual

payment must be jeopardized by the infringement.152 There is a larger

obstacle that stands in the way of directors obtaining beneficial owner-

ship status. The directors never assigned away the rights in the copy-

rights of the movies.’53 As employees under the statutory provisions

for “works made for hire,” they never owned the copyrights in the first


In Moran v. London Records, Ltd., the Court of Appeals for the

Seventh Circuit addressed the question of whether or not an employee

in a “work made for hire” relationship could sue based on the copyright

as a beneficial owner.’55 The plaintiff was an announcer who was hired

by the Quaker Oats Company to perform in a dog food commercial as

an employee in a “work made for hire.”’156 A musician who was unre-

lated to the Quaker Oats Company and had no rights in the commer-

’49 Id. at 271-72.

150 See Williams, supra note 4. “Every edited video is placed on a legally purchased tape,

so the studio and its distributors are not cheated out of their rightful compensation.” Id.

(quoting one of the soft-copy editors); see also, Compl. For Declaratory Relief in Huntsman

v. Soderbergh, Civ. No. 02-M-1662 (MJW) (D. Colo. filed Aug 29, 2002).

151 If the copyright infringement suit is brought under a theory of beneficial ownership, it

would presumably be to protect the directors’ residual payments. If the editing does not

cause any loss in DVD or videocassette sales, then the there is no threat to the residuals.

However, the residual payments may only be necessary to establish beneficial ownership

status for directors. The residual payments themselves are irrelevant to a copyright infringe-

ment action.

152 Cortner, 732 F.2d at 271.

153 See Item No. 14 of CleanFlicks Compl. in Hunstman v. Soderbergh, Civ. No. 02-M-

1662 (MJW) (D. Colo. filed Aug 29, 2002).

154 17 U.S.C. § 201(b) (2003), supra note 139.

155 827 F.2d 180, 183 (7th Cir. 1987).

156 Id. at 181-82.


64          UCLA ENTERTAINMENT LAW REVIEW                  [Vol. 11:1

cial, "sampled" a recording of the plaintiff's performance in the

commercial and used it in a song which defendant, London Records,

distributed on a phonorecord.157 The plaintiff sought beneficial owner-

ship status in order to sue the infringing record company.158 The court

cited an older district court opinion and took note of legislative history

in finding that beneficial ownership status should not be conferred on

employees who perform "works made for hire."'159 The Moran court

may have been presumptive in arriving at the conclusion that Congress

did not intend to confer beneficial ownership status on employees who

perform "works made for hire." There is no statutory provision

preventing employees from becoming beneficial owners.160 Further,

the only evidence that Congress did not intend to allow employees to

become beneficial owners was a single situation mentioned in the Con-

gressional record, which involved a copyright owner who assigned his

rights away in exchange for royalties.'6' The Moran court then pro-

posed that the plaintiff should have contracted to secure the ownership

of the copyright or an exclusive right under the copyright.162 This solu-

tion is impractical considering the respective bargaining positions of the


Considering the difficulty that the directors would have faced in

asserting beneficial ownership status, they are fortunate that the studios

decided to sue the third party editors for copyright infringement. Ini-

tially, the studios were not quick to get involved in the dispute. It is not

clear that the movie studios lose any sales from the third party editors'

activities. Both the soft-copy and playback editors require the viewer

to lawfully purchase a copy of the movie.163 The result is that the stu-

dios will likely enjoy a marginal increase in DVD and videocassette

sales from purchasers who otherwise would not buy the movies with

objectionable content. However, the studios receive none of the profits

from the editing services or from the sale of the home playback editing

devices. They also have no say in what the editors are doing with the

movies. Ultimately, the studios will want to license third party editors

or to reserve the editing market entirely for themselves. The studios

157 Id. at 181.

158 Id. at 182.

151 Id. at 183.

160 "Beneficial owner" is not defined in 17 U.S.C. § 101 (2003). Also, 17 U.S.C. § 501(b)

(2003) does not include any language indicating that an author must assign away his/her

copyright in order to become a beneficial owner.

161 Cortner, 732 F.2d at 272.

162 Moran, 827 F.2d at 183.

163 Williams, supra note 4.


have a strong case for copyright infringement, as discussed in the fol-

lowing sub-sections.

B. Violation of Reproduction and Distribution Rights

The exclusive right to reproduce copyrighted work is the first right

guaranteed by statute to copyright owners.164 This right generally cov-

ers any reproduction, including those made privately.165 In addition,

the right to distribute copies of a copyrighted work to the public by

sale, or other transfer of ownership, or by rental, lease or lending is

exclusively left to the copyright owner.166

The soft-copy editors are making unauthorized reproductions of

the movies in order to edit them for content.167 The editing process

itself may involve making several reproductions, but placing the edited

version of a movie onto a videocassette or DVD-R is a clear reproduc-

tion of substantially the entire movie. The making of these reproduc-

tions would presumptively be an infringement, pending a fair use

exception. In addition, by selling the edited copies or renting them out,

the soft-copy editors have violated the exclusive rights of the studios to

distribute the movies.'68 The distribution right is limited by the First

Sale Doctrine, but this doctrine only applies to lawfully made copies.'69

The edited movies do not qualify.'70

The playback editors do not make copies of the movies. However,

the software that is used to reference points in the movies where cer-

tain objectionable scenes occur may still infringe on the right to copy

the movie.171

164 17 U.S.C. § 106(1) (2003).

165 Id. The exclusive rights (1) and (2) in § 106 are not limited to "commercial" reproduc-

tions or preparation of derivative works.

166 17 U.S.C. § 106(3).

167 Brian McTavish, 'Clean' Movies Spark Lawsuits; Companies Selling Edited Versions of

Hollywood Films, HAMILTON SPECTATOR, Sept. 30, 2002, at C14 (stating that "[s]everal

companies, most based in the Beehive State, are busy altering Hollywood’s hottest hits on

video and DVD without the approval from the filmmakers or the copyright-holders.”).

161 17 U.S.C. § 106(3).

169 17 U.S.C. § 109 (2003).

170 Id. § 109(a) (“Notwithstanding the provisions of section 106(3), the owner of a particu-

lar copy or phonorecord lawfully made under this title, or any person authorized by such

owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose

of the possession of that copy or phonorecord.”).

171 See NIMMER, supra note 144, § 8.01 [G]; Horgan v. Macmillan, Inc., 789 F.2d 157 (2d

Cir. 1986) (finding a ballet photograph to have infringed in a book the reproduction right of

a copyrighted ballet performance despite being in a different medium).


66           UCLA ENTERTAINMENT LAW REVIEW                    [Vol. 11:1

C. Violation of Right to Prepare Derivative Works

A copyright owner enjoys the exclusive right to prepare derivative

works.172 This right covers works that incorporate, in some form, a part

of the copyrighted work.173 The derivative works can be in any form in

which the original work is "recast, transformed, or adapted."'74 It is

possible   to  prepare    a   derivative  work    without   making     a


The soft-copy editors are preparing derivative works by creating

the edited movie versions. The preparation of these derivative works

involves a violation of the reproduction right.176 The provision could

still be significant if third party editors find a way to edit the movies

without making a copy or if there is a copyright exception allowing a

copy to be legally made. The editors would still be infringing the exclu-

sive right of the copyright owner to prepare derivative works. In deter-

mining whether or not the edited movies are derivative works, the

question is whether or not the original movies have been altered

enough to be "recast, transformed, or adapted."'77

There are three schools of thought as to how much the original

must be altered to be considered a derivative work.178 In Mirage Edi-

tions, Inc. v. Albuquerque A.R. T. Co., the Court of Appeals for the

Ninth Circuit found that mounting a decorative tile in a frame consti-

tuted a derivative work because the tile was permanently bonded to the

frame.179 The Mirage Editions holding was controversial for finding

that this seemingly minor transformation was enough to result in the

infringement of the right to prepare derivative works.'80

In Lee v. A.R. T., the Seventh Circuit, when faced with similar

facts, concluded that mounting a tile on a frame does not transform,

172 17 U.S.C. § 106(2).

17' H.R. REP. No. 94-1476, 94th Cong., 2d Sess. 62 (1976).

174 17 U.S.C. §101 (2003).

A "derivative work" is a work based upon one or more preexisting works, such as a

translation, musical arrangement, dramatization, fictionalization, motion picture version,

sound recording, art reproduction, abridgment, condensation, or any other form in which

a work may be recast, transformed, or adapted. A work consisting of editorial revisions,

annotations, elaborations, or other modifications which, as a whole, represent an original

work of authorship, is a "derivative work."


'15 Nat'l Geographic Soc'y v. Classified Geographic, Inc., 27 F. Supp. 655 (D. Mass. 1939).

176 See discussion infra Part III.B.

177 Lee v. A.R.T. Co., 125 F.3d 580, 582 (7th Cir. 1997).

178 Id.

179 Mirage Editions, Inc. v. Albuquerque A.R.T. Co., 856 F.2d 1341 (9th Cir. 1988).

180 See Wendy J. Gordon, On Owning Information: Intellectual Property and the Restitu-

tionary Impulse, 78 VA. L. REV. 149, 255 n.401 (1992).


adapt, or recast the original work.181 The court found this activity to be

closest to a transformation but decided that this was not enough to in-

fringe the derivative work right.182

Professor David Nimmer suggests a third possibility for determin-

ing whether or not a work is altered enough to be considered a deriva-

tive work.183 Nimmer proposes that in order to be considered a

derivative work, the alteration must create a work that is sufficiently

creative enough to be independently copyrightable, had the use of the

underlying work not been infringing.184

Under the Ninth Circuit, perhaps a few simple changes to a movie

could result in the new version being considered a derivative work.185

However, neither the Seventh Circuit nor the Nimmer test would likely

find most edited movies to be derivative works. The Seventh Circuit

may not even consider the edited movies to be transformative of the

original. Had the studios simply removed profanity and clipped a few

scenes, it is not likely that the resulting movie would be sufficiently

original to receive independent copyright protection. If additional

footage were added to movies, or if new images were placed on top of

original footage, there would be a much better case for calling the re-

sulting movie a derivative work under all three tests.186

A more complicated question is whether or not the playback edi-

tors are infringing the derivative work right. The playback editing de-

vice does not require reproduction of any part of the unedited movies.

However, a derivative work must incorporate protected material from

a pre-existing work.187 The use of the pre-existing work can amount to

facsimile reproduction as demonstrated above in the case of the soft-

copy editors. Actionable copying may also occur in a different medium

in any form "otherwise duplicated, transcribed, imitated, or simu-

lated."'188 In any case, the test for infringement will be whether or not

the new work is substantially similar in ideas and expression to the pre-

181 Lee, 125 F.3d at 582.

182 Id.

183 Id.

184 Id.

185 See Mirage Editions, 856 F.2d at 1343-44.

186 The additional footage may be sufficiently transformative to meet Seventh Circuit

standard and could satisfy the Nimmer test of sufficient original expression. See Lyman,

supra note 33 (discussing devices that digitally superimpose new images over an existing


187 H.R. REP. No. 94-1476, 94th Cong., 2d Sess. 62 (1976); see also Litchfield v. Spielberg,

736 F.2d 1352, 1357 (9th Cir. 1984).

188 See Addison-Wesley Pub'g Co. v. Brown, 223 F. Supp. 219, 227 (E.D.N.Y. 1963); see

also NIMMER, supra note 144, §8.01[F] (suggesting the possibility of infringing the derivative

work right even when no protectible expression is copied).


68          UCLA ENTERTAINMENT LAW REVIEW                 [Vol. 11:1

existing copyrighted work.189 How is it possible to compare the play-

back editing device with a movie? The Ninth Circuit has twice ap-

proached the question of whether or not works that electronically

reference pre-existing works, without reproducing any of the pre-ex-

isting work, should be considered derivative works.190

In Lewis Galoob Toys, Inc. v. Nintendo of Am., Inc., the plaintiff

Nintendo sued Galoob Toys for marketing a product named the Game

Genie.19a The Game Genie could be connected between the Nintendo

video game console and video game cartridges inserted into the con-

sole.'92 The Game Genie allowed the home user to manipulate the

characteristics of video games by selectively blocking information bits

traveling from the game cartridge to the game console.193 The home

user did not have to know anything about the electronics of the Game

Genie; he or she could merely enter codes that were predetermined by

the Game Genie manufacturer to cause the desired effect on the video

game output.194 Nintendo argued that the Game Genie produced au-

diovisual displays that should have been compared to the original dis-

plays produced by the game console without the Game Genie

interface.'95 While the court did not disagree with comparing the re-

sulting audiovisual output, it made clear that "a derivative work must

incorporate a protected work in some concrete or permanent form."'196

The court focused on the actual source of the Game Genie's display.'97

It determined that the Game Genie was useless by itself and could not

recast a Nintendo game's output.'9a The source of the display was not

in concrete form because there were billions of ways in which Game

Genie codes could change the game.199 The court concluded that the

Game Genie did not contain or produce a video game's output and

thus was not a derivative work.200

189 Judge Learned Hand's test asks whether an ordinary observer would regard two items

to have the same aesthetic appeal. Peter Pan Fabrics v. Martin Weiner Corp., 274 F.2d 487,

489 (2d Cir. 1960).

190 Micro Star v. Formgen, Inc., 154 F.3d 1107 (9th Cir. 1998); Lewis Galoob Toys v.

Nintendo of Am., Inc., 964 F.2d 965 (9th Cir. 1992).

"1 964 F.2d at 967.

192 Id.

193 Id.

194 id.

195 Id. at 969.

196 Id.

197 Id.

198 Id.

199 Id.

200 Id.


In Micro Star v. Formgen, Inc., the Ninth Circuit again considered

the question of whether or a not a work that electronically references a

pre-existing work should be considered a derivative work.20' This case

involved a third party company, Micro Star, that marketed a CD-ROM

containing new levels for use in the popular computer game, Duke

Nukem 3D.202 Duke Nukem 3D consisted of three parts: the game en-

gine, source art library files, and MAP files.203 MAP files indicated the

positions of objects in the virtual game world.204 The game engine ref-

erenced the MAP files and then applied the source art to create the

images on the computer screen.205 Micro Star sold independently cre-

ated MAP files.206 While Micro Star tried to analogize the MAP files

to the Game Genie in Galoob, the court disagreed.207 The audiovisual

display that appears on the computer screen was described in exact de-

tail within the MAP files and, thus, was in permanent or concrete form

for the purposes of Galoob.208 Although the MAP files themselves did

not reproduce any part of the original game, the court found that au-

diovisual display generated by using the MAP file was substantially

similar in both ideas and expression to the original game.209 The court

concluded that the MAP files were derivative works that infringed the

story of the Duke Nukem 3D game, in effect creating an unauthorized


Applying the Ninth Circuit analysis, the playback editing device is

somewhere in between the Game Genie and the Duke Nukem 3D

MAP files. The device interfaces the VCR or DVD player and elec-

tronically skips objectionable movie scenes and lowers the volume

when profanity is spoken.21' The device is similar to the Game Genie

in that they both alter the visual output that the user experiences. The

Game Genie blocks information between the game cartridge and the

console, whereas the playback editing device blocks information sent

from the VCR or DVD player to the television. Both the Game Genie

and the playback editing device would be useless by themselves.

Neither of the two devices reproduces any information from the pre-

201 Micro Star v. Formgen, Inc., 154 F.3d 1107 (9th Cir. 1998).

202 Id. at 1109.

203 Id. at 1110.

2N Id.

205 Id.

206 Id. at 1109.

207 Id. at 1111.

208 Id. at 1111-12.

209 Id. at 1112.

210 Id.

211 See Williams, supra note 4 (providing descriptions of ClearPlay, MovieMask, and



70          UCLA ENTERTAINMENT LAW REVIEW                  [Vol. 11:1

existing works they interface. The key difference is that the playback

editing device contains an index with the locations of the edits. This

indexed list analogizes better to the MAP files because both are specific

descriptions for generating audiovisual output. Thus, the indexed list

would be a concrete or permanent form for the purposes of Galoob.

In order to find an infringement of the derivative work right, the

audiovisual output generated by the playback editing device must be

substantially similar in ideas and expression to the original movie.212

There is little doubt that the edited and unedited movie versions will

share the same "concept and feel."'213 The plot, theme, dialogue, mood,

setting and characters would also be the same.214 However, the anal-

ogy to the MAP Files in Micro Star is not complete. The Micro Star

court likened the MAP files to sequels of the Duke Nukem 3D game.215

The MAP files contained new adventures for the game player.216 Once

again, the question arises as to whether or not the edited movie is suffi-

ciently recast, transformed, or adapted from the original to be consid-

ered a derivative work.217

The playback editing device would also be different from the MAP

files if the end user were able to make fine adjustments to how much a

movie is edited-for example, if the user were able to choose to re-

move profanity, but not violence, or to only remove nudity. If the edit-

ing device were to become a user adjustable knob, it may no longer

meet the requirement of having a concrete or permanent representa-

tion of the audiovisual display.218 If the number of editing choices is

limited, a court will probably still find the index to be a concrete or

permanent representation.

In summary, there are two obstacles to overcome in finding the

playback editors liable for infringing the derivative work right. The de-

vices do not incorporate any part of the pre-existing work and the ed-

ited movies may not be sufficiently altered from the originals to be

considered derivative works. The result will largely depend on whether

the Seventh Circuit, the Ninth Circuit, or the Nimmer analysis is used.

It seems likely that the Ninth Circuit would find an infringement of the

derivative work right by the playback editors.

212 See Peter Pan Fabrics, 274 F.2d at 489.

213 See Micro Star, 154 F.3d at 1112 (citing Litchfield v. Spielberg, 736 F.2d 1352, 1356 (9th

Cir. 1984)) (using a "total concept and feel" test of substantial similarity).

214 See id.

215 Id. at 1112.

216 Id.

217 17 U.S.C. § 101 (2003) (listing the definition of a "derivative work").

218 See Micro Star, 154 F.3d at 1111.


D. Contributory Infringement and Vicarious Liability

Although the Copyright Act does not expressly impose liability on

anyone other than direct infringers, courts have recognized that both

contributory and vicarious liability should apply to copyright infringe-

ment.219 If the use of the playback editing device results in the creation

of derivative works, the manufacturers and sellers of playback editing

devices could be found liable.220 In order to be a contributory in-

fringer: (1) the editors must have known or should have known about

the conduct of the home user; and (2) they must materially contribute

to the infringing conduct.221 In order to be vicariously liable: (1) the

editors must be able to control the infringing conduct; and (2) they

must obtain direct financial benefit from the conduct.222

Applying the Ninth Circuit's requirement that a derivative work

must take on a concrete or permanent form, the home user would need

to videotape or capture in digital form, at least temporarily, the result-

ing edited movie.223 The required step of capturing the edited movie

will make finding vicarious liability difficult because the device manu-

facturer and seller will receive no direct financial benefit from this cop-

ying.224 The manufacturers and sellers of the editing device are also not

likely to be contributory infringers because they would have no reason

to suspect that home viewers would tape or digitally capture versions of

the edited movies.225

If we ignore the Ninth Circuit's requirement that derivative works

be in some concrete or permanent form, the end users would be able to

create an infringing derivative work by simply watching the movie

through the playback editing device. In any event, the end users proba-

bly have an implied license to carry out the functions that the editing

device performs on the movies.226 It would be difficult to argue that

people do not implicitly have the right to adjust the volume on their

219 See Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 435 (1984).

220 Id.

221 Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259, 264 (9th Cir. 1996) ("[Olne who,

with knowledge of the infringing activity, induces, causes, or materially contributes to the

infringing conduct of another, may be held liable as a 'contributory' infringer." (quoting

Gershwin Publ'g v. Columbia Artists Mgmt., 443 F.2d 1159, 1162 (2d Cir. 1971))).

222 Gershwin Publ'g v. Columbia Artists Mgmt., 443 F.2d 1159, 1162 (2d Cir. 1971).

223 See Galoob, 964 F.2d at 969.

224 See Gershwin Publ'g, 443 F.2d at 1162.

225 Id.

226 The copyright owners conduct in allowing the movie to be played on a television

would lead a reasonable person to believe they have a right to adjust the volume and picture.

See, e.g., Effects Assocs. v. Cohen, 908 F.2d 555, 558 (9th Cir. 1990) ("A nonexclusive license

may be granted orally, or may even be implied from conduct." (citing Nimmer, supra note

144, §10.03[A], at 10-36)).


72           UCLA ENTERTAINMENT LAW REVIEW                    [Vol. 11:1

television set, or to change the channel momentarily while watching a

movie. As a result of reliance on the implied license, there would be no

direct infringement of the derivative work right.

In conclusion, the playback editors should not be found liable for

contributory infringement, nor should they be found vicariously liable

for home use of their editing device.

E. Fair Use

If the third party editors infringe the studios' exclusive rights to

reproduction and distribution, or their right to prepare derivative

works, then they still have the chance to demonstrate a fair use excep-

tion.227 Fair use is an affirmative defense which allows "would be in-

fringers" the privilege to utilize copyrighted material in a reasonable

manner without the consent of the copyright owner.228 Examples of

fair uses are parody, news reporting, teaching, and "time shifting."'229

In determining if a use is a fair use, there are four non-exclusive factors

that must be examined: (1) The purpose and character of the use, in-

cluding whether such use is of a commercial nature or is for nonprofit

educational purposes; (2) The nature of the copyrighted work; (3) The

amount and substantiality of the portion used in relation to the copy-

righted work as a whole; and (4) The effect of the use upon the poten-

tial market for or value of the copyrighted work.230

The soft-copy editors will claim that reproductions made by copy-

ing a movie from one medium to another should be allowed as a fair

use. They may argue that this copying amounts to "space-shifting" be-

cause the edited versions are only made one for one in place of lawfully

purchased copies.231 If the edited movies are considered derivative

works, a fair use defense could justify the making of these derivative

227 17 U.S.C. § 107 (2003); see also Campbell v. Acuff-Rose Music, 510 U.S. 569, 576

(1994) (discussing the history of the fair use doctrine).

228 See Hustler Magazine, Inc. v. Moral Majority, Inc., 796 F.2d 1148, 1151 (9th Cir. 1986);

see also Campbell, 510 U.S. at 590 (indicating that fair use is an affirmative defense); see also

id. at 575 ("From the infancy of copyright protection, some opportunity for fair use of copy-

righted materials has been thought necessary to fulfill copyright's very purpose, '[t]o pro-

mote the Progress of Science and useful Arts ….”‘ (citing U.S. CoNsT., art. I, § 8, cl. 8.)).

229 17 U.S.C. § 107; Campbell, 510 U.S. at 594 (finding fair use of a parody of Roy

Orbison’s “Pretty Woman”); Sony, 464 U.S. at 454-55; see also H.R. REP. No. 94-1476, 94th

Cong., 2d Sess. 65-66 (1976).

230 17 U.S.C. § 107.

231 See Recording Indus. Ass’n of Am. v. Diamond Multimedia Sys., Inc., 180 F.3d 1072,

1079 (9th Cir. 1999) (holding that a portable MP3 player which downloads copies of sound

recordings, merely “space-shifts” the files that reside on the user’s hard drive and, therefore,

the “space-shifting” was a fair use).


works.232 The playback editors will argue that any potential derivative

works created through the use of their device are a fair use.

1. Purpose and Character of the Use

In examining the purpose and character of the use, there are two

important questions to answer. First, is the use commercial or for non-

profit educational purposes? Second, to what extent is the use


The answer to the first question is straightforward. Both the soft-

copy and playback editors are engaged in a commercial enterprise. The

soft-copy editors are selling unauthorized reproductions of the movies.

This activity clearly cuts against a finding of fair use.234 One company

operates a co-op in which all of the members share in the ownership of

the co-op’s movie collection.235 As the rightful owners of the DVDs

and videocassettes that they purchase, they choose to edit their cop-

ies.236 The editors may argue that these potentially infringing edits of

copyrighted movies are done by the end users and thus are non-com-

mercial.237 Nevertheless, the operation of the co-op itself is a profit-

making commercial enterprise for the soft-copy editors.238 The play-

back editors sell a device that may prepare unauthorized derivative

works. If the makers of the device did not prepare these derivative

works themselves, then home users may create them by watching a

movie with the device. However, the home users probably have no in-

tention of selling the derivative works they create with the playback

editing device and, thus, are not making them for commercial use. The

232 All of the exclusive rights granted in 17 U.S.C § 106 are subject to the fair use excep-

tion in 17 U.S.C. § 107, including the preparation of derivative works. See 17 U.S.C. §106


233 Campbell, 510 U.S. at 579.

234 “[Elvery commercial use of copyrighted material is presumptively an unfair exploita-

tion of the monopoly privilege that belongs to the owner of the copyright ...." Sony, 464

U.S. at 451.

235 Howell, supra note 3. "Users of the service must become co-op members, meaning the

edited videos are in effect their shared property, which they can do with as they see fit." Id.

236 Id. CleanFlicks also states that "[a]s owners of the original, unedited movies, the co-

op has the right to edit out content that is objectionable to its members ….” Id.

237 “Even copying for noncommercial purposes may impair the copyright holder’s ability

to obtain the rewards that Congress intended …. But a use that has no demonstrable effect

upon the potential market for, or the value of, the copyrighted work need not be prohibited

in order to protect the author’s incentive to create. The prohibition of such noncommercial

uses would merely inhibit access to ideas without any countervailing benefit.” Sony, 464

U.S. at 450-51.

238 The operators of the co-op charge a substantial premium to rent the edited versions of

movies. The price for MyCleanFlicks service is significantly higher ($22.85 for two movies a

month) than NetFlix ($19.95 for three movies a month), a similar internet rental company

which rents un-edited movies. See Williams, supra note 4.


74          UCLA ENTERTAINMENT LAW              REVIEW       [Vol. 11:1

Supreme Court made a distinction for ultimate use of the VCR by con-

sumers as being non-commercial in Sony Corp. of America v. Universal

Studios, InC.239 However, "every commercial exchange of goods in-

volves both the giving of the good or service and the taking of the

purchase price. The fact that [one] focuses on the giving rather than

the taking cannot hide the fact that profit is its primary motive for mak-

ing the exchange.”’240 The Supreme Court clarified this point in Harper

& Row v. Nation Enterprises.241 The profit-making motive of the edit-

ing companies cannot be hidden simply by focusing on the home use of

the edited movies.

Is the creation of edited movies transformative? In other words,

does the new work merely replace the object of the original creation or

does it add a further purpose or character?242 The edited movies are

products that allow people who would not otherwise watch certain

movies, because of content they consider objectionable, the opportu-

nity to watch popular Hollywood movies.243 The fact that people are

willing to pay a high premium for the editing service speaks to the value

added by the editing service.244 The potential of the editing technology

as a new way to watch movies tends to favor fair use. On the other

hand, the editors often change the movies very little. The purpose and

character of an edited movie is the same as that of an unedited version.

Both versions are intended for entertainment purposes. The fact that

soft-copy editors place the edited version back into the original movie

packaging also suggests that the new use merely replaces the origi-

nal.245 A lack of transformative use weighs against fair use.246

2. The Nature of the Copyrighted Work

In examining this factor, it is important to recognize that some

works are closer than others to the core of protection intended by copy-

239 See Sony, 464 U.S. at 449.

240 Pac. and S. Co. v. Duncan, 744 F.2d 1490, 1496 (11th Cir. 1984).

241 Harper & Row v. Nation Enters., 471 U.S. 539, 562 (1985) (“The crux of the profit/

nonprofit distinction is not whether the sole motive of the use is monetary gain but whether

the user stands to profit from exploitation of the copyrighted material without paying the

customary price.”).

242 Campbell, 510 U.S. at 579.

243 Rebecca Buckman, A Cottage Industry in Utah Cleans Up Hollywood’s Act, WALL ST.

J., Sept. 19, 2002, at Al (“Companies such as CleanFlicks say Hollywood should instead

embrace the edited movie trend, since religiously devout people in Utah are now renting R-

rated videos, creating a new market for movie studios.”).

244 See Williams, supra note 4.

245 Id.

246 See Campbell, 510 U.S. at 579.


right law.247 This type of distinction is made between creative works

and bare factual compilations.248 A fair use finding should be more

difficult for the former and more appropriate for the latter.249 Most

movies would be considered closer to creative expression than factual

compilations. Movies have even been called “the quintessential art of

the twentieth century.”’250 The creative nature of movies tends to go

against a finding of fair use.251

3. The Amount and Substantiality of the Portion Used

If the infringing use were only a small portion of the copyrighted

work as a whole, then a finding of fair use would be more likely than if

the entire work is appropriated.252 The soft-copy editors are making

copies of the movies substantially in their entirety.253 The only differ-

ence might be a few minutes cut from a two-hour movie.254 Courts still

allow a fair use defense when the entire work is used, but this copying

“militat[es] against a finding of fair-use.”’255

The playback editors are potentially not using any of the copy-

righted expression from the movies.256 But if the court considers the

playback device to create derivative works, then perhaps these editors

also substantially use the entire movies.257

4. The Effect on the Market Value

This factor is the most important component of the fair use analy-

sis.258 It looks at how the potential market for the copyright could be

harmed should the infringement become widespread.259 If the infring-

ing use does not demonstrate any harm to the market of the copy-

247 Id. at 586.

2 Id.; see also Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 348-51 (1991).

249 Feist, 499 U.S. at 348-51.

250 Craig A. Wagner, Motion Picture Colorization, Authenticity, and the Elusive Moral

Right, 64 N.Y.U. L. REV. 628, 635 (1989).

251 Harper & Row, 471 U.S. at 594.

252 See Campbell, 510 U.S. at 586 (citing Justice Story’s words from Folsom v. Marsh, 9 F.

Cas. 342, 348 (No. 4,901) (CCD Mass. 1841), in asking whether or not “‘the quantity and the

value of the materials used’ are reasonable in relation to the purpose of the copying”).

25 See Williams, supra note 4.

254 See Aguilar, supra note 71.

15 See Sony, 464 U.S. at 449-50.

256 See CNNfn: Market Coverage: Tough Call: Turning R into PG, Rhonda Schaffler (CNN

television broadcast, Sept. 27, 2002 (morning)) (Statement of ClearPlay CEO, Bill Aho:

“We’re very different from most of the other companies …. [W]e don’t create an alternate


257 The resulting derivative work would include the entire movie minus the edited scenes.

258 Harper & Row, 471 U.S. at 566.

259 Campbell, 510 U.S. at 590.


76           UCLA ENTERTAINMENT LAW REVIEW                    [Vol. 11:1

righted work, then a finding of fair use is appropriate.260        One

important reason is that the non-harming use would not create any dis-

incentive to those who create copyrightable works.

The soft-copy editors will argue that placing the edited movies

onto lawfully purchased original tapes or putting the DVD-R copies

into original packaging causes no harm to the studios' existing home

video or DVD market.261 Both the soft-copy editors and playback edi-

tors can argue that the editing will cause an increase in the sale of uned-

ited movies. Both of the editing options require a lawfully purchased

copy in order to watch the edited version.262

One important question is whether or not the selling of the edited

movie versions or the sale of the playback editing device will harm the

studios' potential market to sell their own edited versions.263 The stu-

dios are not in this business at the moment, but there is no reason that

the studios could not get into the business of selling edited movies. Stu-

dios produce edited versions for play on network television and for in-

flight performances on airlines.264 Since the studios can easily sell their

own edited versions and it is also within their copyright to license

others to make the edited versions, this fourth factor goes against a

finding of fair use in third party editing.

The final step in the fair use analysis is to balance the factors in

accordance with Supreme Court precedent.265 In balance, the commer-

cial nature of the editing enterprises and the loss of the market to li-

cense the edited versions will make finding a fair use for both soft-copy

and playback editing difficult.266 Thus, third party editors are infring-

ing the copyrights in the movies they edit.

5. Beyond the Usual Fair Use Factors

The statutory fair use provisions make clear that the statutory fac-

tors are non-exclusive and that courts are free to consider other rele-

vant matters in the fair use analysis.267      Several of the editing

260 See id. at 593-94.

261 Williams, supra note 4.

262 Id.

263 Harper & Row, 471 U.S. at 568 (indicating that the test "must take account not only of

harm to the original but also harm to the market for derivative works").

264 See DGA BA, supra note 143, provision 7-509.

265 The Supreme Court has approached the "fair use" question three times since 1984. In

balancing the factors, these benchmark decisions act as guideposts.

266 The importance given to the first and fourth factors in Sony and Harper & Row are


267 See Campbell, 510 U.S. at 575; see also Harper & Row, 471 U.S. 550 n.3 ("This 'equita-

ble rule of reason,' permits courts to avoid rigid application of the copyright statute when, on

occasion, it would stifle the very creativity which that law is designed to foster." (citations


companies have claimed that viewers have a First Amendment right to

watch edited movies in their homes.268 This argument would probably

fail for the reason that people could choose to turn off the television

rather than watch PG-13 or R-rated films. However, the argument

need not even be considered, because the Supreme Court has ruled

that the fair use doctrine effectively replaces the First Amendment de-

fense of copyright infringement.269 Perhaps there is an argument that

people need to watch edited movies for religious reasons. Could an

action be brought under the Religious Freedoms Restoration Act, bet-

ter known as RFRA?270 There is no religious exercise that requires

people to view these movies.271 As a result, RFRA will not offer any

relief to the editors.

Should the benefits of having edited movies be considered under

fair use? The four listed statutory factors focus heavily on market harm

to the copyright owner and do not give much consideration to possible

benefits from the infringing use. Under a traditional fair use analysis,

the direct benefits of editing technology to consumers are likely to be

taken into account only when considering the transformative nature of

"the purpose and character of the use."272 The benefits may be dis-

counted if the edited movies do not amount to new "expression, mean-

ing, or message."'273 Finally, consideration of these benefits may be

overwhelmed in traditional fair use analysis because the "purpose and

character of the use" is dominated by the fact that the use is


The purpose of fair use is to ensure the public benefit by encourag-

ing the creation of new works.275 Fair use exceptions are given to in-

omitted)); 107 U.S.C. §107 (2003) (stating that the factors to be considered "shall include"

the numbered factors); H.R. REP. No. 94-1476, 94th Cong., 2d Sess. 65-66 (1976) ("[Tlhere is

no disposition to freeze the [fair use] doctrine in the statute, especially during a period of

rapid technological change. Beyond a very broad statutory explanation of what fair use is

and some of the criteria applicable to it, the courts must be free to adapt the doctrine to

particular situations on a case-by-case basis.”).

268 See Item No. 14 of Original Compl. in Huntsman v. Soderbergh, Civ. No. 02-M-1662

(MJW) (D. Colo. filed Aug 29, 2002).

269 Harper & Row, 471 U.S. at 560.

270 42 U.S.C.A. §2000bb (2003).

271 Id. (RFRA requires that “governments should not substantially burden religious exer-

cise without compelling justification.”); see, e.g., Worldwide Church of God v. Phila. Church

of God, Inc., 227 F.3d 1110 (9th Cir. 2000).

272 Campbell, 510 U.S. at 579.

273 Id.

274 Id. 578.

275 Id. at 579 (“[T]he goal of copyright, to promote science and the arts, is generally fur-

thered by the creation of transformative works. Such works lie at the heart of the fair use

doctrine’s guarantee of breathing space within the confines of copyright …. ).


78           UCLA ENTERTAINMENT LAW REVIEW                    [Vol. 11:1

fringing uses when the incentive for creation of new works is not

hindered.276 The relatively small amount of third party movie editing

will probably not cause the movie studios to consider creating fewer

new movies. Any hindrance from this infringement may be minuscule

when compared to the profits made by studios in the home video mar-

ket. On the other hand, directors may feel less inclined to create new

movies when they feel the work will be altered without their consent.277

There is also a possibility that the editing will become widespread to

the point of squeezing out the unedited versions.

There are many valid reasons why home viewers should be able to

watch movies without profanity, violence, or nudity. The edited movies

protect children, satisfy moral objections, and generally allow viewers

the comfort of knowing that the movies they watch for entertainment

purposes will entertain without being offensive.278 It is true that people

could choose to watch only G-rated films, but the selection of films

would be extremely limited.279

In summary, the interests of the home viewers in having the choice

to watch edited movies are best accounted for by including some analy-

sis of these benefits under the fair use defense.

F. Moral Rights and Substitutes

In several European countries, including most notably France, au-

thors of creative works enjoy additional inalienable rights alongside the

economic rights set forth in American copyright law.280 These addi-

tional rights of attribution and integrity allow an author who has parted

with his economic rights in a copyright to prevent any intentional muti-

lation or distortion of his works.281 The U.S. has been cautious in al-

lowing moral rights into American law.282 At least one commentator

276 The Copyright Clause, U.S. CONST. Art. I, § 8, cl. 8, empowers Congress "[t]o pro-

mote the Progress of Science and useful Arts ……

277 Some video stores will only carry one version of a movie, either edited or un-edited.

See Lyman, supra note 33.

278 See Aguilar, supra note 71.

279 Of the films released and rated by the Motion Picture Association of America

(“MPAA”) between January 1 and November 24, 2002, 68% were rated R, 18% were PG-13,

9% were PG, and 4% were rated G. All of the MPAA movie ratings are available at http://

www.MPAA.org (last visited Jan. 14, 2004).

280 France, Law of March 11, 1957, art. 1 (amend. July 3, 1985) (UNESCO translation).

For an overview of moral rights in France, see Jane C. Ginsburg, French Copyright Law: A

Comparative Overview, 36 J. COPYRIGHTS Soc’Y 269 (1989).

281 See Carter v. Helmsley-Spear, Inc., 71 F.3d 77, 81 (2d Cir. 1995).

282 For a discussion of why the United States should not be so quick to adopt a doctrine of

moral rights, see Robert A. Gorman, Federal Moral Rights Legislation: The Need for Cau-

tion, 14 NOVA L. REV. 421, 422 (1990) and Pierre N. Leval, Toward a Fair Use Standard, 103

HARV. L. REV. 1105, 1128 (1990).


has suggested that by joining the Berne Convention in 1989, the U.S.

has implicitly recognized that artists have a legal interest in what hap-

pens to works they create even after they part with the copyright.283

With passage of the Visual Artists Rights Act (“VARA”) in 1990, Con-

gress granted rights of attribution and integrity to authors of visual

art.284 Motion pictures do not fall within the statutory definition of a

“visual art” and, furthermore, authors who create “works made for

hire” are excluded from receiving rights of authorship under VARA.285

Moreover, American copyright law is clear in stating that adherence to

the Berne Convention does not in any way enlarge the rights of artists

under Title XVII.286 In addition, Berne does not prevent moral rights

from being waived or transferred to the studio copyright owners at the

time a director is employed.287

Some commentators have suggested that other aspects of U.S. law

provide an effective equivalent of a moral rights doctrine.288 These

commentators propose that by combining tort law remedies of defama-

tion, rights of publicity and privacy, along with contractual remedies

and provisions of the Lanham Act, it may be possible for authors to

protect their work from being mutilated or distorted in a way that nega-

tively affects their honor or reputation.289 Of these options, the Lan-

ham Act probably offers the directors their best chance at an

injunction, but courts have stopped short of holding that the Act im-

plies any moral rights of authorship.290

Having established that the directors are not the copyright owners

of the movies they direct, there may still be a contractual obligation on

283 See Wagner, supra note 252, at 633.

4 Rights of Certain Authors to Attribution and Integrity, 17 U.S.C.A § 106A (2003).

285 17 U.S.C. § 101 (2003) (stating the definition for “work of visual art”).

286 See Section 2 of the Berne Convention Implementation Act of 1988, Pub. L. No. 100-

568, 102 Stat. 2853 (Oct. 31, 1988) (providing that the Act is not self-executing under the

laws of the United States, and that no further rights or interests are created for purposes of

Berne adherence).

287 ROBERT A. GORMAN & JANE C. GINSBERG, COPYRIGHT 533 (4th ed. 2002) (“The

Berne Convention, however, does not prohibit waiver or alienation of [rights of attribution

and integrity], so long as a transfer of economic rights is not deemed of itself to effect a

transfer of moral rights.”).

M See Martin Raeder, The Doctrine of Moral Right: A Study in the Law of Artists, Au-

thors and Creators, 53 HARV. L. REV. 554, 575 (1940); see also Roberta Rosenthal Kwall,

Copyright and the Moral Right: Is an American Marriage Possible?, 38 VAND. L. REV. 1, 21-

23 (1985).

289 See Kwall, supra note 289. A discussion of the common law tort remedies is beyond

the scope of this Comment.

290 Foremost, the Lanham Act is a federal law whereas the other tort remedies are a mix

and match of state laws which may not afford consistent protection nationwide. For an ex-

ample of the Lanham Act as a moral rights alternative, see Gilliam v. ABC, Inc., 538 F.2d 14

(2d Cir. 1976).


80           UCLA ENTERTAINMENT LAW REVIEW                       [Vol. 11:1

the studio copyright owners to protect the directors' interests. Depend-

ing on the status of the directors, they may have provisions in their

personal services contracts that limit the ways in which their movies can

be edited.291 These provisions can restrict ways in which the studio can

edit the movies or license other parties to edit them. The terms may

also extend to work done by third party editors. Unfortunately for the

directors, courts have often construed ambiguities in personal services

contracts in favor of the studios.292

The Directors Guild of America represents the major Hollywood

directors.293 With respect to the editing of movies, the guild has se-

cured guarantees from the studios through collective bargaining.294

One guild provision gives the director the opportunity to participate in

editing versions of their movies for DVD or videocassette distribution,

receiving in return no compensation.295 The fact that directors would

agree to work for no compensation, demonstrates how important the

issue of editing movies is to them. The current DGA Basic Agreement

only limits editing that is performed by the studio and at the studio

facilities.296 There are no provisions guaranteeing the enforcement of

the copyrights in motion pictures and, thus, the DGA has no recourse

against third party companies that edit the movies.297 In sum, the cur-

rent collective bargaining agreement does not allow the directors any

say in how their movies are edited by third parties that are not author-

ized by the studios.

291 See John J. Dellaverson, The Director's Right of Final Cut-How Final is Final?, 7

ENr. & SPORTS LAW, Summer/Fall 1988, at 8-9 (discussing the common provisions of a direc-

tor's personal services contracts as they relate to the final cut of a motion picture).

292 Wagner, supra note 252, at 660 (citing Preminger v. Columbia Pictures Corp., 267

N.Y.S.2d 594 (Sup. Ct. 1966) and Stevens v. NBC, 76 Cal. Rptr. 106 (1969)).

293 See http://www.dga.org for a description of the Directors Guild of America (last vis-

ited Jan. 14, 2004).

294 See DGA BA, supra note 143, provisions 7-501 to 7-520.

295 Id. at 7-509(g) ("If a theatrical motion picture is licensed by the Employer for exhibi-

tion on a domestic national basic cable service, or for domestic in-flight exhibition or for

domestic videodisc/videocassette distribution, and the Employer edits such motion picture at

its own facilities in the United States, the Director shall have the right to edit the English

language version of the motion picture at no additional compensation .....

296 Id.

297 Article 50 of the Writers Guild of America 1998 Theatrical and Television Basic

Agreement protects the copyrighted work of guild signatory writers of television programs,

giving the writers the standing to sue to protect the copyright. The language is similar to that

of "beneficial ownership" of copyright. (The writers are ineligible to become "beneficial

owners" because their writings are "works made for hire.") Writers under this agreement

would have standing to sue third party copyright infringers. There is no corresponding pro-

vision in the DGA BA.



In conclusion, the directors are not likely to prevail in securing an

injunction under the Lanham Act against the third party editors. The

use of a clearly labeled disclaimer will probably prevent a finding of

likelihood of confusion, and the editing of a few minutes of movies will

in most cases not be substantial enough to sustain a claim of false ad-

vertising. In addition, there is a valid argument that the directors are

not likely to be harmed economically by the third party editing. The

directors are also not likely to prevail on a claim of dilution of their

famous names. Only a few of the directors will satisfy the requirements

of fame and distinctiveness, and even these directors will find difficulty

in proving actual harm as required by the Supreme Court in Moseley.

On the other hand, the case for copyright infringement is much

stronger. It seems clear that the soft-copy editors are infringing the

copyright owners' exclusive rights to reproduction and to make deriva-

tive works of their movies. The playback editors may be infringing the

reproduction right by creating the indexed edit lists. There is also a

solid argument that the playback editors are infringing the derivative

works right by making and selling a device that sends edited movies to

a television screen. The directors will not be able to establish beneficial

ownership rights in the copyrights and do not have standing to sue for

copyright infringement. They must rely on the movie studios.

The studios are not obligated to enforce the movie copyrights in

favor of the directors' desires and may allow the editing to continue in

some form. It is up to the studios to decide if the editing of movies

should take place. One possible outcome of this litigation is that the

movie studios could completely side with the directors by preventing

third party editing. Such a scenario may be wishful thinking for film-

makers. The potential market for product placement advertising and

market demand for more viewer choice will likely entice studios to cre-

ate their own digitally altered movies. At the very least, they may want

to open up an additional revenue stream by licensing the editing work.

The issue of artistic integrity of the movies could eventually be resolved

through collective bargaining negotiations between the studios and


Although the directors cannot completely stop the editing of their

movies without help from the studios, they may be able to gain a voice

in the editing process. If the studios license the third party editors or

decide to sell their own edited versions, then the directors could con-

298 The next scheduled negotiations between the Directors and Studios will be in 2005, but

the parties could come to an agreement at any time.


82          UCLA ENTERTAINMENT LAW REVIEW                  [Vol. 11:1

tract with the studios for a say in the editing. One possibility is to bar-

gain for a provision in the DGA Agreement that would allow a director

to supervise editing done by licensed third party editors. Such a provi-

sion could allow a director to state reasonable objections to the studio

that licenses the editing. Any dispute as to the reasonableness of a di-

rector’s objections would be subject to neutral arbitration.299 As a con-

cession, the directors could agree to supervise the edits for little or no


The interests of home viewers who prefer not to watch objectiona-

ble content in movies would ideally be satisfied by the rightful copy-

right owner meeting the market demand and offering edited versions.

If the copyright owner chooses not to offer edited versions, there is a

much better case for allowing unauthorized third party editing under a

fair use exception. A proper fair use inquiry will balance the interests

of all parties involved by taking into consideration the important bene-

fits of having the choice to watch edited movies at home.

299 DGA BA, supra note 143, provision 2-101.

Volume 08, Issue 1, pp 1-26, Baker

 Finding a Winning Strategy Against the
 MP3 Invasion: Supplemental Measures
 the Recording Industry Must Take to
 Curb Online Piracy

 Robert T. Baker*

     "For in much wisdom is much grief" and he that increaseth
     knowledge increaseth sorrow. "-Ecclesiastes 1:18


     To most scholars of intellectual property law, its fundamental purpose
 reads like a sacred oath: "to create the most efficient and productive bal-
 ance between protection (incentive) and dissemination of information, to
 promote learning, culture and development."' Historically, the United
 States has achieved this goal by allowing owners of intellectual property
 to control access to their work for a limited time before releasing it into
 the public domain.2 Ironically, the very technology this law has sought to
 encourage and "protect" may prove to be its undoing. Over the last dec-
 ade, the computer file format known as "MP3" has posed a significant
 threat to the music industry, violating copyright owners' legally pro-

 * Robert T. Baker is an alumnus of the University of California at Los Angeles
 School of Law, Class of 2000. He is currently Director of Rights Management at
 Pearson Television/RTL Group, an international media company owned in part by
 Bertelsmann. The majority of this article was written prior to Bertelsmann's partner-
 ship with music file-sharing service Napster.
   Twentieth Century Music Corp. v. Aiken, 422 U.S. 151, 156 (1975).
   2 U.S. CONST. art. I, § 8, cl. 8.


 scribed rights, and transforming anyone with a standard computer into a
 potential grand-scale pirate.
     The industry will not survive this new trend by relying exclusively
 on the law, nor will it recover simply by implementing anti-piracy
 technology. By themselves, these measures will only amount to a huge
 waste of resources. Instead, it makes much more sense for record
 companies to manipulate the basic economics of the problem by of-
 fering consumers a more attractive alternative to MP3. Part II of this
 article will discuss how technology like MP3 has led to new trends in
 music piracy, and Part III will delineate the statutes and decisions that
 have responded to the problem. Part IV will analyze the most publi-
 cized measures taken by the recording industry to curb piracy, and
 Part V will present supplemental strategies-online sales, negative ad-
 vertising, and exploitation of new digital storage media-that may
 solve the problem more effectively.


 A.    The First Digital Recording Threat

     Fifteen years ago, if a typical consumer wished to own a copy of a
 popular song, she had two options: she could either spend five to fifteen
 dollars to purchase the song on vinyl, cassette, or compact disc ("CD"),
 or duplicate a friend's copy on a double-deck analog cassette recorder.
 The former option was the legal way, obviously preferred by composers,
 musicians, retailers, and record labels. The Copyright Act of 1976 had
 granted the owner(s) of the song's copyright the exclusive right "to re-
 produce the.., work in copies or phonorecords" or to authorize others to
 do so? Selling retail phonorecords of the song had developed into a lu-
 crative way to exploit this right.
     The latter option-home duplication-was technically illegal at
 the time, but was not considered much of a threat. Such duplication
 techniques led to degradation in quality strongly noticeable when
 compared to the pristine digital sound of the recently introduced CD.
 Moreover, with each generation of analog duplication, the copy lost

 3  17 U.S.C. § 106(1).


 even more sound quality, leaving only a muffled mutant of the origi-
 nal. In short, our consumer may have initially dubbed a tape to pre-
 view the music she liked, but if she were a true audiophile she would
 eventually lay down the cash for a high quality copy at the record
     The complacency of the recording industry was soon replaced by a
 chilly fear when in 1986 Japanese manufacturers introduced digital audio
 tape (" DAT" ).4 This new technology allowed consumers to create a
 flawless reproduction of the crystal clear sound contained on a CD, with
 no quality lost from generation to generation. Fearing that business would
 be stunted by home engineers who no longer had the incentive to pay for
 music, the industry stalled U.S. marketing of DAT machines and lobbied
 Congress to regulate the potential piracy problem.' The result was pas-
 sage of the Audio Home Recording Act (" AHRA") in October of 1992.6
     The AHRA modified the law in three major ways: first, it legalized
 the "noncommercial use by a consumer of a device or medium for mak-
 ing digital musical recordings or analog musical recordings."7 Second, it
 established a system by which copyright holders would receive royalty
 payments from the sale of digital recording devices such as DAT ma-
 chines.8 Third, it authorized a "Serial Copy Management System"
 (" SCMS") to prevent copied digital audio recordings from being dupli-
 cated beyond one generation, and imposed penalties on any party that cir-
 cumvents SCMS.9 With passage of this act, Congress recognized that
 technology had outpaced the law, that it would be futile to sue or prose-
 cute every consumer who made use of the new digital recording technol-
 ogy. Instead, it pursued a more practical solution by regulating the de-
 vices' distribution and allowing for anti-piracy technology.
     Fortunately for the recording industry, the DAT did not go over well
 with consumers, settling only into a small niche among professional mu-

   4 Alex Ben Block, Digital Dream, Digital Nightmare, FORBES, Nov. 3, 1986, at
   ' Dennis McDougal, Way Cleared to Import Digital Audio Tapes, LA TIMES,
 Mar. 2, 1988, at 1.
   6 See 17 U.S.C. § 1001-1010.
   7 Id. § 1008.
   8 Id. § 1003(a).
   9 Id. § 1002(c), § 1002(a).



 sicians and sound engineers.° Two years later, Sony's marketing cam-
 paign for a new recordable digital "mini disc" similarly flopped, showing
 that consumers were not quite ready to overhaul their music collections
 again with yet another format.'I It seemed that the angel of music piracy
 had passed over the music industry, leaving business undisturbed. In
 truth, it had yet to arrive.

 B.    Music Goes Online: The Internet and MP3

     Around the time the AHRA was being tempered in Washington, the
 world was getting acquainted with the Internet, "a giant network which
 interconnects innumerable smaller groups of linked computer net-
 works." 12 An experimental project spearheaded by the Advanced Re-
 search Project Agency ("ARPA") in 1969,"3 the Internet saw only eso-
 teric use for roughly twenty years until Internet Service Providers
 ("ISPs") such as Prodigy, CompuServe, and America Online made it
 more accessible to consumers.4
     By 1994, users could easily manipulate Internet interfaces such as e-
 mail, the World Wide Web ("WWW" or "web"), electronic Bulletin
 Board Systems ("BBS"), and Internet Relay Chat ("IRC") "rooms" to
 send digital files to one another.5 Of course, it did not take them long to
 start illegally exchanging intellectual property, baiting copyright holders
 into litigation. In Playboy Enterprises, Inc. v. Frena, plaintiff sued the
 operator of a small BBS for facilitating the digital exchange of protected
 photographs,16 while in Religious Technology Center v. Netcom On-line
 Communications Services, Inc., plaintiff sued an ISP for allowing a user
 to post portions of copyrighted scripture online'7 (legal ramifications of

   "0 Tom Krehbiel, Turn It Up: Amplifier Technology Sizzling in Summer's Hazy
 Days, BUFFALO NEWS, July 15, 1994, at G24.
   " Barry Fox, Big screen to little disc, LONDON TIMES, Aug. 19, 1994, 1994 WL
   12 ACLU v. Reno, 929 F. Supp. 824, 830 (E.D. Pa. 1996).
   1' Id. at 831.
   "4 See Mick O'Leary, CompuServe at the Crossroads, LINK-UP, Nov. 1, 1990, at
 22. See also Ric Ford and Rick LePage, Prodigy vs. Quantum: An On-line Contrast,
 MACWEEK, Dec. 5, 1989, at 50.
   " See Phil Patton, Life on the Net, EsQUIRE, Dec. 1, 1994, at 131.
   16 Playboy Enterprises, Inc. v. Frena, 839 F. Supp. 1552, 1554 (M.D. Fla. 1993).
   17 Religious Technology Center v. Netcom On-Line Communications Services,


 Netcom are discussed in Section III).
     While such cases illustrated how easily the Internet could be used to
 pirate text and graphics, musical copyright holders could still rest easily.
 By late 1995,18 the fastest modem available to most consumers ran at 33.6
 Kbps.'9 While typical text files and digital pictures range from 1 to 500
 KB in size,20 a pop-song-length digital sound file taken off of a standard
 CD in WAV or AIF2" format is enormous,22 ranging from 26 to 40 MB in
 size.23 Transmission of a four-minute WAV file over a 33.6 Kbps modem
 could take hours, an inconvenience to even the most patient of infringers.
 For the time being, music piracy remained thwarted-not by the law, but
 by the steep time cost of downloading data.
     In their struggle for more efficient song swapping, online audiophiles
 soon disinterred a long-lost treasure. In 1988, representatives from sev-
 eral international corporate and academic organizations had founded the
 Moving Picture Experts Group (" MPEG") to develop standards for the
 "coded representation of moving pictures, audio and their combina-
 tion."24 The group had introduced two formats which are now commonly
 used to store and send media files: "MPG" and "MP2." 25 Concentrating

 Inc., 907 F. Supp. 1361, 1365-1366 (N.D. Cal. 1995).
   "8 Joanna Pearlstein, After Modems Peak, What's Next?, MACWEEK, Nov. 6,
   1995, 1995 WL 13800027.
   "9 "Kbps" is the standard nomenclature for "kilobits per second." "Bit" is short
 for "binary digit," the smallest possible unit of computer data. One kilobit equals
 1,000 bits. These units are generally used to measure data transfer rates. PC Webo-
 pedia - Data Transfer Rates category page (last visited Apr. 30, 2000), at
 http://webopedia.intemet.com/networks/datatransfer rates/.
   20 "KB" is the standard nomenclature for "kilobyte." There are eight bits in one
 byte of information, and 1,024 bytes in one KB. Thus, 1 KB equals 8,192 bits. These
 terms are generally used to measure data storage volume. PC Webopedia - Data
 Sizes   category    page    (last   visited  Apr.    30,   2000),    at
   21 WAV and AIF are two uncompressed digital audio formats
   22 Red Symons, Tarnished Metallica, TIME OUT, Jul. 2, 2000, at 21.
   23 "MB" is the standard nomenclature for "megabyte." There are 1,024 KB in
 one MB. Id. A CD holds 650 MB of data, or 74 minutes worth of music. What to
 look for in a CD-R or CD-RW, DALLAS MORNING NEWS, Mar. 9, 2000, 8F.
   24 MP3 Glossary, DALLAS MORNING NEWS, Dec. 16, 1999, at 6F.
   21 Plugged In, NEWSDAY, Oct. 13, 1999, at C05.



 on audio files, the German engineering firm Farunhofer Schaltungen then
 developed the most advanced format in the series: MPEG 1, Audio Layer
 3-more notoriously known as MP3. By eliminating "noise" supposedly
 imperceptible by the human ear, MP3 is able to compress a WAV file at a
 10:1 ratio. The result is near CD-quality sound at one tenth its original
     The rediscovery of MP3 in the late nineties coincided with a wide-
 spread increase in Internet connection speed. Home users moved from
 33.6 Kbps modems to 56 Kbps modems, DSL, and cable,26 while busi-
 nesses, libraries, and universities adopted lightning-speed ISDN, TI, and
 T3 lines.27 All of a sudden, a song that once took hours to download
 could take a wired college student less than a minute to grab from the
 web. Two such college students recently added the finishing touches to
 the MP3 revolution by easing the playback and exchange of sound files.
 In 1997, former University of Utah student Justin Frankel created Wi-
 namp, a program whose interface resembles a jukebox with a home stereo
 console.2' Two years later, Northeastern University student Shawn Fan-
 ning created Napster, a "peer-to-peer" service allowing online subscrib-
 ers to search each other's hard drives for MP3 files, eliminating the hassle
 of trying to find them on ephemeral web sites29 (the implications of Nap-
 ster are discussed in Part IV). In March of 2000, Frankel and Nullsoft's
 Tom Pepper raised the stakes yet again with the creation of Gnutella,
 software that facilitates the peer-to-peer exchange of not just MP3s, but
 all computer files.3°
     Exciting technological advances have thus emerged from clandestine
 government agencies, foreign laboratories, and university dorm rooms.
 But with them has come a heated controversy. To many consumers, the
 ability to build extensive archives of free music is a tremendous boon.
 But to artists and producers, who depend on copyright protection to profit

   26 Gregg Keizer, The Best and Worst ISPs, PC WORLD, Nov. 1, 2000, at 148.
   27 TI lines are capable of carrying 1.544 Mbps, or 1,544 Kbps. T3 lines are ca-
 pable of carrying 43 Mbps, or 43,000 Kpbs. PC Webopedia - Internet Access cate-
 gory     page      (last    visited    Apr.     30,     2000),     at
   28 Karl Taro Greenfeld, Disabling the System, TIME, Sep. 6, 1999, at 26.
   29 G. Beato, Trading Spaces, SPIN, May 2000, at 118, 120.
   30 Jane Paradiso, Hungry for Freedom? Try Gnutella, EMPLOYEE BENEFIT NEWS,
 Sep. 1, 2000, 2000 WL 10182759.


 from their work, this new power is a threat. When revenue dries up, the
 incentive to create theoretically dries up with it, leaving consumers with
 less art and music to enjoy. By this rationale, MP3 piracy is a potential
 nightmare for all parties involved, and the record industry is justified in
 battling it. Unfortunately, their current strategies are far from promising.


 A.    Direct Infringement and its Consequences

     Under the U.S. Copyright Act 17 U.S.C. § 106, one who holds a valid
 copyright in a particular work may exclusively reproduce3' and distribute
 that work,32 or authorize others to do so. If a defendant is found to have
 directly violated these or any other rights granted by § 106, she may be
 subject to an injunction,33 or liable for actual or statutory damages.34 She
 faces criminal penalties if she has willfully infringed "for purposes of
 commercial advantage or private financial gain." 35
     As discussed in Section II, the AHRA prevents actions from being
 brought against those who use digital recording devices to reproduce
 copyrighted works for noncommercial purposes. However, as it does not
 address the use of multipurpose computers and computer components,
 cyberspace copycats remain vulnerable.6 In addition, the No Electronic
 Theft ("NET") Act of 1997 amended the Copyright Act in three major
 ways to broaden the circumstances under which one could be held crimi-
 nally culpable.37 First, "financial gain" is now defined to include "re-
 ceipt, or expectation of receipt, of anything of value, including the receipt
 of other copyrighted works."38 Second, the NET Act specifies that crimi-

   31 17 U.S.C. § 106(1).
   32 Id. § 106(3).
   33 Id. § 502.
   34 Id. § 504.
   35 Id. § 506.
   36 Cameron Heffemnan, You Say You Want a Revolution: Music on the Web, PC
 WORLD ONLINE, Nov. 1999, 1999 WL 28599096.
   31 See The No Electronic Theft ("NET") Act: Summary of Changes to the Crimi-
 nal Copyright and Trademark Laws (last modified Feb. 18, 1998), at
   38 17 U.S.C. § 101 (1997).



 nal culpability could result from reproducing or distributing over $1,000
 worth of copyrighted works "by electronic means" as well as tangible.39
 Third, the NET Act drastically increases penalties for subsequent of-
     As a result of this legislation, our consumer could still legally use a
 digital recording device to duplicate a song onto an analog tape, CD, or
 DAT for non-commercial purposes. But if she tried to trade that copied
 song for "anything of value," or post over $1,000 worth of music on the
 Internet, she could be looking at fines and/or jail time.40 This is exactly
 what happened to University of Oregon student Jeffrey Levy in the fall of
 1999.41 The first person to be convicted under the NET Act, Levy had op-
 erated a web site on which he had posted thousands of unauthorized
 copyrighted works, including MP3 files, worth at least $70,000. Levy
 avoided up to three years in jail and $250,000 in fines by pleading guilty,
 and was instead sentenced to two years' probation with limited Internet
 access. Though Levy is so far the only defendant to have been convicted
 for MP3 piracy, he presents the likely profile of future defendants to be
 sued or prosecuted for direct infringement: a college student with high
 speed Internet access and pitifully few assets to seize.

 B.    Contributory Infringement and Vicarious Liability

     Though not specifically mentioned in the Copyright Act of 1976, two
 other judicial theories of liability have arisen to expand the class of de-
 fendants in infringement cases: vicarious liability and contributory in-
 fringement.42 A permutation of a common tort law doctrine, vicarious li-
 ability is imposed upon a defendant who had the right and ability to
 control a third party's infringing activity, failed to stop it, and received a
 direct financial benefit from it.43 Under the theory of contributory in-
 fringement, a defendant is liable if she had known of a third party's in-

   " Id.. § 506(a)(2) (1997).
   40 18 U.S.C. § 2319 (1997).
   4' Fred Goodman, The First MP3 Bust, ROLLING STONE, Oct. 14, 1999, at 129.
   42 Sony Corporation of America v. Universal City Studios, Inc., 464 U.S. 417,
 435 (1984).
   4' Netcom Online Communications Services, 907 F. Supp. 1361, 1368 (N.D.
 Cal. 1995).


 fringing activity and materially contributed to it.44 Both of these theories
 have proven more appealing to copyright holders where direct infringers
 are anonymous and too numerous to sue effectively. Instead, plaintiffs
 attack the root of the problem: "deep pocket" companies that manufac-
 ture recording equipment or provide consumers with online access. How-
 ever, litigation has led to mixed results.

     1.    Case Law Treatment of Contributory Infringement and
           Vicarious Liability

     In Sony Corporation of America v. Universal City Studios, Inc., the
 Supreme Court addressed the doctrines of vicarious liability and con-
 tributory infringement in great detail. Respondents had sued appellant for
 manufacturing video tape recorders (" VTRs"), which they claimed en-
 abled consumers to make unauthorized copies of copyrighted television
 programs. In rejecting respondents' claim for vicarious liability, the Court
 concentrated on the relationship of the appellant to infringing consumers:
     ...in other situations in which the imposition of vicarious liability is
     manifestly just, the "contributory" infringer was in a position to control
     the use of copyrighted works by others and had authorized use without
     permission from the copyright owner. This case, however, plainly does
     not fall in that category. The only contact between Sony and the users of
     the Betamax that is disclosed by this record occurred at the moment of
     Such minimal contact did not constitute the kind of relationship by
 which appellant would be able to control a direct infringer's activity, thus
 the theory of vicarious liability did not apply.
     Next, the Court used patent law as a framework for developing an
 important limitation on the theory of contributory copyright infringe-
 ment.46 Under the Patent Code, the seller of a product "suitable for sub-
 stantial noninfringing use" is not liable for contributory infringement.47
 Arguing that this limitation strikes a reasonable balance between the in-
 terests of copyright holders and those engaged in "substantially unrelated
 areas of commerce," the Court applied it to the case at bar:

   44 Sega Enterprises v. MAPHIA, 857 F. Supp. 679, 686 (N.D. Cal. 1994).
   41 Sony, 464 U.S. at 786.
   46 Id. at 787.
   "7 31 U.S.C. § 271(c).



     Accordingly, the sale of copying equipment, like the sale of other arti-
     cles of commerce, does not constitute contributory infringement if the
     product is widely used for legitimate, unobjectionable purposes. Indeed,
     it need merely be capable of substantial noninfringing uses.48
     Liability for contributory infringement thus turned on the VTR's ca-
 pability for "commercially significant noninfringing uses.",49 This test
 was satisfied when the Court moved on to find the recording of television
 programming-whether authorized or unauthorized-a fair use. In doing
 so, it was spared from having to clarify the term "commercially signifi-
 cant" or quantify the term "substantial." In the case of a machine or
 service capable of both legitimate and illegitimate uses, the Court de-
 clined to establish a precise test for third party liability.
     The majority in Sony emphasized that it could only work within the
 parameters of existing copyright statutes, and could not "apply laws that
 have not yet been written."50 As discussed in Section I, the AHRA sig-
 nificantly altered those statutes less than a decade later in the context of
 copyrighted audio. There was now no question as to whether the non-
 commercial use of audio equipment to record copyrighted material was a
 fair use. However, manufacturers of digital audio recording devices were
 still required to jump through a few hoops to release themselves from li-
 ability: the price of the devices had to include a royalty paid to copyright
 holders, and the equipment itself had to conform to the aforementioned
 SCMS anti-piracy technology.
     In what had become by then a tiresomely familiar attempt to fight the
 tide of technology, the Recording Industry Association of America
 (" RIAA") tried to use the AHRA to win an injunction against Diamond
 Multimedia Systems ("Diamond") in 1998.51 Diamond was on the verge
 of releasing the Rio, a portable, battery-operated device that can down-
 load up to 64 MB worth of MP3 files from a personal computer for easy,
 frictionless playback. Consumers now had a quick, painless way of free-
 ing MP3 files from their personal computers and taking them on the run.

   48 Sony, 464 U.S. at 788.
   49 Id. at 789.
   50 Id. at 796.
   5 "The RIAA is a trade organization representing the creators, manufacturers,
 and distributors of over ninety percent of all legitimate sound recordings." Record-
 ing Industry Association of America, Inc. v. Diamond Multimedia Systems, Inc., 29
 F. Supp. 2d 624, 625 (C.D. Cal. 1998).


 Fearing that the Rio would "dramatically stimulat[e] the traffic in illegal
 MP3 files," the RIAA employed a tactic similar to Universal's, attacking
 the manufacturer of the device rather than its end-users.2
     The RIAA claimed that Diamond violated the AHRA by failing to in-
 corporate SCMS technology into the Rio. Though Federal District Judge
 Audrey B. Collins defined the Rio as a digital audio recording device for
 purposes of the AHRA, she nonetheless denied the injunction.3 Because
 the Rio is incapable of uploading data to another machine, it would be an
 "exercise in futility" to require its downloads to include the copyright
 and generation status information required by SCMS.14 Ultimately, the
 RIAA "failed to demonstrate a sufficient causal relationship between this
 'wrongful conduct' and [its] alleged injuries."55 Indeed, a trial on the
 merits would likely reveal that the Rio is not the source of the piracy
 problem at all. Its inability to upload actually accomplishes the primary
 goal of SCMS by preventing further serial copying. In light of this dis-
 couraging opinion, the RIAA was left to settle its lawsuit against Dia-
 mond and target other parties in its crusade to prevent contributory in-

     2.    ISP Exemption Under the Digital Millennium Copyright Act

     To employ the doctrines elucidated by Sony, the RIAA had to find a
 defendant who had either profited from infringing activity that it could
 have controlled, or who materially contributed to activity that it knew
 was in violation of copyright law. Few parties meet these criteria better
 than ISPs. By offering Internet access, ISPs provide their users with the
 tools necessary to locate, reproduce, and distribute copyrighted material
 online. Many profit from their services by selling subscriptions or adver-
 tising space. Many also have the ability to revoke the accounts of users

   52 Id. at 633.
   11 Id. at 632.
   54 Id.
   55 Id.
   56 The suit was settled on undisclosed terms. Technology - MP3 Sends Music
 Industry   Back   to   School   (last  visited Apr.  30,  2000),  at
 See also Stephen M. Kamarsky, Managing Copyright in Digital Marketplace: Sys-
 tem may be Redefined by Music Distribution War, NEW YORK LAW JOURNAL, Oct.
 18, 1999, at S4.



 who violate their policies. Thus, it seems they were wide open to both vi-
 carious liability and suits for contributory infringement. However, a mere
 two days after the court delivered its opinion in RUAA, ISPs were condi-
 tionally shielded by yet another piece of federal legislation.
     In ratifying treaties recently drafted by the World Intellectual Prop-
 erty Organization,57 the Digital Millennium Copyright Act ("DMCA")
 introduced several provisions tailored for cyberspace activity. Among
 them is a new statute which limits the liability of ISPs,58 broadly defined
 as "provider[s] of online services or network access, or the operator[s] of
 facilities therefor," for coordinating online transmissions.59 To qualify for
 protection, a provider must first (a) implement a policy terminating the
 accounts of users who repeatedly infringe, and (b) cooperate with copy-
 right holders that implement anti-piracy technology.6° Then, the provider
 must meet several specific conditions depending on the type of online
 service it provides. For example, if it has inadvertently stored infringing
 material on its system as on a web site,6' or referred users to infringing
 material as through a search engine,62 it must expeditiously block access
 to the material upon notice of infringement. If it acts as an automatic
 conduit in the exchange of infringing material (e.g. by offering an e-mail
 service), it must have exercised no direct control over the exchange.63
     This section of the DMCA essentially codifies the decision reached
 three years before in Netcom, in which the court released a BBS operator
 from liability under the same basic conditions for unknowingly posting
 infringing material.64 It is the latest attempt to address an issue that has
 reared its ugly head constantly, from Sony through passage of the AHRA:
 when a product or service facilitates both legitimate and infringing activ-
 ity, to what extent should the law limit its use? Should its manufacturer or
 operator be held liable for the potential abuse of what is otherwise an in-
 novation with tremendous societal benefits? Should the same legalized

   " See Carolyn Andrepont, Digital Millennium Copyright Act: Copyright Protec-
 tions for the DigitalAge, DEPAUL-LCA J. ART & ENT. L. 397, 398.
   58 See 17 U.S.C. § 512.
   59 Id. § 512(k).
   60 Id. § 512(i).
   61 Id. § 512(c).
   62 Id. § 512(d).
   63 Id. § 512(a).
   64 Netcom, 907 F. Supp. 1361, 1366 (N.D. Cal. 1995).


 monopoly that is meant to advance one kind of intellectual property be
 used to hinder the progress of another? The answer, as collected from
 these landmark decisions and legislative acts, is a qualified "no" that
 grows stronger with each dispute and technological leap.


 A.    Taking Legal Action

     1.    Chasing Direct Infringers

     The MP3 piracy epidemic of course begins with the pirate herself: the
 direct infringer. After she has popped a copyrighted CD into her com-
 puter's CD-ROM drive, used "ripping" software to copy one of its songs
 into MP3 format, and logged onto the Internet, violation of § 106 becomes
 quick and easy via e-mail, chat rooms, web sites, or BBS. The RIAA has
 employed a team of investigators to comb the Internet on a daily basis
 looking for such violations.65 Before the DMCA took effect, they regu-
 larly sent out thousands of cease-and-desist letters to the operators of pi-
 rate web sites, suing those that refused to comply.66 Though this tactic led
 to the removal of hundreds of sites, it proved to be ridiculously futile.
 Most of the sites shut down were on university servers, suggesting that
 the most useful remedy available was an injunction against a near insol-
 vent college student. Meanwhile, in the time it took to locate a site with
 MP3 files, determine which ones were illegal, send a letter, receive a re-
 sponse, serve notice, set a court date, and reach either settlement or deci-
 sion, countless other webmasters had set up pirate sites. Thus, the vicious
 cycle would begin again.

     2.    Targeting ISPs such as Napster

     Passage of the DMCA has since made this tactic a bit more manage-
   65 Doug Bedell, The Box that Roared: MP3 Format Expected to Proliferate Even
 as Music Industry Tries to Safeguard Recordings, DALLAS MORNING NEWS, Dec.
 16, 1999 at 6F.
   66 Janelle Brown, Heat Turned Up on Digital Music Pirates (last visited Apr. 30,
 2000), at http://www.wired.com/news/culture/0, 1284,10234,00.html.



 able. Instead of hopelessly chasing direct infringers around cyberspace,
 the RIAA and other copyright holders may now simply notify ISPs of
 user misconduct. If an ISP wishes to maintain its statutory immunity, it
 must quickly pull the plug on offensive sites and transfers. Otherwise, it
 may have its deep pockets picked in a contributory infringement suit.
 However, investigators still face the formidable task of actually locating
 infringing material. Wary of the RIAA's "search and destroy" campaign,
 many traders have developed creative ways to keep themselves anony-
 mous and undetected. Some have started communicating in code to avoid
 the scrutiny of chat room hosts, and privately exchanging files via e-mail
 instead of web sites.67 Thus, while the DMCA has more clearly defined
 the parameters of infringement suits, traders' skilled use of technology
 may leave plaintiffs with little basis even for a complaint.
     Another shortcoming of anti-piracy statutes like the AHRA and
 DMCA is the legal myopia their drafters inevitably suffer when trying to
 tame new trends in technology. No matter how comprehensive the act is
 intended to be or how broad its definitions are, it is only a matter of time
 before some new program or service finds a loophole to squeeze through;
 it is only a matter of time. Diamond's Rio provides a perfect example of a
 threatening new machine that fits the description of a digital audio re-
 cording device, yet circumvents the AHRA in a way Congress could not
 have anticipated in 1992. Similarly, the ISP known as Napster has re-
 cently armed its subscribers with the easiest known way to distribute
 copyrighted MP3 files, yet it seemingly qualifies for immunity under the
     A unique hybrid of chat room and search engine, Napster has made
 the most publicized use of peer-to-peer technology, a revolutionary new
 form of online networking. With software downloaded from the Napster
 web site, a subscriber logs onto a separate server that connects her with
 thousands of other subscribers currently online.6' The program then takes
 inventory of the MP3 files on her hard drive and makes them accessible
 to every other subscriber. Thus, the more subscribers there are online, the
 more MP3 files there are to download. By entering the names of desired

   67 Doug Bedeil, The Box that Roared: MP3 Format Expected to Proliferate Even
 as Music Industry Tries to Safeguard Recordings, DALLAS MORNING NEWS, Dec.
 16, 1999 at 6F.
   68 G. Beato, Trading Spaces, SPIN, May 2000, at 118.


 songs into Napster's search engine, our audiophile can assess the precise
 quality of the recordings before downloading several at a time from other
 subscribers' hard drives.
     The Orwellian eeriness of allowing strangers to snoop into their per-
 sonal files apparently has not kept hundreds of thousands of college stu-
 dents from regularly logging onto Napster. As a result, many university
 computer networks have been so overwhelmed by traffic that they have
 been forced to ban its use.69 The new sensation has also brought out the
 RIAA once again with guns blazing. On December 6, 1999, it filed suit in
 the U.S. District Court in San Francisco, accusing Napster of contributory
 infringement and vicarious liability.70 Relying heavily on the DMCA, the
 RIAA has sought to close what it calls a "haven for music piracy on an
 unprecedented scale."'" It is right about that much, but it may find to its
 dismay that the DMCA actually works against it.
     As mentioned in section III, the DMCA groups the activity of ISPs
 into four categories: (1) transmission and routing, (2) system caching, (3)
 system storage, and (4) information location.72 The court will most likely
 find that Napster is engaged in transmission and routing, as it primarily
 acts as a conduit for material exchanged between its subscribers. For an
 ISP to be exempt from liability for this activity, the DMCA requires: (1)
 that another entity initiate the transmission of infringing material, (2) that
 the transmission be carried out through an automatic technical process,
 (3) that the ISP not select recipients of transmitted material, (4) that the
 material not be cached for any longer than necessary, nor copied for any-
 one but the recipient, and (5) that the ISP not modify the material during
 transmission.73 Napster clearly meets all of these criteria. The company
 itself does not initiate transmission of MP3 files; its subscribers do. Nap-
 ster's activity is automatic; it selects neither the files to be transmitted nor
 their recipients. Finally, the files are neither cached nor modified as they
 travel from one subscriber to another. Thus, at least one of the DMCA's

   69 Id. at 120.
   70 Ground Zero: The Future of Digital Music (last visited Apr. 30, 2000), at
   71 Bill Holland, RIAA Sues MP3 Search Site, BILLBOARD, Dec. 18, 1999, at 9.
   72 17 U.S.C. § 512. See also Jonathan Band, Short Analysis of the DMCA (last
 visited Apr. 30, 2000), at http://www.dfc.org/issues/graphic/2281/JB-Index/jb-
   73 17 U.S.C. § 512(a).



 tests seems to release Napster from liability.
     Because Napster also incorporates a search engine into its program,
 the RIAA may claim that it is engaged in "information location." To
 avoid liability for this activity, an ISP must satisfy a test that draws heav-
 ily from the theories of vicarious liability and contributory infringement.
 It cannot receive any financial benefit directly attributable to the material
 it locates, and cannot exercise control over its access.74 Furthermore, it
 must have neither actual knowledge nor notice that the located material
 infringes copyright law. If it acquires such notice, it must comply with
 DMCA procedure and expeditiously remove the offensive material.
     Though Napster indeed has the right and ability to control its sub-
 scribers' activities, it was still offering beta software75 and subscriptions
 for free at the time of printing.76 And though it may have some difficulty
 denying the general notion that its service is a "haven for music piracy,"
 Napster is still protected from liability until it receives notice of in-
 fringement. For example, if an RIAA investigator were to run a search on
 a Napster subscriber and discover that she was illegally posting an exten-
 sive archive of copyrighted songs, the investigator would have to notify
 Napster of her infringing activity. Napster then would be obligated to
 audit the subscriber's activity the next time she logged on, and terminate
 her account if the RIAA's claim were verified. This is the somewhat
 painstaking procedure dictated by the DMCA, but it is one that the court
 will likely require the RIAA to follow before it entertains some blanket
 infringement suit against Napster. Napster is also confident in this read-
 ing of the DMCA, as evident from the "MP3 Copyright Policy" located
 on its web site:
     In accordance with the Digital Millennium Copyright Act of 1998...
     Napster will respond expeditiously to claims of copyright infringement
     committed using the Napster service that are reported to Napster's
     "Designated Copyright Agent"... If you are a copyright owner, or
     authorized to act on behalf of an owner of the copyright or of any exclu-
     sive right under the copyright, please report your notice of infringement
     by completing [a] notice form and delivering it to the Designated Copy-

   74 Id § 512(d).
   7' The "beta" version of a product or software is the version users test for de-
 fects before a final commercial release
   76 Napster.com   I   Download   (last  visited Nov.  10,  2000),  at



     right Agent.77
     The statement reads almost as a taunting challenge to the RIAA and
 any other litigious copyright holders. Perhaps it was too cavalier: In July
 of 2000, U.S. District Judge Marilyn Hall Patel enjoined Napster from
 continuing its file-sharing service pending a trial on the merits.78 Two
 days later, the 9th U.S. Circuit Court of Appeals granted Napster a stay of
 the injunction, prolonging the litigation for months on end. Fearing Nap-
 ster's potential demise, Internet audiophiles have been busy learning to
 use other file-sharing software such as Gnutella and Freenet, whose near-
 anarchic peer-to-peer architecture allows transfers to go virtually unde-
 tected through cyberspace.79
     So far, two more plaintiffs have joined the fray. In April of 2000, re-
 cording artists Metallica and Dr. Dre filed their own infringement suits
 against Napster and several of the universities that still offer access to the
 service.8° Both plaintiffs have faced the same legal issues outlined above,
 but must also deal with unexpected backlash from thousands of their fans.
 In May of 2000, Metallica forced Napster to audit and terminate the ac-
 counts of 317,000 individual subscribers accused of illegally copying its
 songs.81 The move has recently been named one of the "sleaziest mo-
 ments in rock," transforming Metallica's image from that of rebellious
 icons to a group of parsimonious corporate sell-outs.82
     Even if the DMCA is applied more in these plaintiffs' favor than in
 Napster's, Justice Stevens' cryptic comments in Sony may serve to defuse
 their claims. It is easy to forget that the reproduction and distribution of
 MP3 files are not illegal per se. Many unsigned musicians have in fact
 encouraged the free exchange of their songs, hoping for exposure and
 publicity.83 Also, an MP3 file could just as easily be a recording of sound

   77 Napster   Copyright  Policy  (last visited  Apr.  30,   2000),  at
   7' Don Waller, Napster CEO Wants to Settle Fight 'Privately', VARIETY, July
 31, 2000.
   79 Greg Milner, Anarchy From the UK., SPIN, September 2000, at 164.
   80 Dr. Dre files suit against Net music firm, Napster (last visited Apr. 30, 2000),
 at http://dailynews.yahoo.com/h/nm/20000426/en/music-napster_4.html.
   81 Don Waller, Napster Ousts 317,000 Users, DAILY VARIETY, May 11, 2000.
   82 See Greg Milner, Kill Them All, SPIN, October 2000, at 116.
   83 Thousands of these "free" files are posted at www.mp3.com as part of the
 company's primary business model. Coincidentally, the RIAA recently sued



 in the public domain. In light of this, at least some of the activity that
 Napster facilitates is perfectly legal, which may lead the court to question
 whether it is capable of "commercially significant noninfringing uses."
 Though Justice Stevens declined to define this term, and though his
 opinion was concerned with recording equipment rather than an online
 transmission and routing service, the rule and dicta in Sony may arm
 Napster with another sound defense.
     The events described above illustrate the folly in relying on the law to
 counter MP3 piracy. Locating direct infringers to sue is expensive and
 time-consuming, seldom leads to adequate compensation, and hardly de-
 ters future infringers. Targeting ISPs for contributory infringement and
 vicarious liability is equally fruitless, as the DMCA's tedious procedures
 must be followed before either party sets foot in court. Finally, lobbying
 Congress for further revision of the Copyright Act is also a wasteful en-
 terprise, since technology tends to transform faster than
     Congress can define its transformations. By itself, the law is as effec-
 tive a weapon against piracy as outdated medicine is against the ever-
 mutating AIDS virus. To maintain its property-and dignity-the music
 industry must look elsewhere for answers.

 B.    Implementing Anti-Piracy Technology

     1.    Digital Watermarking and Encryption

     Because music pirates have gained such an advantage over the re-
 cording industry by riding the wave of rapidly changing technology, it
 makes more sense for the industry to adopt a strategy that beats them at
 their own game. Having reluctantly acknowledged this, it has begun re-
 search in two technological fields that promise to prevent infringement
 before music even leaves the studio: steganography and cryptography.
 Steganography, or the science of "covered writing," concerns the hiding
 of information within a larger document and its subsequent extraction.84

 mp3.com on an unrelated copyright infringement claim and won on April 28, 2000.
 See Biz Sees MP3. com Ruling as Victory for Copyrights, DAILY VARIETY, May 1,
 2000, at 1.
   14 See Rosemarie F. Jones, Comment, Wet Footprints? Digital Watermarks: A


 Advances in steganography have led to the use of "digital watermarks,"
 which are embedded imperceptibly in files, and designed to withstand
 conversion and duplication." Just as traditional paper watermarks convey
 proof of authenticity, digital watermarks may carry copyright notice, se-
 curity codes, or even a recording's duplication history.86 This would al-
 low copyright holders to identify the chain of potential defendants more
 easily in an infringement suit. Furthermore, any attempt to remove a
 digital watermark from a recording would result in a noticeable degrada-
 tion in quality, making counterfeits more conspicuous and reducing the
 incentive to copy in the first place.87
     Cryptography governs the process by which digital information is
 rendered unintelligible by a mathematical algorithm until the correct pro-
 gram or password "unscrambles" it.88 The encryption of recordings pro-
 vides copyright holders with an additional way to protect their works, al-
 lowing only authorized users to access them. A more advanced form of
 encryption allows files to be copied for a limited number of times before
 scrambling them beyond recognition. Together with digital watermarks,
 these encryption techniques form just the kind of serial copy management
 system envisioned by the AHRA.

     2.    The Secure Digital Music Initiative

     The mass implementation of digital watermarks and encryption tech-
 nology is one of the central schemes behind the Secure Digital Music
 Initiative (" SDMI"), an extensive pan-industrial anti-piracy measure
 started in December of 1998.89 The SDMI is a forum through which in-
 formation technology firms, consumer electronics companies, and mem-
 bers of the recording industry have begun to develop "open technology
 specifications for protected digital music distribution."'90 Ironically, Dr.

 Trail to the Copyright Infringer on the Internet, 26 PEPP L. REV. 559, 568 (1999).
   11 Id. at 569.
   86 Id. at 570.
   11 Id. at 569.
   88 Id. at 572.
   89 Secure Digital Music Initiative (SDMI) Fact Sheet (last visited Apr. 30, 2000),
 at http://www.riaa.com/sdmi/sdmi fact sheet.htm.
   90 SDMI       FAQ       (visited    Apr.      30,     2000),      at



 Leonardo Chiarlglione, a key figure in the development of the notorious
 MPEG standards, has been named its Executive Director.91 The SDMI
 has sought to establish a digital watermarking system by which member
 companies must abide in order to remain "SDMI compliant." Digital
 music players produced by member companies would then be designed to
 accommodate all SDMI-compliant file formats. Then, as Stephen M.
 Kamarsky speculates, "[b]ecause 90 percent of the music sold in the US
 is handled by members of the SDMI consortium, it is likely that most
 commercially distributed music will soon carry the SDMI watermark and
 be playable only on SDMI compliant devices." 92 Thus, software compa-
 nies and electronics manufacturers have two distinct incentives to comply
 with the SDMI: first, their products would attract consumers by incorpo-
 rating a convenient, nearly universal platform. Second, they would avoid
 the risk of selling music players that become obsolete as record compa-
 nies begin watermarking their music catalogues.
     However, even this master plan has its drawbacks. As with the United
 Nations, one cannot expect to round up organizations with such divergent
 interests and expect them to agree on everything. Software companies
 and hardware manufacturers have obstinately opposed the recording in-
 dustry's demand that their players only accommodate SDMI-compliant,
 watermarked files, as it would force them to abandon the MP3 enthusiasts
 in their consumer base. As a result, the recording industry has conceded:
 the SDMI standard has now been revised to include even non-SDMI-
 compliant formats such as MP3. Though the issue may be rendered moot
 if record companies begin exclusively releasing pirate-proof music, such
 debates have caused the forum to stall. In the last fifteen months, the
 world has seen MP3.com go public and watched Napster wreak havoc.
 Meanwhile, the SDMI has yet to implement even the first phase of its
 plan effectively. Consultants have so far hacked at least two of the five

   "1 Worldwide Recording Industry and Technology Companies Kick Off Work of
 Secure  Digital Music Initiative (last visited Apr. 30, 2000), at
 http://sdmi.org/pr/LA Feb 26 1999_PR.htm.
   92 Stephen M. Kramarsky, Managing Copyright In Digital Marketplace: System
 May Be Redefined by Music Distribution War, NEW YORK LAW JOURNAL, Oct. 18,
 1999, at S4.


 security technologies proposed for the protection of online music.93 Per-
 haps this "new world order" is not the most efficient way to combat pi-
 racy either.


     By exclusively relying on the law, pan-industrial cooperation, and
 anti-infringement technology, record companies are losing the war
 against MP3 piracy. While these strategies may serve to slow down the
 epidemic, they are too expensive and time-consuming to stop it effec-
 tively. Thus, the industry would do well to keep these "defensive" meas-
 ures in place, but direct more of their resources toward a more "offen-
 sive" economic plan: competition.

 A.    Launching Anti-MP3 Marketing Campaigns

     As SDMI members begin the arduous task of developing a more se-
 cure alternative for digital music delivery, they need not sit idly by and
 watch MP3 grow in popularity. In all of the hype, few journalists have
 bothered to comment on the true sound quality of an MP3 file, or ask ex-
 actly what "near CD quality" means. In truth, the MP3 compression pro-
 cess permanently sloughs off some of the data from a sound file in order
 to reduce it to one tenth its original size.94 The process also introduces
 pockets of noise called "artifacts" into the sound signal that become no-
 ticeable during lulls in a song. These quality modifications make it ex-
 tremely difficult for MP3 files to convey the delicate sounds of a clarinet,
 violin, or human voice in a pleasing way. The result led reviewer Cam-
 eron Heffernan recently to conclude that a "highbrow audiophile may
 deplore the damage MP3 does to tone and phrasing. But if you prefer the
 Ramones Fan Club to the Musical Heritage Society, chances are com-
 pressed audio will serve you nicely." 95
     Indeed, most MP3 enthusiasts, sitting in their dorm rooms, are of the
 latter class of aesthetes. But the hassles brought on by MP3 do not end

   93 Ann Donahue, Hackers Beat Music Labels' Encryption, VARIETY, Nov. 10,
 2000, at 5.
   9' Cameron Heffernan, You Say You Want a Revolution: Music on the Web, PC
 WORLD    ONLINE, November 1999     (last visited Dec. 16, 2000), at
 http://www.pcworld.com/news/article.asp?aid= 12980.
   95 Id.



 with sound quality. The old adage that "you get what you pay for" often
 applies very well to free downloaded bootlegs. The pirate who initially
 ripped and posted an MP3 file may have encoded it at a low frequency or
 sub-par "bit rate." She may have taken the song from a cheaply burned
 CD-R-a bootleg from a bootleg-which some critics have claimed leads
 to degradation.96 She may have erroneously named the file, leading to the
 download of an undesired song. Finally, the file may contain mysterious
 skips and pops that simply cannot be explained.
     The numerous drawbacks of MP3 technology present record compa-
 nies with a tremendous advertising opportunity that they have so far curi-
 ously ignored. As the CD is a product empirically superior to the mystery
 bootlegs floating around cyberspace, perhaps consumers need only be
 reminded by commercials that trumpet slogans such as "Compact discs:
 Why settle for less?" or "Are the best things in life really free?" Print
 ads may feature images of pasty-faced, bleary-eyed kids staring at error
 messages on their computer screen. Radio spots may amplify the cacoph-
 ony of artifacts lurking in a typical MP3 file. If the dirty truth about MP3
 becomes more widely reported, and if record companies attack its Achil-
 les' Heel with an aggressive advertising campaign, they may begin to see
 their old customers wandering home again. Of course, what those cus-
 tomers find and where they find it will also be crucial.

 B.    Moving Online

     Barak D. Jolish of the law firm Hancock Rothert & Bunshoft recently
 presented his own comprehensive solution to the MP3 piracy problem.97
 He suggested that record companies themselves begin to distribute their
 music digitally online, while continuing to use the RIAA as their legal
 strong arm. By offering downloadable songs at prices well below their
 retail price on CD, record companies may begin to convert the pirates
 back into consumers. The RIAA's otherwise ridiculous "cat-and-mouse
 game" against direct infringers may not effectively stop the illicit ex-
 change of MP3s, but it may present consumers with enough of a hassle to
 start looking for a convenient alternative. Jolish explains:

   96 See Paul Tatara, Hewlett-Packard CD-Writer Music (Review), AUDIO, Janu-
 ary 2000, at 83.
   9' Barak D. Jolish, Scuttling the Music Pirate: Protecting Recordings in the Age
 of the Internet, 17 ENT. & SPORTS LAW. 9, 12 (1999).



     Consumers who know that, for instance, they legally can obtain the sin-
     gle they want for 50 cents may not bother searching through unreliable
     pirate sites for the same music. In other words, consumers may be will-
     ing to forgo the marginal savings of pirate sites in exchange for the in-
     dustry site's superior convenience and service.98
     This point can even be applied to the fearsome Napster juggernaut.
 As Napster begins terminating individual accounts in response to the
 RIAA's threats, subscribers will be left: (a) to openly infringe again,
 risking more severe penalties under the NET Act, (b) to develop elaborate
 codes in order to continue trading in chat rooms, or (c) just to go to the
 label's site and download a song for less than a cup of coffee. Given such
 economic factors as risk and opportunity cost, the most rational option is
 of course (c).
     To their credit, the five major companies in the music industry (War-
 ner, EMI, Universal, Sony, and BMG) have caught on to this strategy,
 announcing immediate plans for online digital music distribution by the
 end of 2000.99 Taking one step further in this direction, BMG parent
 Bertelsmann surprised the entertainment industry in October of 2000 by
 announcing a partnership with Napster and backing out of the RIAA's
 lawsuit.''0 The two companies seek to develop a payment structure for the
 service that will satisfy copyright holders and song swappers alike. These
 recent developments show that the brightest future of the music industry
 will emerge through cooperation and competition, not litigation.

 C.    DVD-A, DSD, and Other Potential In-Store Attractions

     Jolish admits that record companies will inevitably suffer a loss in
 revenue for offering downloadable music at low prices.'°1 Though the
 loss will be offset somewhat by reduced overhead and distribution costs
 (online transfers require no pressing, packaging, shipping, etc.), the major
 companies may find themselves spending more money to compete with
 online startup labels. Meanwhile, what happens to their brick-and-mortar
 operations? The dawn of the digital download has led Ryan Henriquez of

   98 Id
   99 Justin Oppelaar, BMG Joins the Band, DAILY VARIETY, Oct. 10, 2000.
   'o0 Justin Oppelaar, BMG, Napster in Duet, DAILY VARIETY, Nov. 1, 2000, at 1.
       Barak D. Jolish, Scuttling the Music Pirate: Protecting Recordings in the Age
 of the Internet, 17 ENT. & SPORTS LAW. 9, 12 (1999).



 the law firm Hughes Hubbard & Reed to the extreme position that "rec-
 ord stores, record contracts, record companies, and physical records
 themselves (including the descendant CD) all face extinction in their cur-
 rent forms. . . " 10' Again, even if there is any truth to this bleak predic-
 tion, the industry need not helplessly wait for it to materialize.
     Electronics manufacturers have announced the impending release of
 two new audio disc formats: Digital Versatile Disc Audio ("DVD-A")
 and Super Audio Compact Disc ("SACD").*13 Both will use the same
 physical surface, the same DVD-formatted disc from which many con-
 sumers now prefer to view movies and video. The same size as standard
 CDs, these discs are capable of storing over seven times more informa-
 tion, or 4.7 GB.104 DVD-A and SACD use this enormous amount of
 space to increase sound quality far beyond that of any CD. DVD-A
 promises to add surround sound to its listening experience, while SACD
 offers compatibility with CD players currently on the market. Further
 fears of incompatibility have been largely dispelled by the announcement
 of universal players that will accommodate DVD-A, SACD, and DVD
 video. On top of it all, the discs will employ sophisticated digital water-
 marking and encryption technology to arm them against piracy.
     If marketed properly, DVD-A, SACD, and DVD could be the ulti-
 mate solution to record industry's MP3 headache. Here are sound files
 that are too large to pipe through current broadband lines conveniently,
 that employ ironclad anti-piracy technology, that must be sold or trans-
 ferred tangibly, and that sound fathoms better than CDs, let alone MP3s.
 Compatibility with current machinery means that the formats may be
 phased in gradually, rather than forced upon unwilling consumers all at
 once. And even if increased sound quality is not the factor that draws
 consumers back to record stores, record companies can use DVD discs to
 store interactive multimedia, pristine photographs, artwork, text-based
 biographies, rare concert video footage, etc. The possibilities are endless.

   '02 Ryan S. Henriquez, Facing the Music on the Internet: Identifying Divergent
 Strategies for Different Segments of the Music Industry in Approaching Digital Dis-
 tribution, 7 UCLA ENT. L. REV. 57, 131 (1999).
   103 Steven Harris, Universal Player Spans DVD-A, SACD, ELECTRONIC
 ENGINEERING TIMES, Dec. 6, 1999, at 73.
   104 "GB" is the standard nomenclature for "gigabyte." There are 1,024 MB in
 one GB. PC Webopedia - Data Sizes category page (last visited Apr. 30, 2000), at

 L8: 1



     For decades, the only things copyright holders really needed to de-
 fend their rights were good lawyers and lobbyists. With exponential
 jumps in technology, this is simply no longer the case. Even if an alterna-
 tive, pirate-proof digital audio format existed, it would be in danger of
 failure if consumers had no reason to abandon their free and easy MP3
 files. Failure is more imminent in a committee that requires pan-industrial
 cooperation. Furthermore, ill-conceived attempts to combat piracy often
 backfire, raising the ire of consumers as Metallica so woefully discov-
     These sluggish efforts will be effective in the long run only if the mu-
 sic industry acts quickly to supplement them with more aggressive coun-
 termeasures. By pouring more resources into economically "offensive"
 strategies, it will see the MP3 craze finally subside. If record companies
 rapidly continue to compete with pirates online, expose the inherent
 weaknesses of MP3, and hasten the release of DVD-A and SACD tech-
 nology, MP3 is sure to go the way of the eight-track tape. Only then may
 an increase in wisdom and knowledge mean an end to their sorrow.



Volume 05, Issue 1, pp 103-140, Kaiser

 The Future of Cable Regulation Under
 the First Amendment: The Supreme
 Court's Treatment of Section 10(a) of
 the Cable Television Consumer
 Protection and Competition Act of 1992
 Jeffrey D. Kaiser*
    The Supreme Court's plurality opinion in Denver Area Educa-
 tional Telecommunications Consortium, Inc. v. FCC' will likely
 change the way in which courts analyze speech restrictions on cable
 television for First Amendment purposes.2 The Denver plurality for-
 mulated and utilized an ad hoc standard to review the speech restric-
 tions at issue. However, the plurality's standard departs substantially
 from firmly-established First Amendment precedent and was based
 upon an analytical approach that had previously been applied only to
 broadcast communications. Specifically, the plurality's analysis failed
 to take into consideration the fundamental differences between cable
 " I would like to express my sincere appreciation to Professor Michael Froomkin,
 whose guidance and insightful comments, made preparation of this comment possi-
   2 U.S. CONST. amend. I. provides that "Congress shall make no law.., abridging
 the freedom of speech, or of the press ...."
 104          UCLA ENTERTAINMENT LAW REVIEW                    [Vol 5:103
 television and broadcast television which necessitate separate and dis-
 tinct treatment under the First Amendment.
     In Denver, the Court reviewed three sections of the Cable Televi-
 sion Consumer Protection and Competition Act of 1992.3 The plural-
 ity opinion upholding section 10(a),4 written by Justice Breyer and
 joined by Justices Stevens, O'Connor, and Souter, is especially note-
 worthy because it sets a major precedent cable television regulation
 under the First Amendment.5 Section 10(a) applies only to leased ac-
 cess channels,6 and permits cable operators7 to censor programming
 that the cable operator reasonably believes to be patently offensive.
 The plurality analyzed section 10(a) by "closely scrutinizing [section]
 10(a) to assure that it properly addresses an extremely important
 problem, without imposing, in light of the relevant interests, an unnec-
 essarily great restriction on speech."' The Court's approach deviated
 significantly from well-established First Amendment precedent, af-
 firmed as little two years earlier in Turner Broadcasting System, Inc.
   I Pub. L. No. 102-385, 106 Stat. 1460, §§ 10(a), 10(b), and 10(c), 47 U.S.C. §§
 532(h), 532(j), and 531 note (1996).
    ' Section 10(a)
    permit[s] a cable operator to enforce prospectively a written and published policy of
    prohibiting programming [on leased access channels] that the cable operator rea-
    sonably believes describes or depicts sexual or excretory activities or organs in a
    patently offensive manner as measured by contemporary community standards.
  47 U.S.C. § 532(h) (1996). Section 10(a) amended 47 U.S.C. § 532(h), which was
  established in the Cable Communications Policy Act of 1984 (1984 Act) Pub. L. 98-
  549, 98 Stat. 2779 (codified as amended in scattered sections of 47 U.S.C.).
  ' This Comment focuses solely on the plurality's treatment of section 10(a). The
  Court also reviewed and struck down sections 10(b) and 10(c) as unconstitutional.
  Denver, 116 S. Ct. at 2390-97. Section 10(b) required cable operators to segregate
  and block "patently offensive" sex-related material on leased access channels. 47
  U.S.C. § 5320) (1996). Section 10(c) permitted cable operators to prohibit "patently
  offensive" material on public access channels. 47 U.S.C. § 531 note (1996).
  6 Leased access channels are channels that federal law requires a cable operator
  to set aside for commercial lease by unaffiliated third parties. Denver, 116 S. Ct. at
  ' Cable operators are those who provide cable service over a cable system in
  which they are responsible for the management of, control, or own a significant in-
  terest in. 47 U.S.C. § 522(5) (1996).
  1 Denver, 116 S. Ct. at 2385.
 v. FCC.9 The plurality chose this novel approach because the uncertain
 and unfinished stage of cable television's development made it "un-
 wise and unnecessary" to determine a bright line First Amendment
 rule applicable to all subsequent litigation involving cable television.'°
 However, the Court's approach leaves the legal status of cable televi-
 sion in a state of confusion and provides only vague guidance for fu-
 ture application by lower courts.
     This comment critiques the plurality's analysis of section 10(a)
 and considers the probable effects of this decision on the future of ca-
 ble television regulations under the First Amendment. Section II pro-
 vides a general background of speech regulation and cable television.
 In particular, this section discusses the development of permissible
 television regulation under the First Amendment, justifications for
 television regulation, and special First Amendment problems facing
 the regulation of television. The distinction, or lack of one, between
 broadcast and cable television is also be explained. In section III, this
 comment describes and critiques the plurality's treatment of section
 10(a). Section IV then discusses two analytical frameworks that the
 Denver plurality refused to apply in their analysis of section 10(a):
 strict scrutiny and common carrier treatment. The bases for the plural-
 ity's refusal to apply those two approaches is also examined. Section
 V then presents the serious and potentially harmful implications of
 Denver for both cable television and the First Amendment.
    The First Amendment subjects and regulation of speech to a com-
 plex and factually intensive analysis of not only the regulation, but
 also the medium at issue. It is therefore necessary to examine the
 factual circumstances and precedent faced by the Court in their analy-
 sis of section 10(a).
   9 512 U.S. 622 (1994). But cf Seminole Tribe of Fla. v. Florida, 116 S. Ct.
 1114, 1127 (1996) (describing stare decisis as a "principle of policy," not an "in-
 exorable command" which the Court has not felt obligated to follow if the precedent
 is "unworkable" or "badly reasoned") This is particularly true in constitutional
 cases where it is very difficult to correct problems through legislation.
   10 Denver, 116 S. Ct. at 2385; id. at 2402 (Souter, J., concurring). But see
 Fall 1997]
 106         UCLA ENTERTAINMENT LAW REVIEW                  [Vol 5:103
 A.    The Threshold of Speech Regulation: Obscenity vs. Indecency
     In analyzing regulations on speech under the First Amendment, it
 is first necessary to distinguish between indecent speech and obscene
 speech. Indecent non-obscene speech is entitled to First Amendment
 protection," whereas obscene speech considered to be outside the
 scope of the First Amendment.'2 The "patently offensive" program-
 ming that section 10(a) permits cable operators to prohibit is synony-
 mous with "indecent speech,"'3 and is therefore speech that is pro-
 tected by the First Amendment.
     Although indecent speech merits First Amendment protection, the
 Supreme Court has permitted the government to place some narrowly-
 defined restrictions on the transmission of indecent speech, albeit in
 ways that are consistent with the First Amendment.'4 Notably, the
 Court has gradually increased the degree of restriction that is permis-
 sible under the First Amendment through a series of decisions, culmi-
 nating in Denver.
 B.    Content Regulation of Speech and Constitutional Scrutiny
     In analyzing restrictions on indecent and other types of protected
 speech, the Supreme Court has focused on whether the restriction is
 content-neutral, in which the restriction equally discriminates against
 all speakers, or content-based, in which the restrictions discriminate
 among speakers based upon the content of their speech.'5
      E.g., Sable Communications of Cal., Inc. v. FCC, 492 U.S. 115, 126 (1989).
   12 E.g., Roth v. United States, 354 U.S. 476, 485 (1957).
   '3 Denver, 116 S. Ct. at 2382.
   14 See, e.g., Sable, 492 U.S. at 126; FCC v. Pacifica Found., 438 U.S. 726, 744-
 50 (1978).
   "5 In order to determine whether a restriction on speech is content-neutral or
 content-based, the primary focus of the reviewing court is on whether the govern-
 ment has adopted the particular regulation on speech in opposition to the message
 which that particular speech conveys, which would brand it a content-based restric-
 tion. Clark v. Community for Creative Non-Violence, 468 U.S. 288, 293 (1984).
 The government's purpose in imposing the regulation is dispositive, so that a gov-
 ernmental regulation on speech that is implemented to serve purposes not related to
 the content of the speech is content-neutral, even if the incidental effects of the
 regulation restrict some speech. Ward v. Rock Against Racism, 491 U.S. 781, 791
 (1989). The Court has indicated that "at least with respect to businesses that purvey
     United States v. O'Brien16 established the intermediate scrutiny
 test which the Supreme Court subsequently applied to content-neutral
 restrictions on speech."7 The O'Brien test permits content-neutral
 speech regulation if "it furthers an important or substantial govern-
 mental interest; if the governmental interest is unrelated to the sup-
 pression of free expression; and if the incidental restriction on alleged
 First Amendment freedom is no greater than is essential to the further-
 ance of that interest." 8 However, if restrictions on protected speech
 are content-based, strict scrutiny applies and a court will uphold the
 regulations "only if they are narrowly tailored to achieve a compelling
 state interest." '9
 sexually explicit materials, zoning ordinances designed to combat the undesirable
 secondary effects of such businesses are to be reviewed" as content-neutral even if it
 would otherwise be construed as content-based. City of Renton v. Playtime Theaters,
 475 U.S. 41, 48 (1986). However a subsequent plurality opinion indicated that an
 ordinance   that aims   at protecting  viewers from    "psychological dam-
 age ... associated with viewing adult movies" deals with a "direct" rather than
 "secondary impact" and is insufficient to allow a court to review it as content-
 neutral. Boos v. Barry, 485 U.S. 312, 320-21 (1988). Additionally, some assert that
 Renton does not apply outside the context of businesses that provide sexually ex-
 plicit material. See, e.g., id. at 334-38 (Brennan, J., concurring in part, dissenting in
 part). But see, e.g., American Library Ass'n v. Reno, 33 F.3d 78, 85 (D.C. Cir.
 1994), reh'g en banc denied, 47 F.3d 1215 (D.C. Cir.), and cert. denied, 115 S. Ct.
 2610 (1995). Thus, section 10(a) could not be considered a content-neutral regula-
 tion that deals with a secondary effect of sexually explicit speech because it is aimed
 at protecting children from psychological damage resulting from the viewing of
 adult programming.
    16 391 U.S. 367 (1968).
    '7 Turner Broad. Sys., Inc. v. FCC, 512 U.S. 622, 661-62 (1994).
       O'Brien, 391 U.S. at 377. A regulation is not required to be the least restric-
  tive or least intrusive means of furthering the governmental interest. However, the
  regulation must be narrowly tailored to achieve the government's interest. Ward,
  491 U.S. at 798.     A   regulation achieves narrow  tailoring "so long as
  the.., regulation promotes a substantial government interest that would be achieved
  less effectively absent the regulation" Id at 799 (quoting United States v. Albertini,
  472 U.S. 675, 689 (1985)).
    '9 E.g., International Soc'y for Krishna Consciousness, Inc. v. Lee, 505 U.S. 672,
  678 (1992); Boos, 485 U.S. at 321. Pacifica established a narrow exception to the
  applicability of strict scrutiny whereby broadcast media receive less constitutional
  protection then other media because it has a "uniquely pervasive presence" in
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 108         UCLA ENTERTAINMENT LAW REVIEW                  [Vol 5:103
 C.    Special Concerns of Speech Regulation on Television
     In addition to the problems and concerns present whenever pro-
 tected speech is regulated, television's unique dynamics and charac-
 teristics raise several special First Amendment concerns that are not
 present in other areas.
     1.    Protecting Children From Adult Programming
     Today, millions of American children spend more time in front of
 a television set then they do with their parents.2" Regardless of their
 social class, most children between the ages of six and twelve watch
 between twenty and twenty-eight hours of television per week.2" The
 programs that children watch on television may arguably have a sub-
 stantial effect on their developing minds.22 The omnipotent presence of
 television in the lives of American children sets television apart from
 other communications media, such as radio and computers regarding
 this important issue. There will always be an inherent tension between
 protecting children from adult material and allowing adults to gain ac-
 cess to material which they are constitutionally entitled to watch, and
 it is not clear when the need to protect children would justify placing
 restrictions on adult material. It is this problem that underlies the Den-
 ver plurality's analysis of section 10(a).
 American society and is "uniquely accessibility to children" of broadcast media.
 Pacifica, 438 U.S. at 748-49. Courts have read Pacifica, along with Sable, to stand
 for the proposition that when evaluating a government regulation under strict scru-
 tiny, the regulation may be entitled to more deference if the effected medium is
 "widely pervasive and uniquely accessible to children." Recent Case, 109 HAv. L.
 REv. 864, 867 (1996). Contra Denver, 116 S. Ct. at 2415 (Kennedy, J., concurring in
 part, dissenting in part).
   21 Id at 117-18.
   22 E.g., Gene Amole, Rush to Adulthood Bears Fearful Fruit, ROCKY MT. NEWS,
 Jan. 7, 1997, at 5A.
     2.    Broadcast Television vs. Cable Television: Similar Yet
     Although cable and broadcast television superficially appear to be
 similar, are they really two forms of the same medium? Some courts
 assert that cable and broadcast television are alike enough to be treated
 the same under the First Amendment3.2 However, others suggest that
 cable and broadcast television are two distinct media, mainly because
 the inherent technological differences merit separate and different
 treatment under the First Amendment.24 The latter viewpoint appeared
   23 See Jones v. Wilkinson, 800 F.2d 989, 1004-05 (10th Cir. 1986) (Baldork, J.,
 specially concurring), affd, 480 U.S. 926 (1987); U.A.C.C. Midwest, Inc. v. Indiana
 Dept. of Revenue, 667 N.E.2d 232, 239 (Ind. Tax Ct. 1996) (asserting that cable and
 broadcast television are the same business, but receive their respective income from
 different sources); Michael I. Meyerson, The Right to Speak, the Right to Hear, and
 the Right not to Hear: The Technological Resolution to the Cable/Pornography De-
 bate, 21 U. MICH. J.L. REF. 137, 159-61 (1987/1988); Laurence H. Winer, The Signal
 Cable Sends, Part H - Interference from the Indecency Cases?, 55 FoReHAM L. REv.
 459 passim (1987).
   24 See Turner, 512 U.S. at 627-29 (1994); Capital Cities Cable, Inc. v. Crisp, 467
 U.S. 691, 700-01 (1984); Action For Children's Television v. FCC, 58 F.3d 654, 660
 (D.C. Cir. 1995) (en banc), cert. denied, 116 S. Ct. 701 (1996); Quincy Cable TV,
 Inc. v. FCC, 768 F.2d 1434, 1438-39 (D.C. Cir. 1985), cert. denied, 476 U.S. 1169
 (1986); HBO, Inc. v. Corinth Motel, Inc., 647 F. Supp. 1186, 1188 (N.D. Miss.
 1986); Cruz v. Ferre, 571 F. Supp. 125, 131-32 (S.D. Fla. 1983), aff'd, 755 F.2d
 1415 (11 th Cir. 1985); Cable-Vision, Inc. v. Freeman, 324 So. 2d 149, 153 (Fla.
 Dist. Ct. App. 1975), appeal dismissed, 336 So. 2d 1180 (Fla. 1976), and appeal
 dismissed, 429 U.S. 1032 (1977); Clear Television Cable Corp. v. Board of Pub.
 Util. Comm'rs, 424 A.2d 1151, 1155 (N.J. 1981); Capitol Cablevision Corp. v.
 Hardesty, 285 S.E.2d 412, 419-20 (W. Va. 1981); Henry Geller & Donna Lampert,
 Cable, Content Regulation and the First Amendment, 32 CAm. U. L. REv. 603, 622-
 23 (1983); William E. Lee, Cable Leased Access and the Conflict Among First
 Amendment Rights and First Amendment Values, 35 EMORY L.J. 563, 576-91 (1986);
 Robert E. Riggs, Indecency on Cable: Can it be Regulated?, 26 ARIZ. L. REv. 269,
 287-88 (1984); Dominic Andreano, Note and Comment, Cyberspace: How Decent is
 the Decency Act?, 8 ST. THOMAS L. REv. 593, 604-06 (1996); Jeff Gray, Note, Turner
 Broadcasting v. FCC: The Need for a New Approach in First Amendment Jurispru-
 dence of the Cable Industry, 29 U.S.F. L. REv. 999, 1008-09 (1995); cf S. REp. No.
 92, 102d Cong., 1st Sess., 51 (1991), reprinted in 1992 U.S.C.C.A.N. 1133, 1184
 (noting inherent similarity between cable television and telephones).
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 110         UCLA ENTERTAINMENT LAW REVIEW                   [Vol 5:103
 to be firmly established by the Court in its Turner opinion.25 How-
 ever, the recent Denver decision raises serious questions as to the gen-
 eral applicability of this distinction.
     Cable television has two primary benefits over broadcast televi-
 sion: it provides undistorted reception of its signals and a significantly
 greater number of channels than its broadcast counterpart.26 Cable
 television's benefits over broadcast television result from the techno-
 logical differences between the two media.2 Signals from broadcast
 media occupy the electromagnetic spectrum and invade every home
 within their broadcast area. By contrast, cable service is provided only
 by subscription and generally requires that a subscribers home is
 linked to the cable provider by means of closed circuit, coaxial cable.28
     Because of the scarcity of frequencies available in the electromag-
 netic spectrum, some degree of regulatory intrusion with respect to
 broadcast media is necessary to ensure that the various frequencies are
 properly assigned.29 Thus, courts have consistently permitted greater
 speech restrictions on broadcast media than would otherwise be toler-
 ated under the First Amendment.30 This spectrum scarcity rationale
 provided the basis underlying the Supreme Court's decision in FCC v.
 Pacifica Foundation, which upheld the power of the FCC to place
 timing restrictions on the broadcast of indecent material over the ra-
 dio.3" It is the Pacifica decision, which the Denver plurality primarily
 relied upon in upholding section 10(a).
   25 The Court clearly stated that the different technologies through which cable
 and broadcast television reach their viewers sets them apart. Turner, 512 U.S. at
 627-29. In fact, the Court recognized this distinction as early as 1968. See Fort-
 nightly Corp. v. United Artists Television, Inc., 392 U.S. 390,400-01 (1968).
   26 Turner, 512 U.S. at 627-29.
   27 Although there are many distinctions between cable and broadcast television,
 the technological differences are most obvious.
   2" See Robert F. Copple, Cable Television and the Allocation of Regulatory
 Power: A Study of Government Demarcation and Roles, 44 FED. CoMM. L.J. 1, 12-13
   29 See, e.g., Turner, 512 U.S. at 637-38. The Court notes that there is no spec-
 trum scarcity with respect to coaxial cable.
   30 See, e.g., id.
   31 438 U.S. 726 (1978).
     In addition to spectrum scarcity, cable and broadcast television
 also differ with respect to funding and operations.32 While the simi-
 larities may not be obvious, cable television's closest analogue for
 First Amendment purposes may actually be telephones rather than
 broadcast television due to the practical aspects of using public prop-
 erty for laying out the wires, virtual monopolies over the communities
 served, and the need to provide non-discriminatory service.33 Addi-
 tionally, as they switch over to the use of fiber optic technology, tele-
 phones and cable television will grow even more analogous as tele-
 phone companies will be able to carry television pictures and
 telephone audio signals within the same wire34 and at a lower cost than
 is charged for cable service via standard coaxial cable.3"
     3.    Common Carrier Regulation
     The common carrier doctrine originated in the context of trans-
 portation and shipping and bestowed a quasi-public character on one
 who undertook to "carry for all people indifferently."36     However,
 since its origin, courts have applied the common carrier doctrine in
 various other contexts including communications. A communications
 common carrier "is one that 'makes a public offering to provide
 [communications facilities] whereby all members of the public who
 choose to employ such facilities may communicate or transmit intelli-
 gence of their own design and choosing. .         The basic duty of a
   32 See, e.g., Turner, 512 U.S. at 629.
   3 S. REP. No. 92, supra note 24, at 51, reprinted in 1992 U.S.C.C.A.N. at 1184.
   § 1.03[2], at 1-6 to 1-10 (1997). Utilization of the same wire is not practical without
 fiber optic technology because telephone wires without the use of expensive com-
 pression techniques do not have adequate bandwidth to carry television pictures and
 telephonic audio simultaneously. Id. Fiber optic cable television systems are already
 being tested and used in parts of the United States and Europe. Id at 1-8.
   36 National Ass'n of Regulatory Util. Comm'rs v. FCC, 525 F.2d 630, 640-42
 (D.C. Cir. 1976), cert. denied sub noma. National Ass'n of Radiotelephone Sys. v.
 FCC, 425 U.S. 992 (1976).
   " FCC v. Midwest Video Corp., 440 U.S. 689, 701 (1979) (quoting In re
 Amendment of Rules Insofar as they Relate to the Industr. Radiolocation Serv., 5
 F.C.C.2d 197, 202 (1966) (Report and Order)) (internal footnotes omitted).
 Fall 1997]
 112         UCLA ENTERTAINMENT LAW REVIEW                  [Vol 5:103
 communications common carrier is to transmit information for all
 people indifferently without discriminating or refusing to deal with
 customers it is suited to serve.38 The basic underlying rationale of the
 common carrier doctrine is to guarantee "fair and equal access to the
 carrier's service." 39 A finding that a communications medium or pro-
 vider is a common carrier requires that strict scrutiny be used to ana-
 lyze any laws restricting common carriers from delivering protected
 A.    The Plurality's Analysis of Section 10(a)
     In addressing the constitutionality of section 10(a), the Denver plu-
 rality construes the exercise of the regulatory powers entrusted to ca-
 ble operators by section 10(a) to be state action for First Amendment
 purposes."a Next, as a result of their restatement of the essence of First
 Amendment protection, the plurality asserted that case law has estab-
 lished the power of the government to "directly regulate speech to ad-
 dress extraordinary problems, where its regulations are appropriately
 tailored to resolve those problems without imposing an unnecessarily
 great restriction on speech."42 It is through this formula that section
 10(a) is "closely scrutiniz[ed]" by the plurality.43 The plurality opin-
 ion upheld section 10(a) under this standard because of the importance
 of the interest at stake,44 the accommodation of cable operators in ed-
 iting the contents of their channels and the cable programmers' inter-
   38 David Kupetz, Note, Cable's "Non-Cable Communications Services": Cable
 Television as a Common Carrier, 8 CoMM/ENr L.J. 75, 89 (1985) (internal quotations
   '9 Midwest Video Corp. v. FCC, 571 F.2d 1025, 1036 (8th Cir. 1978), affd, 440
 U.S. 689 (1979).
   40 Denver, 116 S. Ct. at 2412 (Kennedy, J., concurring in part, dissenting in part)
 (citing Sable Communications of Cal, Inc. v. FCC, 492 U.S. 115, 131 (1989)).
   41 Denver, 116 S. Ct. at 2383.
   42 Id. at 2384-85.
   43 Id.
   44 Id at 2385-86. The interest at stake is the protection of children from expo-
 sure to patently offensive depictions of sex. Id
 ests in maintaining access channels,45 the similarity between the issues
 present in both Pacifica and Denver,46 and the fact that section 10(a)
 offers a flexible approach that permits cable operators to exercise edi-
 torial discretion.4" These four grounds led the plurality to reach the
 conclusion that section 1 0(a) "is a sufficiently tailored response to an
 extraordinarily important problem.""4
 B.    Critique of the Denver Plurality Opinion
     The problem with the plurality's approach is that three of the four
 grounds relied upon in upholding section 10(a) are flawed. In particu-
 lar, the plurality weighs the cable operators' interests in exercising
 discretion over leased access channels too heavily as against the inter-
 ests of the cable programmers. In addition, the plurality incorrectly
 analogized the instant case to Pacifica, disregarding precedent that
 would require full First Amendment protection based upon the ab-
 sence of spectrum scarcity on cable television. Furthermore, the Den-
 ver plurality incorrectly viewed section 1 0(a)'s approach to regulation
 as being not overly-restrictive.
     1.    Protection of Children
     The first factor cited by the plurality is the need to protect children
 from sexually explicit material. Many would agree that the protection
 of children from sexually explicit material which section 10(a) seeks
 to address is an important one.49 The other three factors used to up-
   " Id Cable programmers are those who produce programming which is sold or
 licensed to cable operators. Turner, 512 U.S. at 628.
   , Denver, 116 S. Ct. at 2385-87.
   47 Id.
   48 Id. at 2385-86.
   49 Id. at 2386; id at 2416 (Kennedy, J., concurring in part, dissenting in part); cf
 Shea v. Reno, 930 F. Supp. 916 passim (S.D.N.Y. 1996), affd, 117 S. Ct. 2501
 (1997) (discussing the problem of preventing children from gaining access to sexu-
 ally explicit material on the internet). But see Fabulous Assocs. v. Pennsylvania Pub.
 Util. Comm'n, 693 F. Supp. 332, 339 n.14 (E.D. Pa. 1988), aff'd, 896 F.2d 780 (3d
 Cir. 1990); Brett Ferenchak, Comment, Regulating Indecent Broadcasting: Setting
 Sail from Safe Harbors or Sunk by the V-Chip?, 30 U. RIcH. L. REv. 831,832 (1996).
 Fall 1997]
 114          UCLA ENTERTAINMENT LAW REVIEW                   [Vol 5:103
 hold section 1 0(a), however, are more questionable and merit closer
     2.   The Accommodation of Cable Operators' Editorial Discretion
     The plurality asserted that the accommodation of the cable opera-
 tors' interest in exercising editorial discretion over leased access chan-
 nels was of greater import than the cable programmers' interests in the
 use of leased access channels in order to justify upholding section
 10(a).5" The Court assumed, however, that First Amendment law en-
 titles cable operators to exercise editorial discretion over leased access
 channels. Some view this question as being at "the real heart of the
 cable controversy."'" The plurality's focus on the First Amendment
 rights of the cable operators is based upon the view that a cable op-
 erator's ability to exercise editorial discretion over the programming
 carried over leased access channels constitutes free speech entitled to
 full First Amendment protection.52 Thus, the plurality likely saw sec-
 tion 10(a) as promoting the freedom of speech of cable operators.53
 According to the plurality, where a cable programmer's asserted right
 to transmit over leased access channels is in conflict with the cable
 operator's right to edit that programming, the cable operator's editorial
 discretion wins out.54   However, the rights of cable operators over
   '0 Denver, 116 S. Ct. at2385-86.
   51 PARSONS, supra note 10, at 7; see generally Eugene Volokh, Cheap Speech
 and What it Will Do, 104 YALE L.J. 1805, 1834-38 (1995).
   52 Turner, 512 U.S. at 636; FCC v. Midwest Video Corp., 440 U.S. 689, 707
 (1979); Alliance for Community Media v. FCC, 56 F.3d 105, 150 (D.C. Cir. 1995)
 (en banc), aff'd in part, rev'd in part sub nom. Denver, 116 S. Ct. 2374 (1996); cf
 Leathers v. Medlock, 499 U.S. 439, 444 (1991) (cable operators considered "part of
 the 'press"' by providing news, information, and entertainment).
   " See Alliance for Community Media, 56 F.3d at 150. Adherents to this view as-
 sert that section 10(a) merely returns a cable operators editorial discretion which was
 taken away by the 1984 Act which established leased access channels. Denver, 116
 S. Ct. at 2411 (Kennedy, J., concurring in part, dissenting in part).
   14 Denver, 116 S. Ct. at 2421 (Thomas, J., concurring in part, dissenting in part);
 Turner, 512 U.S. at 681 (Stevens, J., concurring in part). Justice Thomas bases his
 view regarding cable operators' editorial discretion on Turner as "implicitly recog-
 niz[ing] ... that the programmer's right to compete for channel space is derivative
 of, and subordinate to, the operator's editorial discretion." A cable programmer
 therefore has a protected right in seeking an outlet for his programming, but no
 leased access channels were extinguished by the 1984 Act which cre-
 ated leased access channel requirements." The restoration of a cable
 operator's editorial discretion over leased access channels, as Justice
 Kennedy states, is not a compelling interest for First Amendment pur-
     Additionally, as Turner indicated, cable operators possess unique
 powers because of their "control over most (if not all) of the television
 programming that is channeled into the subscriber's home" due to the
 technological structure of cable television.57 Section 10(a) adds more
 editorial power to the significant power that the cable operator already
 holds. The cable operator's control over the information that enters a
 subscriber's home, already significant, is increased by the implemen-
 tation of section 10(a).  Because *over sixty percent of American
 households with televisions subscribe to cable television5" and over
 ninety-five percent of American households have the capability to re-
 ceive cable service,59 this power over a communications medium held
 by cable operators raises serious questions as to whether it is wise for
 a group of private individuals with economic motives to hold such
 tremendous power and the possibility for control over a primary
 source of education, entertainment, and information for millions of
 "free-standing First Amendment right to have that programming transmitted."
 Viewers rights are, according to Justice Thomas, derivative of both the rights of ca-
 ble operators and cable programmers. Denver, 116 S. Ct. at 2421 (Thomas, J., con-
 curring in part, dissenting in part).
    55 Denver, 116 S. Ct. at 2411 (Kennedy, J., concurring in part, dissenting in
    56 Id at 2416 (Kennedy, J., concurring in part, dissenting in part). This conclu-
  sion is based upon the view that "the transmission of indecent programming over
  leased access channels is not [the] forced speech of the operator... [and] the discre-
  tion conferred by [section 10(a)] is slight" because the operator cannot broadcast
  substitute programming in place of the prohibited indecent material nor remove
  other types of offensive, non-indecent speech. Id.
    s' Turner, 512 U.S. at 656.
    58 E.g., Cable Television Consumer Protection and Competition Act of 1992,
  Pub. L. No. 102-385, § 2(a)(3), 106 Stat. 1460, 1460 (1992).
    59 JOHNSON, supra note 35, at 28.
    o Cf Cable Television Consumer Protection and Competition Act of 1992 §
 Fall 1997]
 116          UCLA ENTERTAINMENT LAW REVIEW                  [Vol 5:103
     One way in which cable television is different from other media is
 that the practical requirements of acquiring easements in order to lay
 out the cable under both public and private property mean that most
 communities are only served by one cable system which is granted a
 virtual monopoly. Other media are not faced with such impediments
 and consequently, it is possible for a community to be served by sev-
 eral newspapers of varying size and circulation in addition to national
 newspapers and magazines, but only one cable system. Rather than a
 delicate balance between the editorial discretion of cable operators and
 the free speech interests of cable programmers, after Denver, the cable
 programmer's interests are clearly relegated to a subordinate position
 behind those of the cable operator. This is especially troubling consid-
 ering the fact that the original laws requiring space for leased access
 channels to be set aside was adopted in order to provide programmers
 unaffiliated with the cable operator with the ability to operate cable
 channels free from the cable operator's editorial control.6'
     3.    The Pacifica Factors
     Considering the lengths to which the plurality went in distin-
 guishing the instant case from previous First Amendment case law,62 it
 is difficult to justify application of the one case on which the plurality
 relied heavily because it "provide[d] the closest analogy" to the issues
 present in Denver.63 The plurality chose to apply Pacifica, which up-
 held governmental restrictions on indecent material broadcast over the
 radio. The plurality in Denver found all of the factors justifying the
 ban in Pacifica to be present in analyzing section 10(a): both cable
 2(a)(4) (noting the high concentration of ownership in the cable television industry
 and the potential problem).
   61 See Denver, 116 S. Ct. at 2411-12 (Kennedy, J., concurring in part, dissenting
 in part).
   62 Id at 2415 (Kennedy, J., concurring in part, dissenting in part).
   63 Id. at 2388. But see id. at 2415 (Kennedy, J., concurring in part, dissenting in
 part) (noting that Pacifica involved a ban occurring during daytime hours). Cf Ac-
 tion for Children's Television v. FCC, 58 F.3d 654, 667 (D.C. Cir. 1995) (en banc),
 affd in part, rev'd in part sub nom. Denver, 116 S. Ct. 2374 (1996) (noting that
 daytime ban involves level of intrusion implicating First Amendment scrutiny be-
 cause it would burden many adults' rights).
 television and radio are "uniquely accessible to children," have estab-
 lished a "uniquely pervasive presence" in the lives of Americans, pat-
 ently offensive material can confront citizens in the privacy of their
 homes without adequate warning, and adults desiring this program-
 ming can resort to other means such as video tapes or theaters.4 The
 plurality's decision to apply the Pacifica standards is questionable,
 however, because the Pacifica decision emphasized that its holding
 was to be construed narrowly.65
     Application of the Pacifica factors to section 1 0(a) throws into un-
 certainty the relation of cable and broadcast television for First
 Amendment purposes. The Denver plurality insisted that when the is-
 sue involves children and television, cable television differs little from
 broadcast television. But in Turner, the Court found that the spectrum
 scarcity of broadcast frequencies justified greater speech restrictions
 on broadcast television as compared to other communications media.66
     In Pacifica, however, the "uniquely pervasive presence in the lives
 of all Americans" and "unique accessibility to children" of broadcast
 media justified the greater speech restrictions on broadcast radio.67
 These factors are not directly applicable to cable television.68
           i. Uniquely Pervasive Presence
     The first factor, a "uniquely pervasive presence," is not directly
 applicable to cable television because cable television's presence in
 the home is completely different from that of broadcast media. When
 homeowners request and pay for material to enter their home, as they
 do with cable television, application of Pacifica becomes unnecessary
 because the programming which enters the home via cable television
 is not an unwanted intruder as was the indecent radio broadcast in
   64 Denver, 116 S. Ct. at 2386-87.
   65 Pacifica, 438 U.S. at 748-50. See also Sable Communications of Cal., Inc. v.
 FCC, 492 U.S. 115, 127-28 (1989); Bolger v. Youngs Drug Prod. Corp., 463 U.S.
 60, 74 (1983); Cruz v. Ferre, 755 F.2d 1415, 1421-22 (11th Cir. 1985). The Court's
 decision is especially troubling because the cases that the Court chose not to apply,
 e.g. Turner, did not contain such restrictive language.
   6 See Denver, 116 S. Ct. at2388.
   67 Pacifica, 438 U.S. at 748-50.
   68 See MINow & LAMAY, supra note 20, at 128; Geller & Lampert, supra note
 24, at 615-16.
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 118         UCLA ENTERTAINMENT LAW REVIEW                 [Vol 5:103
 Pacifica.69 Cable can also be distinguished from broadcast television
 because, while subscription to cable television is very large and still
 growing, it still pales in comparison to broadcast television which
 ninety-eight percent of American households are capable of receiv-
     Furthermore, Pacifica's assertion of broadcast radio's "uniquely
 pervasive presence" was based upon the Supreme Court's earlier
 holding in CBS v. DNC.7' In CBS, the Supreme Court quoted an opin-
 ion of Judge Bazelon of the United States Court of Appeals for the
 D.C. Circuit which differentiated broadcast television from print me-
 dia because the signals for broadcast television are "in the air"
 whereas written communication are on paper.72 To receive messages
 from print media, Judge Bazelon indicated, the affirmative act of the
 individual to read the message is required, whereas an affirmative act
 is not required to receive messages that are broadcast over television.73
 The CBS Court's adoption of Judge Bazelon's rationale to distinguish
 broadcast television from print media was based upon the intrusive-
 ness of broadcast television.74 Although there are various ways of
 reading the Judge Bazelon's intrusiveness doctrine, the Court's subse-
 quent application of the doctrine in Pacifica confirms that it is based
 upon the fact that broadcast signals are "in the air," and thus omni-
 present.75 This rationale could be consistently applied in Pacifica be-
 cause of the technological similarities between broadcast radio and
 broadcast television. However, the Denver plurality's application of
 Pacifica and the intrusiveness doctrine to cable television is flawed,
 because cable television signals are not "in the air," but are transmit-
   69 See Debra D. Burke, Cybersmut and the First Amendment: A Call for a New
 Obscenity Standard, 9 HAav. J.L. & TECH. 87, 125 (1996); cf Mmnow & LAMAY, su-
 pra note 20, at 127 (Broadcasters note that as people pay to receive television sig-
 nals, Pacifica's rationale becomes inapplicable.).
   70 Geller & Lampert, supra note 24, at 623.
   7' 412 U.S. 94 (1973); see Fred H. Cate, The First Amendment and the National
 Information Infrastructure, 30 WAKE FoREST L. REv. 1, 33-35 (1995).
   72 CBS, 412 U.S. at 128 (quoting Banzhaf v. FCC, 405 F.2d 1082, 1100-01)
 (D.C. Cir. 1968).
   73 Id.
   74 Cate, supra note 71, at 33-35.
   7I ld. at 35.
 ted through wires. Additionally, cable television requires the affirma-
 tive act of ordering and paying for reception of cable television serv-
 ices. Thus, cable television, for First Amendment purposes would be
 more akin to print media than broadcast television. Denver's applica-
 tion of Pacifica thus raises the possibility that the intrusiveness doc-
 trine is not based upon the unique nature of broadcast technology-a
 dramatic and sweeping departure from Supreme Court precedent in
 this area.
           ii. Unique Accessibility to Children
     The second Pacifica factor, "unique accessibility to children," is
 also absent in cable television because of the significantly higher costs
 and complexities involved with subscribing to cable television and the
 availability of special blocking devices for households receiving cable
 television. Any child with a few dollars can go to a store and purchase
 a radio. Yet, it would require significantly more money to purchase a
 television and order cable service and it would be much more likely to
 attract the attention of parents. It would also be much easier for a child
 to conceal a radio from parents. Even if the child already has access to
 a television, it would still be difficult to order cable service into the
 home without involvement from the parents. Congress has similarly
 recognized the technological differences between broadcast and cable
 technology in the Communications Act of 193476 which differentiated
 between "wire communication," on which cable television is based,
 and "radio communication," which is based upon broadcast technol-
 ogy, and provided the FCC with different regulatory authority for each
     However, even if cable television was found to be "uniquely ac-
 cessible to children" and possess "a uniquely pervasive presence," re-
 strictions such as section 10(a) would still not be permissible because
 the Pacifica decision was based upon the spectrum scarcity of the
 broadcast medium."8 This alone would render an approach based upon
   76 Ch. 652, 48 Stat. 1064, 1065 (1934) (codified as amended in scattered sections
 of 47 U.S.C.).
   7' Riggs, supra note 24, at 287-88 (discussing 47 U.S.C. § 153 (1982)).
   " See, e.g., ACLU v. Reno, 929 F. Supp. 824, 876 (E.D. Pa. 1996) (Dalzell, J.,
 supporting opinion), prob. juris. noted, 117 S. Ct. 554 (1996), and aff'd, 117 S. Ct.
 Fall 1997]
 120          UCLA ENTERTAINMENT LAW REVIEW                   [Vol 5:103
 Pacifica inapplicable to section 10(a) because of the absence of spec-
 trum scarcity in cable television. The plurality's application of the
 Pacifica factors thus suggests that the Court does not believe the
 "unique accessibility" and "uniquely pervasive presence" to emanate
 from the spectrum scarcity rationale or the intrusiveness doctrine. If
 the doctrine is not so rooted, then there is the potential to apply the
 Pacifica approach not only to cable television, but any other commu-
 nications medium which is shown to be "uniquely accessible to chil-
 dren" and have a "uniquely pervasive presence." This presents the
 possibility for firmly established First Amendment principles to be
 circumvented once such qualities are deemed to be present in any par-
 ticular medium. However, this approach would be inconsistent with
 the Pacifica Court's emphasis on the narrowness of their holding.79
 The Pacifica Court's emphasis that the holding was to be construed
 narrowly points to the fact that it was based on the specific character-
 istic of the medium at issue: spectrum scarcity." Thus, because there
 is no spectrum scarcity present in cable television, the Pacifica factors
 should not apply even if the Denver plurality found that cable televi-
 sion was "uniquely accessible to children" and had "a uniquely per-
 vasive presence" because, without spectrum scarcity, there is no justi-
 fication for lessened First Amendment protection, no matter how
 compelling the reason.
            4.   Section 1O(a)'s Flexible Approach
     The fourth rationale used by the plurality to uphold section 10(a) is
 the flexibility provided by the provision's permissive approach. The
 plurality asserted that section 10(a) allows cable operators to exercise
 2329 (1997). The spectrum scarcity rationale is inseparable from the intrusiveness
 doctrine, because it is the fact that cable television signals do not occupy space on
 the electromagnetic spectrum, but are transmitted over wires that prevents the spec-
 trum scarcity rationale from applying. While there is limited space on the electro-
 magnetic spectrum, the ability to carry an increasing number of signals by wire is
 large and quickly increasing due to developing technologies.
   79 Pacifica, 438 U.S. at 750.
   go Cf Meyerson, supra note 23, at 150 n.73 (noting that the FCC argued that
 spectrum scarcity justified the restrictions on indecent speech in both the FCC order
 and the FCC's brief before the Supreme Court in Pacifica).
 editorial control over the leased access channels in a manner that is
 less likely to restrict speech than the ban present in Pacifica.8" How-
 ever, this is likely more true on paper rather than in practice. The
 regulatory approach in Pacifica merely made adult programming less
 accessible to children, it did not ban it, as the plurality asserts.82
 Pacifica prohibited the broadcast of indecent material which depicted
 "sexual and excretory activities in a patently offensive manner" over
 the radio during the day when children may be in the audience.83 The
 Pacifica Court indicated however, that this material may be not be
 considered indecent if it is broadcast in the "late evening," has "liter-
 ary, artistic, political, or scientific value," and is "preceded by warn-
 ings." " Yet, section 10(a) does not make any provision for showing
 sexually explicit material at night, and in fact allows a cable operator
 to completely prohibit the showing of sexually explicit material on
 leased access channels.
     Section 10(a)'s approach will also be more restrictive then the
 regulatory approach upheld in Pacifica because section 10(d)"5 strips
 the cable operators' previously held immunity for obscene material on
 leased access channels. Accordingly, cable operators will have a
 greater incentive to censor more broadly then the minimum that is re-
 quired to control indecent material in order to avoid financial penalties
 resulting from material broadcast on its leased access channels. Cable
 operators may also have an incentive to use their editorial discretion
 broadly because section 10(a) may deter people from leasing cable
 channels from cable operators rather then be subject to the cable op-
 erator's editorial discretion. This would directly benefit operators who
 can then put their own programming on the unused leased access
 channels.86 Such a result would also interfere with one of the ration-
 ales behind the creation of leased access channels which was to allow
   81 Denver, 116 S. Ct. at 2385-87.
   82 MINOW & LAMAY, supra note 20, at 126.
   83 Pacifica, 438 U.S. at 731-32.
   4 Id. at 732 n.5 (citing In re Citizen's Complaint Against Pacifica Found., 56
 F.C.C.2d 94, 98 (1975)).
   85 47 U.S.C. § 558 (1996).
   86 Symposium, Panel II. Censorship of Cable Television's Leased and Public
 Access Channels: Current Status of Alliance for Community Media v. FCC, 6
 FoRDHAM INTELL. PROP. MEDIA & ENT. L.J. 465, 504-05. (1996).
 Fall 1997]
 122        UCLA ENTERTAINMENT LAW REVIEW                [Vol 5:103
 for "the widest possible diversity of information sources" for cable
    The vague terms which section 10(a) employs to allow cable op-
 erators to restrict speech which they "reasonably believe" to be pat-
 ently offensive by "contemporary community standards" will permit
 operators to censor more broadly than necessary, subject only to the
 reasonableness of their belief.
     Subsequent to Denver, in Reno v. ACLU,88 the Supreme Court
 struck down a provision of the Communications Decency Act of
 1996"9 which prohibited the sending or displaying of "patently offen-
 sive [material over the internet] as measured by contemporary com-
 munity standards."90 The Court, in ACLU, justified their decision to
 invalidate that provision, in part, on the fact that "the 'community
 standards' criterion as applied to the Internet means that any commu-
 nication available to a nation-wide audience will be judged by the
 standards of the community most likely to be offended by the mes-
 sage."9' This same rationale should have been applied in Denver be-
 cause many cable programmers produce their programming for a na-
 tionwide audience which a cable operator would be permitted to
 censor under section 10(a), based upon "contemporary community
 standards." Section 10(a) would thus facilitate a situation, which the
 Court thereafter found objectionable in ACLU, in which a community
 with the most restrictive standards would, in effect, be able to restrict
 what is provided by the cable operator in other communities.
     The Court, in ACLU, also struck down provisions of the Commu-
 nications Decency Act because the provisions were too burdensome,92
 and because less restrictive means of protecting children from the pat-
   "' 47 U.S.C. § 532(a) (1996). But see Denver, 116 S. Ct. at 2390; Time Warner
 Ent. Co., v. FCC, 93 F.3d, 957, 981 (D.C. Cir. 1996); Brief for Respondent Nat'l
 Cable Television Ass'n, Inc. 1996 WL 32782, at * 11-12, Denver.
   88 117 S. Ct. 2329 (1997).
   89 Pub. L. 104-104, 110 Stat. 56, 133 (1996).
   90 47 U.S.C.A. § 223(d) (Supp. 1997) (emphasis added).
   9' ACLU, 117 S. Ct. at 2347.
   92 1.4
 ently offensive material were too costly93 and would "soon be widely
 available" to consumers.94 Similarly, in Denver, not only did section
 10(a) present the possibility for heavily burdening and repressing
 speech, but less restrictive means of protecting children from adult
 material on leased access channels, not only are widely available, but
 are also relatively inexpensive.95 The failure of the Court to reason as
 it did in ACLU is puzzling.
     In part III of the Denver opinion, a six justice plurality held section
 10(b) to be unconstitutional because its non-permissive requirement
 for cable operators to restrict "patently offensive" sexually explicit
 material on leased access channels is not "narrowly tailored" to meet
 the objective of protecting children, and is "considerably 'more exten-
 sive than necessary."'96  The plurality in evaluating section 10(a)
 however, fails to address the real possibility that section 10(a)'s per-
 missive approach will likely differ from a complete non-permissive
 ban more in theory than in practice. Because it will likely restrict
 speech just as much as a complete ban, it follows that section 10(a)
 should be invalidated on the same grounds that invalidated section
 10(b) as "overly restrictive."97
     The plurality's use of an ad hoc standard to analyze section 10(a)
 under the First Amendment allowed the Court to discard approaches
 more applicable to the issue of determining section 10(a)'s constitu-
 tionality. Section IV will investigate these rejected approaches and the
 rationale underlying the plurality's refusal to employ them in their
 analysis of section 1 0(a).
     Two approaches to analysis of section 10(a)'s restrictions on
  speech which the plurality deemed inapplicable were strict scrutiny,
  based upon section 10(a)'s content-based approach toward regulation
  of speech, and an analysis of section 10(a) under the Court's common
  93  Id.
  94  Id.
  9' See infra p. 26.
  96 Denver, 116 S. Ct. at 2390-94.
  97 Id. at 2394.
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 124         UCLA ENTERTAINMENT LAW REVIEW                 [Vol 5:103
 carrier doctrine. Upon close examination, it is evident that the Court's
 refusal to employ these approaches was based on flawed assumptions.
 Clearly, analysis of section 10(a) under strict scrutiny or common car-
 rier jurisprudence would have been more consistent with precedent
 and more attentive to the technology of leased access channels and ca-
 ble television.
 A.    Strict Scrutiny
     By permitting cable operators to exercise censorial power over
 leased access channels in order to prohibit indecent programming,
 section 10(a) singles out one type of speech for special treatment
 based upon its content: indecent programming on leased access chan-
 nels. Thus, section 10(a) is a content-based restriction of protected
 speech that requires the application of strict scrutiny.
     Strict scrutiny would likely have invalidated the provision on con-
 stitutional grounds for several reasons.98 The Court, only two years
 earlier, stated that "[r]egulations that discriminate among me-
 dia ... often present serious First Amendment concerns."99 Section
 10(a) not only discriminates among media, but goes one step further
 by distinguishing among different types of channels on a single me-
 dium and providing for separate treatment. Additionally, the Court
 previously held that a complete ban on "indecent" speech cannot sur-
 vive strict scrutiny."°
     Section 10(a) would fail strict scrutiny analysis because, although
 the need to protect children from exposure to indecent sexually ex-
 plicit programming is a compelling state interest,'10 the provision is
 not narrowly tailored to achieve that interest because it does not re-
 quire the cable operator to prohibit indecent programming. The provi-
 sion places enforcement power completely in the discretion of the ca-
   9 Cf Petitioner's Reply Brief, No. 95-124, 95-227 1996 WL 63304, at *8, Den-
 ver (noting the government's failure to argue that section 10(a) can survive strict
 scrutiny analysis).
   '9 Turner, 512 U.S. at 659.
   o E.g., Sable Communications of Cal., Inc. v. FCC, 492 U.S. 115, 126-27
   ... Denver, 116 S. Ct. at 2386.
 ble operator.'°2 Furthermore, should the cable operator choose to pro-
 hibit sexually explicit indecent programming, adults, as well as chil-
 dren, would be deprived access to it.'03
     The plurality failed to consider less-burdensome alternatives such
 as addressable converters, blocking chips, and lockboxes in its analy-
 sis of section 10(a). An addressable converter would make it possible
 to block out certain channels from       entering a home altogether.104
 Blocking chips or "v-chips" are electronic devices built into televi-
 sions that are able to block out material tagged as sexually explicit.'05
 Lockboxes allow parents to lock out certain channels by means of a
 key or by code.'06 These devices provide a practical method of pro-
 tecting children from exposure to sexually explicit material while still
 allowing willing adults to gain access to it."7 The plurality's failure to
 consider these possible alternatives to section 10(a)'s approach is in-
 consistent with the Court's traditional conception of the narrow tai-
 loring requirements of strict scrutiny.108
     Because Denver involved a content-based regulation that would
 seemingly fail strict scrutiny analysis, the plurality's decision not to
 analyze section 10(a) as a content-based speech regulation merits fur-
    '02 Id. at 2416 (Kennedy, J., concurring in part, dissenting in part). Section 10(a)
 nevertheless involves state action because the cable operator's enforcement power is
 traceable to a Congressional Act. Id. at 2382-84.
    113 Id. at 2416-17 (Kennedy, J., concurring in part, dissenting in part).
    `4 BRENNERETAL., supra note 34, § 6.09[3][c], at 6-98.
    105 See generally JAMEs C. GOODALE, ALL ABOUT CABLE, § 6.05A, at 6-70.10 to -
 70.13 (1996). In order to use these devices, it is necessary for programs to carry
 coded information which indicates the program's rating with respect to certain fac-
 tors such as sexually explicit material. The blocking chip then blocks out prohibited
 material. Id at 6-70.10.
    106 BRENNERETAL., supra note 34, § 6.09[3][c], at 6-98.
    107 See generally id, § 6.09[3][c], at 6-98 to -100. But see Denver, 116 S. Ct. at
 2393, where the plurality, in analyzing section 10(b), accepted the government's ar-
 guments that lockboxes were not as effective as section 10(b)'s "segregate and
 block" provisions in protecting children from sexually explicit material on cable
 television because parents must first know that lockboxes are available, spend time
 and money to purchase them, learn how to use them, and finally, put them to effec-
 tive use.
   1o0 See Denver, 116 S. Ct. at 2416 (Kennedy, J., concurring in part, dissenting in
 Fall 19971
 126          UCLA ENTERTAINMENT LAW REVIEW                   [Vol 5:103
 ther investigation. The plurality indicated that the essence of First
 Amendment protection is "that Congress may not regulate speech ex-
 cept in cases of extraordinary need and with the exercise of a degree of
 care that [the Supreme Court has] not elsewhere required," while still
 leaving Congress with adequate power to deal with important prob-
 lems. '9 By distilling the First Amendment down to its "essence", the
 plurality was able to avoid application of strict scrutiny while still
 claiming to remain faithful to First Amendment requirements. How-
 ever, as Justice Kennedy pointed out, strict scrutiny is "the baseline
 rule   for  reviewing    any   content-based    discrimination   against
 speech.""0 The plurality, nevertheless, chose not to apply strict scru-
 tiny, but insistent that the scrutiny employed differed little from the
 strict scrutiny called for by Justice Kennedy."' However, the plural-
 ity's failure to consider less-restrictive alternatives such as addressable
 converters, blocking chips, and lockboxes from its analysis of section
 10(a), which would have undoubtedly invalidated the provision under
 strict scrutiny's "narrow tailoring" requirement,"2 makes clear that
 there is a significant difference in the level of scrutiny employed by
 the Denver plurality and the traditional conception of strict scrutiny.
 The plurality's failure to provide an adequate justification for its deci-
    109 Id. at 2384.
    "0 Id. at 2413 (Kennedy, J., concurring in part, dissenting in part). Additionally,
 the Turner Court had indicated that while regulations singling out one specific me-
 dium raise "serious First Amendment concerns," heightened scrutiny is not required
 if the "differential treatment is 'justified by some special characteristic of the par-
 ticular medium being regulated. Id. at 2468 (citing Minneapolis Star & Trib. Co. v.
 Minnesota Comm'r of Revenue, 460 U.S. 575, 585 (1983)). Yet, there is no special
 characteristic of leased access channels, compared to other types of cable channel, in
 regards to the transmission of sexually explicit material, which merits differential
    " See Denver, 116 S. Ct. at 2387-88; Shea v. Reno, 930 F. Supp. 916, 940
 (S.D.N.Y. 1996), affid, 117 S. Ct. 2501 (1997).
    "2 Cf. Cruz v. Ferre, 755 F.2d 1415, 1420 (1 1th Cir. 1985) (noting control which
 blocking chips provide for parents); Recent Case, supra note 19, at 867-68 ("cru-
 cial" that court consider blocking chips in their "least restrictive means" analysis).
 But cf Denver, 116 S. Ct., at 2393 (noting inadequacies of lockboxes); Time Warner
 Ent. Co., v. FCC, 93 F.3d 957, 982 (D.C. Cir. 1996) (noting that lockboxes are only
 effective if parents possessing them had previous knowledge of the programming
 carried on channels to which they do not subscribe).
 sion not to treat section 10(a) as a content-based regulation on speech
 is troubling.
 B. Common Carrier Treatment
        Although the Supreme Court has previously held that cable
 television in general is not a common carrier, leased access channels
 merit common carrier treatment because they function as common car-
 riers. Leased access channels were created "to assure that the widest
 possible diversity of information sources are made available to the
 public from cable systems ... ." "3 However, according to the plural-
 ity, a court should not apply common carrier case law to cable televi-
 sion because of the uncertain and developing state of cable televi-
 sion."4 The plurality insisted that a common carrier approach would
 not allow the government to address the underlying problems of cable
 television without sacrificing "the free exchange of ideas the First
 Amendment is designed to protect,""5 despite the existence of prece-
 dent to the contrary.
     In FCC v. Midwest Video Corp.,"6 the Supreme Court applied a
 common carrier approach to cable television. The Court held that FCC
 rules requiring certain cable operators to set aside channels for leased
 and PEG access channels"7 imposed common carrier obligations on
 the cable operator with respect to those access channels."8 The Mid-
    13 47 U.S.C. § 532(a) (1996).
    "4 Denver, 116 S. Ct. at 2384. But see Jim Chen, The Last Picture Show (On the
  Twilight of Federal Mass Communications Regulation), 80 MrNN. L. REv. 1415,
  1421 (1996).
    I.S Denver, 116 S. Ct. at 2384.
    116 440 U.S. 689 (1979).
    117 Id at 691-92. The FCC regulations under review required cable operators
 with 3,500 or more subscribers and which carry broadcast signals to set aside certain
 channels for leased and PEG access. Id at 691. PEG access channels are channels
 which cable operators are legally required to set aside for public, educational, and
 governmental access. Denver, 116 S. Ct., at 2407-09 (Kennedy, J., concurring in
 part, dissenting in part).
    118 Midwest Video, 440 U.S. at 701-02. It should be noted that the Court specifi-
 cally stated that although a cable operator would have common carrier obligations
 with respect to the access channels, common carrier obligations would not be im-
 posed on the cable operator with respect to non-access channels. Id at 701, n.9.
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 128          UCLA ENTERTAINMENT LAW REVIEW                    [Vol 5:103
 west Video Court actually invalidated the FCC regulations imposing
 common carrier obligations on cable operators because it was beyond
 the FCC's authority to promulgate such common carrier regulations. "9
 However, after Midwest Video, Congress specifically authorized the
 FCC to promulgate regulations for the establishment of leased access
 channels in the 1984 Act.'20 Given this sequence of events, it seems
 clear that Congress intended the FCC to impose common carrier obli-
 gations on cable operators with respect to leased access channels.'2'
     The Denver plurality also distinguished Sable Communications of
 California, Inc. v. FCC,`22 in which the Court used common carrier
 principles to strike down a ban on indecent telephone conversations.
 To distinguish Sable, the plurality relied, in part, on the technological
 differences between telephones and cable television. The plurality in-
 sisted that telephones are less intrusive and allow the homeowner to
 exercise a greater amount of control over them as opposed to the cable
 television at issue in Denver.'23 Yet, telephones may share more in
 common with cable television for First Amendment purposes, as noted
   119 Id. at 702-09.
   120 47 U.S.C. § 532(b) (1996).
   "21 Even the FCC has acknowledged similarities between cable operators and
 common carriers. While conceding that cable television shares several common
 characteristics with a communications common carrier, the FCC has indicated that a
 significant difference lies in the power that the cable system operator possesses to
 determine the signals which that system carries. Frontier Broad. Co. v. Collier, 24
 F.C.C. 251, 251 (1958). However, since Congress established leased access channel
 requirements, this "significant difference" no longer applies and should not stand in
 the way of designation of cable operators as common carriers. A common carrier
 designation could be restricted to leased access channels because an entity could be
 designated a common carrier with respect to some activities but not others. National
 Ass'n of Regulatory Util. Comm'rs v. FCC, 533 F.2d 601, 608 (D.C. Cir. 1976) The
 specialized nature of leased access channels which makes them not realistically
 available to the general public also does not stand in the way of a common carrier
 designation because "a specialized carrier whose service is of possible use to only a
 fraction of the population may nonetheless be a common carrier if he holds himself
 out to serve indifferently all potential users." Id.
   122 492 U.S. 115 (1989).
   123 Denver, 116 S. Ct. at 2388.
   124 See supra note 33 and accompanying text.
     The plurality also noted that Sable involved a "total governmen-
 tally imposed ban on a category of communication" which, according
 to the plurality, was more potent than the permissive nature of section
 10(a).25 However, this distinction is not well-founded because one
 must read section 10(a) in view of section 10(d),126 which allows for
 the imposition of liability on cable operators for obscene programming
 carried on their leased access channels.127 Fear of liability may actu-
 ally induce cable operators to censor more broadly than necessary to
 safeguard themselves from being held liable for programs on channels
 which they operate. Thus, the permissive approach of section 10(a)
 may actually have the practical effect of being more drastic than a to-
 tal governmental ban like the one present in Sable.2"
     Justice Kennedy's concurrence called for a common carrier ap-
 proach because "[f]aws requiring cable operators to provide leased ac-
 cess [channels] are the practical equivalent of making [cable opera-
 tors] common carriers" similar to telephone companies.'29 While the
 plurality disagreed with this approach, Justice Kennedy's views re-
 garding a common carrier application to cable television actually ech-
 oed his earlier arguments in Turner Broadcasting System, Inc. v.
 FCC,'30 in which he authored the majority opinion which pointed out
 that "by virtue of its ownership of the essential pathway for cable
 speech, a cable operator can prevent its subscribers from obtaining ac-
 cess to programming it chooses to exclude." 3' This language used by
 Justice Kennedy in Turner goes to the heart of the rationale behind
    125 Denver, 116 S. Ct, at 2388.
    126 47 U.S.C. § 558 (1996). Section 10(d) removes the statutory exemption from
 liability for cable operators provided by the 1984 Act.
    127 James N. Horwood, Public, Educational, and Governmental Access on Cable
  Television: A Model to Assure Reasonable Access to the Information Superhighway
 for All People in Fulfillment of the First Amendment Guarantee of Free Speech, 25
 SETON HALLEL. REV. 1413, 1416-17 (1995).
    12' See Altmann v. Television Signal Corp., 849 F. Supp. 1335, 1342-43 (N.D.
 Cal. 1994); Allen S. Hammond Iv, Indecent Proposals: Reason, Restraint and Re-
 sponsibility in the Regulation of Indecency, 3 ViM. SPORTS & ENr. L.J. 259, 276
 (1996); Symposium, supra note 86, at 492-93; supra pp. 20-24.
   129 Denver, 116 S. Ct. at 2411. (Kennedy, J., concurring in part, dissenting in
   130 512 U.S. 622 (1994).
   131 Id. at 2466; See also Horwood, supra note 127, at 1441-43.
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 130         UCLA ENTERTAINMENT LAW REVIEW                    [Vol 5:103
 common carrier jurisprudence.'32    Denver's plurality opinion, how-
 ever, differentiated Turner, which assigned full First Amendment
 protection to cable television, because Turner did not involve the issue
 of the effects of television on children.133 The Denver plurality as-
 serted that Turner's insistence upon full First Amendment for cable
 television, as opposed to the less rigorous First Amendment standard
 normally applied to broadcast television, was based upon the fact that
 spectrum scarcity is not present in cable television.'34
     According to the Denver plurality, however, the differentiation of
 cable and broadcast media based upon spectrum scarcity rationale is
 not relevant when the issue "involves the effects of television viewing
 on children." 135 When the issue involves the effects of cable televi-
 sion on children, according to the plurality, the Pacifica approach is
 more appropriate. However, the "unique accessibility to children" and
 "uniquely pervasive presence" upon which the Pacifica restrictions
 were based are not applicable to cable television, as discussed
 above. 136
     The spectrum scarcity distinction between cable and broadcast
 media requires separate and distinct treatment of cable and broadcast
 media under the First Amendment, even if the effects of television on
 children are at issue. The Turner opinion emphatically stated that "the
 [spectrum scarcity] rationale for applying a less rigorous standard of
 First Amendment scrutiny to broadcast regulation ... does not apply
 in the context of cable regulation." '37 Additionally, with the advent of
   "32 Turner, 512 U.S. 636-41. Turner held that although prior cases have not al-
 ways applied a rigorous First Amendment standard to issues involving broadcast
 television, cable television requires "full First Amendment protection."
   ... Denver, 116 S. Ct. at 2388. Notably, the Turner opinion provides little evi-
 dence of an intent for so narrow an application of its holding.
   114 Id. The spectrum rationale is based on the fact that broadcast media transmits
 messages over the electromagnetic spectrum which does not have enough frequen-
 cies to assign to every group desiring the ability to broadcast. This scarcity of fre-
 quencies requires a regulatory framework to allocate frequencies among willing
 broadcasters through licensing requirements. Courts have used this scarcity to justify
 imposing content restrictions on broadcast licensees that the First Amendment would
 otherwise prohibit. Turner, 512 U.S. 636-38.
   "' Denver, 116 S. Ct. at 2388.
   136 See supra part III.B.3.
   137 Turner, 512 U.S. 637.
 fiber optic technology, channel capacity will prove to be an even
 greater distinction between cable and broadcast television."' There-
 fore, it is difficult to argue that Turner provides any justification for
 applying diminished First Amendment protection to cable television
 when the issue involves the effects of cable television on children.
 Thus, contrary to Denver, cable television should receive full First
 Amendment protection.
     It is clear that the primary rationale behind the plurality's decision
 in Denver is the unsettled state of the industry and technology of cable
 television."' However, courts have always confronted questions re-
 garding novel and uncertain areas of law. This will likely continue
 with more frequency in the future as judges, often with little scientific
 and technical training, face technologically complex issues of law in
 unsettled areas of science and technology. Yet, this has not and should
 not prevent a court from establishing clear and guiding principles of
 law in new or developing areas of technology. Many issues of con-
 temporary society involving original and unsettled problems have
 ended up in courts, often resulting in decisions memorable not only for
 the subject matter of them, but also because of the resulting rules that
 these cases have provided.'4' Accordingly, courts should not avoid
 these questions, but rather seek to provide guidance for society
 through establishment of bright line rules, even if it requires assistance
 and guidance from outside experts. Considering the many aspects of
 society in which courts have adjudicated, it is difficult to reconcile the
 Denver plurality's view that the status of cable television is so unique
 and uncertain as to be currently unfit'for a rule which provides more
 guidance and clarity than the one announced by the plurality.
   138 While use of a coaxial cable system provides a much greater channel capacity
 than is possible with broadcast television, fiber optic technology provides the op-
 portunity for the cable operator to provide a significantly greater channel capacity
 than possible using coaxial cables and the ability for a much easier transition to High
 Definition Television. BRENNER ET AL., supra note 34, § 1.03 [2], at 1-9.
   139 See Denver, 116 S. Ct. at 2385.
   140 See, e.g., Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579 (1952).
 Fall 1997]
 132          UCLA ENTERTAINMENT LAW REVIEW                    [Vol 5:103
     The Denver plurality proposes that broadcast and cable television
 are similar for certain purposes and different for other purposes. How-
 ever, such analysis is inherently subjective. In any given case, the re-
 sult will rest on whether the court perceives the characteristics of cable
 to be sufficient to justify interference with the cable operator's edito-
 rial discretion.'4" The plurality's approach leaves parties guessing
 whether or not a court will consider cable and broadcast television to
 be similar for the specific issue in any future controversy. While there
 are rational arguments for either differentiating or assimilating cable
 and broadcast television for First Amendment purposes, the plurality's
 approach will likely prove unworkable because Denver provides no
 test for determining whether cable and broadcast television are compa-
 rable enough to allow for similar treatment for specific issues other
 than the one present in Denver. It is also too subjective because it
 places too much discretion in the hands of the judge who could ana-
 lyze the two media as he sees fit in order to justify the outcome de-
 sired. This controversy will likely continue until the Court clearly es-
 tablishes a more informative approach for determining how to analyze
 the relationship between cable and broadcast television for First
 Amendment purposes.
     Probably the most troubling aspect of Denver's treatment of sec-
 tion 10(a) is the fact that the plurality allowed the government to place
 restrictions on only one type of protected speech, indecent material on
 leased access channels, without engaging in consideration of any less
 restrictive alternatives,142 merely by asserting that the protection of
   141 Lee, supra note 24, at 576-77.
   142 See Denver, 116 S. Ct., at 2416 (Kennedy, J., concurring in part, dissenting in
 part). But see id at 2431 (Thomas, J., concurring in part, dissenting in part).
 The plurality's decision to strike down section 10(b) in part III of the Denver opin-
 ion was premised on the plurality's view that less restrictive means of protecting
 children, which include blocking chips, blocking channels at the request of parents,
 and lockboxes, are preferable to section 10(b)'s non-permissive approach. Id at
 2392-94. However, the plurality stated that, although such less restrictive alterna-
 tives are not as effective as section 10(b), they are effective enough to protect chil-
 dren from sexually explicit material on leased access channels so as to require that
 section 10(b) be struck down as "overly restrictive." Id. The plurality's treatment of
 these less restrictive alternatives to section 10(b) can be read as implicitly indicating
 such alternatives to be less restrictive than section 10(a), but not effective enough so
 as to overcome section 10(a)'s restrictiveness. This can be explained because section
 children is a compelling interest, and that cable television is a
 "uniquely pervasive presence" and has "unique accessibility to chil-
 dren". The plurality indicated that the need to protect children from
 indecent material is generally not sufficient to justify "reduc[ing] the
 adult population ... to ... only what is fit for children," '43 but con-
 ceded that cable operators may choose to ban indecent programming
 under section 10(a) rather than rearranging or rescheduling indecent
     The plurality's treatment of indecent speech also continues the
 gradual erosion of the First Amendment status of this form of pro-
 tected speech. While indecent speech has been considered a form of
 protected speech meriting full First Amendment protection, the Court,
 through a series of opinions such as Pacifica, and now Denver, has re-
 duced the First Amendment status of indecent speech to one more akin
 to obscene speech. While the Court has traditionally subjected restric-
 tions on protected speech to strict scrutiny analysis, the Denver plural-
 ity's ad hoc analysis upholds section 1 0(a) under analysis more akin to
 intermediate   scrutiny   previously   adopted   in   United   States  v.
 O'Brien.'45 This trend is disturbing because of the slippery slope it
 creates. While restrictions on indecent sexually explicit material may
 10(a)'s provisions are less restrictive than those of section 10(b). However, the
 question left unanswered by Denver is at what point the reduced effectiveness and
 less restrictiveness of alternatives such as lockboxes and blocking chips outweighs
 the increased effectiveness but greater restrictiveness of provisions regulating
 The only answer to that question is somewhere between sections 10(a) and 10(b),
 but, beyond that, it is only speculative.
   143 Id. at 2393 (quoting Sable Communications of Cal., Inc. v. FCC, 492 U.S.
 115, 128 (1989)) (internal quotations omitted).
   '4 Denver, 116 S. Ct. at 2387. The restriction thus prevents adults from gaining
 access to indecent material in order to shield children from exposure to it, and there-
 fore is a ban on indecent speech which the Court has previously held to be prohibited
 by strict scrutiny. Sable, 492 U.S. at 126-27. However, the time channeling ability
 was directly relevant to the Court's decision to uphold the restrictions in Pacifica,
 whereas the cable operator has the power to ban indecent material outright pursuant
 to Denver.
   145 391 U.S. 367 (1968); see supra part II.B.
 Fall 1997]
 134         UCLA ENTERTAINMENT LAW REVIEW                  [Vol 5:103
 not elicit strong opposition, it is still a form of protected speech. It is
 thus necessary to ask, if the government can allow for such restrictions
 on some forms of protected speech, what other forms of protected
 speech will be next and what compelling interest might justify the
 similar restrictions?
     Denver also leaves open the possibility for the government to im-
 pose restrictions on protected speech on cable television through a
 showing of any "extremely important problem." Once an "extremely
 important problem" is shown, the government need only show that the
 restriction is "sufficiently tailored" to respond to the problem. As is
 evident in the plurality opinion, this new, intermediate standard is
 much easier to satisfy than a showing of "compelling interest" and
 "narrow tailoring," as required under strict scrutiny.'46 Not only is the
 new standard easier to satisfy, but it is also difficult to define and ap-
 ply because the plurality fails to provide a useful guide as to what will
 be considered "sufficiently tailored" for purposes of analyzing future
 restrictions on speech.
     The impact of Denver is evident in a recent opinion by a three-
 judge Federal District Court in Playboy Entertainment Group, Inc. v.
 United States,147 which specifically withheld its decision until after the
 Supreme Court announced the Denver decision. The District Court
 denied a preliminary injunction to enjoin enforcement of section 505
 of the Communications Decency Act of 199614' and the Supreme
 Court upheld the District Court's decision in two cases without pub-
 lished opinions.149 Section 505 was enacted to protect children from
 the partial reception of sexually explicit material from cable television
 channels not ordered by a homeowner, otherwise known as signal
 bleed.'5° It requires cable operators to completely scramble or block
   146 Although the plurality concludes that section 10(a) is "sufficiently tailored,"
 Denver, 116 S. Ct. at 2385-86, there is little likelihood that a court could have con-
 sidered the provision to be "narrowly tailored," id. at 2416-17 (Kennedy, J., concur-
 ring in part, dissenting in part).
   147 945 F. Supp. 772 (D. Del. 1996), aff'd, 117 S. Ct. 1309 (1997) (mem.), and
 aff'd sub nom. Spice Ent. Cos. v. Reno, 117 S. Ct. 1309 (1997) (mem.).
   14' 47 U.S.C. § 561 (1996).
   141 Playboy Ent. Group v. United States, 117 S. Ct. 1309 (1997) (mem.); Spice
 Ent. Co. v. Reno, 117 S. Ct. 1309 (1997) (merm.).
   `50 Playboy, 945 F. Supp., at 774.
 the video and audio signals of cable channels primarily dedicated to
 sexually explicit programming."' If the cable operator is unable to
 accomplish this, it must broadcast sexually explicit programming
 when children are not likely to view it."' The court denied issuing a
 preliminary injunction regarding section 505, in part, because the court
 held that there was not a sufficient likelihood of the applicants suc-
 cessfully challenging the provision on First Amendment grounds.'5
 In its decision, the court relied heavily on Denver by asserting that,
 although section 505 is content-based, it is carefully tailored to serve
 the compelling interest of protecting children.'54 In Playboy, the court
 also placed significant emphasis on the similarity between the time
 channeling provision of section 505(b) and the endorsement of time
 channeling in Pacifica. " The court viewed these time channeling re-
 quirements in section 505(b) as a satisfactory less restrictive alterna-
 tive to the expensive and burdensome scrambling or blocking re-
 quirements in section 505(a).156
     Playboy illustrates the situation created by Denver in which a court
 can avoid analyzing content-based cable regulation under strict scru-
 tiny through a finding of a compelling interest. The impact of the
 Court's broad construction of Pacifica in the Denver decision is ap-
 parent in Playboy. The once narrowly-construed case involving broad-
 cast radio was revived by the Denver plurality and is now applicable
 whenever the protection of children from sexually explicit material is
 at issue whether the medium is broadcast or cable, and the possibility
 exists for a court to construe Denver's applicability even beyond those
     While it may be true that indecent materials will be subject to a
  lessened degree of scrutiny on cable television in the aftermath of
  Denver through a showing of a "uniquely pervasive presence" and
  "unique accessibility to children," 157 it appears that other types of of-
    151 47 U.S.C. § 561(a) (1996).
    152 Id. § 561(b).
    153 Playboy, 945 F. Supp. at 783-90.
    114 Id. at 785-87.
    `" See id. at 788-89; see also supra p. 20-21.
    156 Playboy, 945 F. Supp. at 788.
    "' Cf Playboy, 945 F. Supp. at 787 (D. Del. 1996), aff'd, 117 S. Ct. 1309 (1997)
 (mem.), and aff'd sub nom. Spice Ent. Cos. v. Reno, 117 S. Ct. 1309 (1997) (mem.)
 Fall 1997]
 fensive non-indecent material, such as graphic depictions of violence,
 will still be entitled to full First Amendment protection."5' There
 seems to be little justification for this inconsistency considering the
 problems posed by exposing children to programming containing ex-
 cessive violence'59 and considering that the Court has previously held
 that speech regulations which are substantially underinclusive violate
 the First Amendment.160    However, the plurality opinion in Denver
 failed to even mention this issue. The best chance of avoiding lessened
 First Amendment protection on cable television when children are at
 stake after Denver will be to demonstrate a link between the protection
 of children and the spectrum scarcity rationale, which allowed for full
 protection of cable television in Turner. This will likely be the case
 until the Court decides that cable television achieves a status at which
 the Court is willing to establish a bright line rule under which to ana-
 lyze speech restrictions on cable television.
     Even with the guidelines that the Denver plurality provides, it is
 uncertain what their actual probative value is because of the emphasis
 which the plurality places on the narrowness of their opinion and their
 reluctance to establish a clear and broad rule for analyzing cable tele-
 vision for First Amendment purposes.16' Therefore, it may not be too
 difficult for a court to confine Denver to its facts. For example, Judge
 Williams of the United States Court of Appeals for the D.C. Circuit
 indicated that the underlying reasoning of Denver appeared to be that
 Congress could impose content-based conditions grants of cable chan-
 (asserting that it is largely the "uniquely pervasive presence" of radio that motivated
 the Pacifica Court to uphold the restrictions).
   157 47 U.S.C. § 561 (1996).
   158 See Denver, 116 S. Ct. at 2416 (Kennedy, J., concurring in part, dissenting in
   159 See, e.g., Editorial, Tune Out the Violence; Kids and TV: Attorney General,
 AMA Join Forces to Promote Healthier Viewing Habits, BALT. SuN, Nov. 12, 1996,
 AND THE MANIPULATION OF AMERICAN LIFE 13-50 (1978). But see, e.g., Marc Silver,
 Sex and Violence on TV. The Family Hour is Gone. There's Still a Splattering of
 Guts in Prime Time, But the Story of the Fall Lineup is the Rise of Sex. Will the Net-
 works Ever Wise Up?, U.S. NEWS & WORLD REP., Sept. 11, 1995, at 62, 68.
   "6 City of Ladue v. Gilleo, 114 S. Ct. 2038, 2043 (1994).
   161 Denver, 116 S. Ct. at 2385.
 nels to lessees.'62 Conversely, there is also the possibility that a court
 could broadly construe Denver to apply to any situation in which
 speech enjoys a "uniquely pervasive presence" and is "uniquely ac-
 cessible to children." The ramifications of this a construction are tre-
 mendous. Settled and consistent First Amendment case law beyond
 the area of television could be threatened by Denver if a court makes
 the argument that any speech with these qualities is entitled to less-
 ened First Amendment protection. Analogies could be made between
 Denver and the internet, literature, or any other communications me-
 dium. The United States Court of Appeals for the Ninth Circuit, for
 example, cited Denver as support for the proposition that "there is 'a
 compelling interest in protecting the physical and psychological well-
 being of children' [that] '... . extends to shielding minors from the in-
 fluence of literature that is not obscene by adult standards."" 63 Only
 time will tell whether courts are able to apply a Denver-like approach
 to regulation outside the context of cable television and broadcast me-
 dia by finding an "extremely important problem," a "uniquely perva-
 sive presence" and "unique accessibility."
     The Denver plurality opinion leaves little clue as to how it should
 be applied in the face of new technologies confronting the cable in-
 dustry such as fiber optics and direct broadcast satellite technology
 (DBS). DBS poses a significant threat to traditional cable television
 because it is more flexible than cable technology in several ways. Be-
 cause it can provide regional or national coverage from a single
 source, it can enter new markets with relative ease and does not re-
 quire easements as is the case with cable television."6' Additionally, a
 DBS provider, unlike a cable operator, does not require a minimum
 number of subscribers before providing the service to a particular
 community.'65 It is thus possible for a DBS provider to enter markets
 scattered across the country with great flexibility. Additionally, DBS
 technology is more conducive to the delivery of High Definition Tele-
   162 Time Warner Ent. Co.,. v. FCC, 105 F.3d 723 (D.C. Cir. 1997) (per curiam)
 (Williams, J., dissenting), denying reh'g en banc to 93 F.3d 957 (D.C. Cir. 1996).
   163 Crawford v. Lungren, 96 F.3d 380, 386 (9th Cir. 1996) (citations omitted),
 cert. denied, 117 S. Ct. 1249 (1997).
   '" JOHNSON, supra note 35, at 11 1-12.
   165 Id.
 Fall 1997]
 138         UCLA ENTERTAINMENT LAW REVIEW               [Vol 5:103
 vision (HDTV).'66 The increased channel capacity of DBS along with
 its ability to provide programming originating from distant communi-
 ties raises questions about the viability of Denver's rationale in such a
     In all, the uncertainties created by Denver surpass the guidance
 provided by the opinion. Primarily, two important issues remain unre-
 solved. The first major unresolved issue regards cable operators' edi-
 torial powers over leased access channels. The other major unresolved
 issue is the exact status of cable television for First Amendment pur-
 poses. The plurality opinion actually created confusion over this issue
 that was seemingly clear after the Turner opinion. These issues have
 major ramifications for not only the two specific media, but the First
 Amendment in general. Confusion regarding these issues will likely
 continue until the Court establishes clear and stable rules. Thus, Den-
 ver is not likely to be the end of litigation regarding these two impor-
 tant and unresolved issues.
     The Supreme Court should have struck down section 10(a) under
 the First Amendment as an unconstitutional restriction on free speech.
 Such a holding would have been justifiable under a common carrier
 approach or strict scrutiny due to section 1 0(a)'s content-based nature.
 This would have allowed the Court to remain consistent to Turner and
 the cable-broadcast distinction which is accurately based upon the dis-
 tinct technologies and qualities underlying the two media. However,
 even without strict scrutiny or a common carrier approach, section
 10(a) still should have been invalidated under the plurality's ad hoc
 approach, because a close examination reveals that three of the four
 grounds relied upon by the plurality are flawed. The cable operators'
 editorial interests over leased access channels are not sufficient to
 outweigh the interests of cable programmers to transmit uncensored
 programming over leased access channels. Furthermore, section 10(a)
 does not present a situation similar to that which existed in Pacifica.
 Finally, Section l0(a)'s "permissive" approach provides the opportu-
 nity for greater restrictiveness than the plurality acknowledges.
 166 Id. at 123-24.
     The plurality's opinion upholding section 10(a) creates a situation
 in which there are no clear guiding principles when evaluating cable
 television under the First Amendment.'67     The status of the First
 Amendment regarding cable television now seems more unpredictable
 and vague than it was following the Turner decision and leaves open
 several undesirable possibilities. The plurality distinguished applicable
 First Amendment case law, some of which even involved cable televi-
 sion, choosing instead to apply case law involving broadcast media,
 through analogy, based upon disputable similarities. However, in
 practice, Denver's precedent is inherently flawed because the First
 Amendment caselaw which a court can analogize to the issues in a
 particular case depends much upon how that court makes the analogy
 between cable television and broadcast media regarding the issue in
 controversy. Under this approach it is often possible to make a strong
 argument for approximating and differentiating cable and broadcast
 media in any given situation and the Denver decision leaves no clear
 guidance as to which particular case a judge might find to be the clos-
 est analogy.'68 Thus, courts can choose to assert that either cable is
 similar or different to broadcast media in order to facilitate a desired
 outcome in any given case.
     Denver also leaves open the possibility that its holding can be ap-
 plied to any medium and in any context through a showing of an "ex-
 tremely important problem," a "uniquely pervasive presence," and
 "unique accessibility to children." While, this approach can be traced
 to Pacifica, the Pacifica Court did not intend it to be applied outside
 the immediate context of that case. However, Denver added enormous
 vitality to the Pacifica doctrine so that the boundaries of its application
 are now uncertain. This is the most troubling aspect of the plurality
 opinion because it could be used by a court to circumvent applicable
    "67 See Playboy Ent. Group, Inc. v. United States, 945 F. Supp. 772, 784 (D. Del.
  1996), aft'd, 117 S. Ct. 1309 (1997) (mem.), and affid sub nom. Spice Ent. Cos. v.
  Reno, 117 S. Ct. 1309 (1997) (mem.); GOODALE, supra note 105, § 6.05[3], at 6-65.
    168 Cf William S. Abbott, Questions Asked by Senator Pressler and Answers
  Thereto by William Abbott and Robert M. O'Neil, in REPORT OF THE HEARING OF
  THE SENATE COMMITTEE ON COMMERCE, July 12, 1995, at 539, 543 (PLI Patents,
  Copyrights, Trademarks, & Literary Property Course Handbook Series No. 440,
  1995) ("It is clear that government regulation of speech must not be subject to ad
  hoc or subjective application.").
 Fall 19971
 140        UCLA ENTERTAINMENT LAW REVIEW               [Vol 5:103
 First Amendment law and justify otherwise unconstitutional restric-
 tions on speech. These possibilities call for the Supreme Court to con-
 fine Denver to its facts and establish a coherent and satisfying standard
 for application to future issues involving cable television and the First

Volume 05, Issue 1, pp 141-166, Efaw

 Total Concept and Feel: A Proper Test
 for Children's Books
 Andrew C.S. Efaw*
     There is nothing new under the sun.1
     Amy is an aspiring children's book2 author and has recently com-
 pleted a 1,000 word picture book manuscript,3 entitled Fritzi and the
 Blind Man. The story, based upon an actual childhood experience of
 her grandfather,4 is about six year old Fritzi. On his way to school in
   * B.S., United States Military Academy 1989; J.D., University of Pennsylvania
   1997. Thanks to Professor Robert A. Gorman of the University of Pennsylvania
   for his insight and direction during the nascent stages of this paper. Special thanks
   to wife, Amy, who inspired this paper and is soon to have her first children's book
   published. Finally, thanks be to God, the only true creator of original works of
      Ecclesiastes 1:9 (New American Standard).
 (detailing the history of children's literature from the Latin Orbis Pictus in 1657 to
 the present).
   ' Most picture books contain between 200 and 1,000 words. See Celia Berridge,
 THEM PUBLISHED 54, 59 (Treld Pelkey Bricknell & Felicity Trotman eds., 1988).
 Beuning ed., 1997) (stating that the majority of picture books contain about 1,000
   4 Ninety percent of all authors base their first book published "on actual per-
 YOUR NOVEL 1 (1993).
 142          UCLA ENTERTAINMENT LAW REVIEW                     [Vol 5:141
 1917 Vienna, Fritzi daily walks past the same street beggars and is
 fascinated by a particular violin-playing, blind beggar. The blind man
 blesses anyone who he hear putting coins in his cup. Fritzi wants to be
 blessed but does not have any coins, so he fools the beggar by tossing
 a button rather than a coin into the cup. In the end, Fritzi realizes that
 even innocent pranks can hurt another person.
     Amy sends the manuscript to a publisher5 without a copyright no-
 tice, without depositing a copy with the Library of Congress and with-
 out registering the work with the Copyright Office.6 When the work
 arrives at the publishing company, Andy, a junior editor, picks Amy's
 manuscript out of the "slush pile" and reads it.7 Thereafter, Andy re-
    ' Note that Amy sends her manuscript directly to the publishing company. She
 does not have an agent. "[T]he ratio of acceptances to rejections is something on the
 order of one in ten thousand" when authors submit "unagented" material to pub-
   6 Though beginning authors are occasionally worried that their work will be
 stolen, they commonly submit work without copyright formalities. See EPSTEIN, su-
 pra note 2, at 101. Apparently new authors ignore copyright formalities because
 they are wary of doing something that will hinder their works from being published.
 See 1997 CHILDREN'S WRITER'S & ILLUSTRATOR'S MARKET, supra note 3, at 13
 (explaining that some industry experts feel that "a copyright notice will only confuse
 publishers about whether the material is registered (acquiring rights to previously
 registered material is a more complicated process)"); Elaine Marie Alphin, Copy-
 right: To Register or Not?, CHILDREN'S WRITER (Inst. of Children's Literature, West
 Redding, Conn.), Dec. 1995, at 5 (arguing that registration can "send the message
 that you don't trust the editor"). Normally, the publisher will take care of the for-
 malities once the copyright is sold. See id.; 1997 CHILDREN'S WRITER'S &
 ILLUSTRATOR'S MARKET, supra note 3, at 13 ("It is a publisher's responsibility to
 register your book for copyright.").
   ' Junior editors act as the first reader in the publishing company bureaucracy,
 sifting through the mounds of unsolicited manuscripts, and make the initial determi-
 nation of whether or not a manuscript is publishable. See BERTHE AMOSST & ERIC
 (1995) (stating that junior editors are usually young, college educated and that read-
 ing manuscripts is only one of many of their responsibilities); CURTIS, supra note 5,
 1990's 5-6 (1992) (noting that the junior editor logs the manuscripts by date, title
 and author before reading them). Most of these are poorly written and rejected by
 the junior editor. Id at 27. Some companies do not even read these manuscripts but
 return them with a form letter. CURTIS, supra note 5, at 10 (" [lit is clearly cost-
 Fall 1997]     COPYRIGHTING CHILDREN'S BOOKS                             143
 turns the manuscript, informing Amy that the publishing company
 does not find her work suitable for their list.8
     Andy, however, truly likes the story and thinks it will sell. He
 goes home, rewrites the story as best as he can from memory. He
 changes the name of the main character to Franz and sets the story in
 turn of the century Berlin, but in every other way he tries to recreate
 Amy's story's ambience and charm. Upon finishing the story, Andy
 sells it as his own to his employer publishing company under the title,
 Franz and the Button.9
 ineffective to retain editors to read 'unagented' manuscripts .....
       Manuscripts sent to publishers directly by authors, without the benefit of an
 agent, are called "slush" and are put on the so-called "slush pile" of unagented
 manuscripts. Id (" Manuscripts submitted to publisher by unrepresented authors are
 described by the depressing term slush .... "); see also AMOSST & SUBEN, supra, at
 84-85 (discussing "slush piles"); LITOWINSKY, supra, at 4-5 (discussing "slush
   ' See, e.g., Letter from HarperCollins Publishers (May 16, 1996), to Amy Efaw
 (" [W]hile we wish we had good news, we're afraid we do not feel it is right for our
 list."), Letter from Viking Children's Books to Amy Efaw (" [W]e regret to say that
 it is not right for us."); Letter from Alfred A. Knopf to Amy Efaw (" [W]e... regret
 to say it is not right for our list."); Letter from Houghton Mifflin Company to Amy
 Efaw (" [W]e do not believe we could publish it successfully."); Letter from Henry
 Holt and Company, Inc. to Amy Efaw (" [W]e do not feel it is suitable for our list.")
 (all letters are on file with the author); see also AMoss & SUBEN, supra note 7, at
 92-93 (showing actual examples of rejection letters); LITOWINSKY, supra note 7, at 6
 (noting that publishing companies often reject manuscripts with the catch-all phrase,
 "because they're not right for the list.").
   ' This scenario is realistic because of the large volume of manuscripts received.
 See CURTIS, supra note 5, at 11 (making the conservative estimate that the average
 publishing company receives five thousand unsolicited manuscripts per year);
 LITowINSKY, supra note 7, at 5 (" [T]he average publishing house receives three to
 five thousand manuscripts a year."). Thus, publishers cannot possibly manage to
 check each manuscript's originality and, therefore, have no formal checks in place.
 See Telephone Interview with Clay Winters, President, Boyds Mills Press (Boyds
 Mills, a subsidiary of Highlights Corporation, publishes various children's books.),
 Former President, Putnam/Grosset Books for Young Readers (Putnam is one of
 America's largest and oldest publishers of children's books.) (Mar. 19, 1997) [here-
 inafter Winters].
      However rare it may be for a junior editor to steal a story, they clearly have a
 monetary motive. See CURTIS, supra note 5, at 11 (stating that the average junior
 144           UCLA ENTERTAINMENT LAW REVIEW                       [Vol 5:141
      Eighteen months later,'0 Amy is browsing in the children's section
  of her local bookstore and comes across Andy's version of her story."
  Does Amy have a favorable federal case against Andy for the copy-
  right infringement of her story?12
      According to the Copyright Act of 1976, original literary works
  fixed in a tangible form   are protected.13 Fortunately, neither Amy's
  failure to affix a copyright notice to her manuscript,14 nor her failure to
  editor only makes about twenty thousand dollars a year).
    '0 See 1997 CHILDREN'S WRITER'S & ILLUSTRATOR'S MARKET, supra note 3, at
 43-151 (showing that the children's book companies publish one to three years after
 acceptance of a manuscript).
    " A fact pattern very similar to this hypothetical actually occurred in Smith v.
 Little, Brown, & Co., 245 F. Supp. 451 (S.D.N.Y. 1965), aff'd, 360 F.2d 928 (2d Cir.
       In that case, the head of the Juvenile Division at Little Brown, together with an
 author friend, illicitly copied and published another author's manuscript that had
 previously been rejected by Little Brown. Id. See discussion infra part II.C. See
 also EPSTEIN, supra note 2, at 102 (arguing that "an established company can be ex-
 pected to handle literary work submitted to it in good faith, making the danger of
 theft slight."); Saundra Tony, Fact Fiction and Fairness: The Copyright Wars
 Surge, WASH. POST, June 19, 1995, at F07 (quoting New York lawyer Carl Person
 who insists that this is a common practice at least in the Hollywood screenplay sub-
 mission process, if not with book publishers).
    "2 In this paper, Amy's hypothetical case against Andy will be referred to as
 Andy v. Amy.
       The Copyright Act of 1976, 17 U.S.C. § 102(a)(1).
     Copyright protection subsists, in accordance with this title, in original works of
     authorship fixed in any tangible medium of expression, now known or later devel-
     oped, from which they can be perceived, reproduced, or otherwise communicated,
     either directly or with the aid of machine or device. Works of authorship include
     the following categories: (i) literary works ....
       Notice is not a prerequisite for copyright protection. Id. § 40 1(a) (" Whenever
 a work protected under this title is published ... a notice of copyright as provided by
 this section may be placed on publicly distributed copies .. . .") (emphasis added).
 Prior to the 1976 Act, "[flederal copyright arose upon publication with notice; if no
 Fall 1997]      COPYRIGHTING CHILDREN'S BOOKS                                 145
 deposit a copy of her story with the Library of Congress,15 nor her
 failure to register her work affect her copyright protection.16         Even
 without these formalities, Amy possesses a valid copyright'7 and,
 therefore, has the exclusive right to reproduce and distribute copies of
 Fritzi and the Blind Man.'8 By demonstrating that she owns a valid
 notice, work fell into public domain." ROBERT A. GORMAN & JANE C. GINSBURG,
 COPYRIGHT FOR THE NINETIEs 388 (4th ed. 1993).
      If a notice appears on the copies, it shall consist of the following three elements: (1)
      the symbol © (the letter C in a circle), or the word "Copyright", or the abbreviation
      "Copr."; and (2) the year of the first publication of the work .... ; and (3) the name
      of the owner of copyright in the work ..
  17 U.S.C. § 401(b)
    '5 17 U.S.C. § 407(a)
      The owner of copyright or of the exclusive right of publication in a work published
      in the United States shall deposit, within three months after the date of such publi-
      cation - (1) two complete copies of the best edition .... [Tihe deposit requirements
      of this subsection ... are [not] conditions of copyright protection.
    16 17 U.S.C. § 201(a) ("Copyright in a work protected under this title vests ini-
 tially in the author or authors of the work.").
    17 17 U.S.C. § 408(a).
    At any time... the owner of copyright... may obtain registration of the copyright
      ... by delivering to the Copyright Office the deposit specified by this section, to-
      gether with the application and fee specified by sections 409 and 708. Such regis-
      tration is not a condition of copyright protection.
 Id. See generally GORMAN & GINSBURG, supra note 14, at 384-89. However, note
 that though registration is optional, it is a prerequisite to filing suit. 17 U.S.C. §
 411 (b) (" [N]o action for infringement of the copyright in any work shall be insti-
 tuted until the registration... has been made. . .
    Is 17 U.S.C. § 106(1).
    [T]he owner of a copyright under this title has the exclusive rights to do and to
    authorize any of the following: (1) to reproduce the copyrighted work in copies or
    phonorecords; (2) to prepare derivative works based upon the copyrighted work; (3)
    to distribute copies or phonorecords of the copyrighted work to the public by sale or
    other transfer of ownership ....
 146          UCLA ENTERTAINMENT LAW REVIEW                      [Vol 5:141
 copyright of her picture book'9 and alleging that Andy copied con-
 stituent elements unique to her story,20 Amy has a prima facie case
 against Andy.21
     However, when faced with a lawsuit, Andy is likely to claim that
 he never copied any of Amy's expression. He will claim that Franz
 and the Button and Fritzi and the Blind Man share some of the same
 ideas but do not have any common copyrightable expression. Since
 the Copyright Act protects original works but does not "extend to any
 idea,"22 Amy must prove that Andy's story actually copied protected
 expression. Thus, the Copyright Act itself provides Amy with no in-
    "9 Amy can prove original authorship despite her lack of formalities. For in-
 stance, she may have witnesses that read the story before she sent it to Andy, she
 may have an electronic date stamped record of her story on her computer, or she
 may have Andy's rejection letter and returned manuscript. Any variation of the
 above evidence would tend to show that she was the originator of the story. How-
 ever, Clay Winters of Boyds Mills Press claims that the only foolproof way to prove
 original authorship is for the author to mail a copy of the manuscript to herself prior
 to submitting it to a publishing company. See Winters, supra note 9. The unopened,
 dated copy would provide strong evidence of original authorship. Id.
   20 See Feist Publications, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340 (1991). In
 Feist, the Supreme Court established that "[t]he mere fact that a work is copyrighted
 does not mean that every element of the work may be protected. Originality remains
 the sine qua non of copyright; accordingly, copyright protection may extend only to
 those components of a work that are original to the author." Id. at 348.
   2" Amy undoubtedly has a valid cause of action against the publishing company
 too, but publishers often protect themselves by requiring authors to guarantee in their
 contract that their work is "new and original." See CURTIS, supra note 5, at 82
 (" [M]ost [publishers] place the responsibility for their protection from lawsuits
 squarely on the shoulders of authors."); MARK L. LEVINE, NEGOTIATING A BOOK
 CONTRACT 16 (defining indemnification in a standard book contract as requiring an
 author to "reimburse the publisher for its losses and expenses if a representation or
 warranty made by [the author] is wrong and the publisher is sued or loses money as
 a result"). See also Winters, supra note 9.
   22 17 U.S.C. § 102(b). See also H.R. REP. NO. 94-1476, at 56-57 (1976)
 (" Copyright does not preclude others from using the ideas or information revealed
 by the author's work.").
      "No author may copyright facts or ideas. The copyright is limited to those as-
 pects of the work-termed 'expression'-that display the stamp of the author's
 originality." Harper & Row Publishers, Inc. v. Nation Enters., 471 U.S. 539, 547
 (1985). This principle is known as the idea/expression dichotomy. Feist, 499 U.S.
 at 350. See also PAUL GOLDSTEIN, COPYRIGHT'S HIGHWAY 19 (1994).
 dication of her chances for victory over Andy and only serves as a
 springboard into the sea of existing case law. Only by examining past
 judicial interpretation of the Copyright Act can Amy determine her
 chances of prevailing against Andy.
 A.    The Early Cases
     Historically, the boundary line between taking mere ideas and
 copying expression has been far from clear. In the seminal case of
 Nichols v. Universal Pictures Corp.,23 Judge Learned Hand discussed
 what constitutes a non-infringing taking. In Nichols, the plaintiff al-
 leged that the defendant had stolen his play, "Abie's Irish Rose,"24 by
 writing and producing "The Cohen's and the Kelly's." Both plays re-
 volved around the conflict that arises when the child of a Jewish fam-
 ily and the child of an Irish Catholic family intermarry.25 Judge Hand
 held that the plays were similar, but too unlike to constitute infringe-
 ment.26 He asserted that the plot of any work can be described in
 terms "of increasing generality ... as more and more of the incident is
 left out."'27 However, on that continuum from exact copying to general
 idea, a blurred line exists, beyond which protection is no longer ex-
 tended.28 "Nobody has ever been able to fix that boundary, and no-
 body ever can."29
     Judge Hand's prophecy held true six years later in the much-
 celebrated case, Sheldon v. Metro-Goldwyn Pictures Corp.30  In
 Sheldon Judge Hand ruled that Metro-Goldwyn infringed upon
 Sheldon's copyright of his play31 when the studio produced a movie
   23 45 F.2d 119 (2d Cir. 1930), cert. denied, 282 U.S. 902 (1931).
   24 Id. at 120.
   25 Id.
   26 Id. at 121.
   27 Id
   28 Id.
   29 Id.
   30 81 F.2d 49 (2d Cir. 1936), cert. denied, 298 U.S. 669 (1936), 106 F.2d 45 (2d
 Cir. 1939), affd, 309 U.S. 390 (1940) (damages).
   " Sheldon produced a play based on the story of the Scotch girl, Madeleine
 148          UCLA ENTERTAINMENT LAW REVIEW                 [Vol 5:141
 about the same historical incident.32 Though none of the actual dia-
 logue was copied, Judge Hand explained that words, gestures, scenery
 and costumes are among the factors that bind a play "together in an in-
 separable unity" and render it able to be copyrighted.33 Furthermore,
 Metro-Goldwyn was not let off the hook for incorporating only parts
 of the plaintiffs work because "no plagiarist can excuse the wrong by
 showing how much of his work he did not pirate."34
     Even though these two early cases are often quoted for the above
  propositions, they seem to do very little in helping Amy form a case.
  Judge Hand never expressly addresses the difference between the two
  cases. Important to Amy's case, however, is that Sheldon does show
  that in order to be guilty of a copyright violation, Andy need not have
  copied Amy's words verbatim. Nevertheless, questions remain: How
  much is too much? How much or what must Andy have taken to in-
  fringe Amy's copyright?
  B.   The Test
     1.    Arnstein
     The test for copyright infringement became more clear when Judge
 Frank decided the 1946 case of Arnstein v. Porter35 against the back-
 drop of the early Judge Hand cases.36 In Arnstein, Judge Frank set up
 the definitive test to determine when copyright infringement has oc-
 Smith, who was brought to trial in 1857 for the attempted murder and murder of her
 lover by poisoning. Id at 49. The prosecution, however, was unable to prove her
 guilt. Id. The case was closely followed in Scotland and England, and became
 "cause celebre" even into the twentieth century. Id
   32 Id. at 56. Judge Hand said that two questions must be answered to determine
 whether a copyright infringement has occurred: 1) Did the defendants use the plain-
 tiff's work to produce their own? 2) If so, was the use an infringing use? Id at 54.
   " Id. at 55-56.
   14 Id at 56.
   '5 154 F.2d 464 (2d Cir. 1946), cert. denied, 330 U.S. 851 (1947).
   36 See Nichols v. Universal Pictures Corp., 45 F.2d 119 (2d Cir. 1930), cert. de-
 nied, 282 U.S. 902 (1931); Sheldon v. Metro-Goldwyn Pictures Corp., 81 F.2d 49
 (2d Cir. 1936), cert. denied, 298 U.S. 669 (1936), 106 F.2d 45 (2d Cir. 1939), affd,
 309 U.S. 390 (1940) (damages). See also discussion part II.A.
 curred.7 First, after the plaintiff establishes that he is the owner of a
 valid copyright, he must then show that the defendant copied the copy-
 righted work.38 The defendant may admit the copying, or the copying
 can be inferred,39 either by showing circumstantial evidence of access
 or by showing probative similarity. Experts are regularly asked to
 testify regarding the probative similarity between two works." Next,
 the plaintiff must show that the defendant's work is substantially
 similar to the plaintiffs work.4' In this second portion of the inquiry,
 experts are inappropriate;42 instead, substantial similarity is deter-
 mined by an ordinary or lay audience.43 However, the lay jury must
 understand that the substantial similarity inquiry only applies to simi-
 larity of expression, not to facts or ideas.44 This substantial similarity
 inquiry can be satisfied either by showing the requisite quantity of the
 copying45 or quality of the copying.46
  PRACTICE § 7 (1989); GORMAN & GINSBURG, supra note 14, at 404; Michael L.
  Sharb, Comment, Getting A "Total Concept and Feel" of Copyright Infringement,
  64 U. COLO. L. REV. 903, 908-09 (1993).
    38 See GOLDSTEIN, supra note 37, at § 7; GORMAN & GINSBURG, supra note 14,
  at 404; Sharb, supra note 37, at 908-09.
    19 See GORMAN & GINSBURG, supra note 14, at 404.
    40 See id
    41 See GOLDSTEIN, supra note 37, at § 7.
    42 See id.
    43 See GORMAN & GINSBURG, supra note 14, at 404.
    44 See id.
    45 See id
    46 See GOLDSTEIN, supra note 37; GORMAN & GINSBURG, supra note 14, at 404;
  Sharb, supra note 37, at 908-09.
       The Second Circuit continues to use the Arnstein test today, but in an abbrevi-
  ated form. The recent case, Twin Peaks Prods., Inc. v. Publications Int'l, Ltd., illus-
  trates the change. 996 F.2d 1366 (2d Cir. 1993). See generally Publication of
  Show's Plot Not Fair Use, MEALEY'S LITIG. REPS.: INTELL. PROP., June 25, 1993;
  Abridgement Must Be Transformative Use In Order To Qualify For Fair Use De-
 fense, PAT., TRADEMARK & COPYRIGHT J., June 17, 1993, at 158. The Second Cir-
 cuit held that after access is proven, it is appropriate to skip the question of probative
 similarity, going directly to the question of substantial similarity: "Since a showing
 of substantial similarity will necessarily include the lesser showing of probative
 similarity, there seems little harm in combining the copying and infringement in-
 quiries... .." Id at 1372 n.1 (citing Warner Bros., Inc. v. American Broadcasting
 Companies, Inc., 720 F.2d 231, 239-43 (2d Cir. 1983)). But see MELVILLE B.
 150          UCLA ENTERTAINMENT LAW REVIEW                     [Vol 5:141
     2.     Krofft: A Second Test?
     Seemingly, circuit courts also use a second test, the extrinsic-
 intrinsic test, first introduced by the Ninth Circuit in Sid & Marty
 Kroffi Television Productions, Inc. v. McDonald's Corp.47 Under the
 extrinsic-intrinsic test, the plaintiff must first demonstrate that he is the
 owner of a valid copyright48 and that the defendant had access to the
 work.49 Once these prerequisites have been satisfied, the extrinsic test
 is applied to determine if any ideas have been taken.50 Here, the fact-
 finder uses "specific criteria which can be listed and analyzed."5' Ap-
 NIMMER & DAVID NIMMER, NIMMER ON COPYRIGHT § 13.03 (1995) [hereinafter
 NIMMER]; Alan Latman, "Probative Similarity" as Proof of Copying: Toward Dis-
 pelling Some Myths in Copyright Infringement, 90 COLUM. L. REV. 1187 (1990).
       The Eleventh Circuit also uses the Arnstein test. See Beal v. Paramount Pic-
 tures Corp., 20 F.3d 454, 459 (1 1th Cir. 1994) (citing Original Appalachian Art-
 works, Inc. v. Toy Loft, Inc., 684 F.2d 821, 829 n.11 (11 th Cir. 1982)). See gener-
 ally "Coming to America" Movie Did Not Infringe on Novel's Protectable
 Expression, PAT., TRADEMARK & COPYRIGHT J., May 19, 1994, at 83.
   4' 562 F.2d 1157 (9th Cir. 1977); see generally Sharb, supra note 37, at 909.
 The court criticized the Arnstein test, saying that the test would have the untenable
 result of protecting "a cheaply manufactured plaster statue of a nude." Krofft, 562
 F.2d at 1162. But the court seems to have forgotten the "merger doctrine" which
 covers this supposed shortcoming. See NEIL BOORSTYN, COPYRIGHT LAW § 10:14
 (1981) (explaining the merger doctrine).
       The Fourth Circuit also often uses the extrinsic-intrinsic test. See, e.g., Towler
 v. Sayles, 76 F.3d 579 (4th Cir. 1996); see generally Inference ofAccess to Work Via
 Intermediary Is Rejected, PAT., TRADEMARK & COPYRIGHT J., Mar. 7, 1996, at 568;
 but cf 18 ENT. L.J. 5 (1996) (claiming that the intrinsic-extrinsic test used in Sayles
 has been discredited and the preferred method is the one used in Arden v. Columbia
 Pictures, 908 F. Supp. 1248 (S.D.N.Y. 1995) (using the Arnstein test)).
   41 Krofft, 562 F.2d at 1164. This is also the prerequisite for the Arnstein test.
 See supra note 38 and accompanying text.
   49 Krofft, 562 F.2d at 1164.
   50 Id.
   s' Id Experts are usually used for this part of the analysis. Id
      Professor Latman criticizes this altered test. He agrees that the Arnstein and
 Krofft tests are essentially the same, "[b]ut the respective first prongs pass each
 other in the night, even though each speaks of dissection by experts. Arnstein fo-
 cuses on copying versus independent production, Krofft on copying of ideas rather
 than copying of expression.... Krofft virtually assumes copying and therefore is
 parently, the purpose behind the extrinsic test is to excise from the two
 works the portions of expression that have similar ideas. Those por-
 tions can then be examined under the intrinsic prong of the test to de-
 termine if they are substantially similar.52 Finally, the intrinsic prong
 is applied. This test requires the "response of the ordinary reasonable
 person" to determine if substantial similarity in expression exists.53
     3.     Only One Test
     Although there has been a great deal of confusion, largely due to
 the misleading wording in the Krofft test,54 the Arnstein test and the
 much less helpful." See Latman, supra note 46, at 1202-03. See also NIMMER, su-
 pra note 46, at § 13.03[E][3]. The differences between the two tests only seem to
 matter for summary judgements.
    52 GOLDSTEIN, supra note 37, at § 7.3 n.6 (" The court's characterization of the
 first- extrinsic- test ... is possibly misleading, for it is hard to imagine a copy-
 right case in which the ideas underlying the two works will not be similar....
 Doubtless, all the court intended was to require an initial separation of the unpro-
 tected ideas in the plaintiff's work from its protected expression."). However, the
 Krofft court claimed that this analysis is what the Arnstein test intended: "When the
 court in Arnstein refers to 'copying' which is not itself an infringement, it must be
 suggesting copying merely of the work's idea, which is not protected by the copy-
 right." Kroffi, 562 F.2d at 1165.
   "   Krofft, 562 F.2d at 1164. However, the "ordinary reasonable person" must be
 a representative of the work's target audience if the work has a specialized market.
 For instance, if children are the target audience of a certain work, then only children
 could constitute an "ordinary reasonable person." Id. at 1166-67.
   54 See GOLDSTEIN, supra note 37, at § 7.2 n.6 ("The court might have avoided
 some of this confusion if it had retained the phrasing it had employed in an earlier
 draft of its opinion that, reportedly, used the term 'objective' in place of 'extrinsic'
 and 'subjective' in place of 'intrinsic'.").
      The Ninth Circuit has, in recent years, switched the phraseology of the test, as
 suggested by Professor Goldstein. The current Ninth Circuit version of the test was
 set out in Shaw v. Lindheim. 919 F.2d 1353 (9th Cir. 1990).
      In Shaw, the plaintiff had written a pilot script, called The Equalizer, for a
 television show. He delivered the script to Lindheim of NBC, but NBC decided not
 to produce the show. However, Lindheim read the script when Shaw delivered it.
 About three years later, Lindheim wrote a similar television series treatment, called
 The Equalizer, for Universal Television. In deciding whether Lindheim's treatment
 infringed upon Shaw's script, the court found that the extrinsic prong:
 152           UCLA ENTERTAINMENT LAW REVIEW                       [Vol 5:141
 Krofft test do not conflict with one another.55 In fact, Professor Gold-
 stein asserts that by examining all the cases together, it becomes read-
 ily apparent that they all follow the same two-part test to determine
 copyright infringement.56 Under both Arnstein and Kroff!, the plaintiff
 must initially show     that the defendant took protected expression.57
 Moreover, both tests allow      the use of experts to accomplish this.58
 Second, both the Arnstein and Krofft tests require the plaintiff to prove
 that audiences will perceive the defendant's work as substantially
 similar to the plaintiffs protected expression.59 Likewise, neither test
 allows the use of experts for this second prong.60
      Interestingly, both Arnstein and Kroffi jurisdictions61 also modify
  this second prong when examining children's works. Both types of
  jurisdictions use the "total concept and feel"62 approach to satisfy the
      includes virtually every element that may be considered concrete in a literary work,
      [and, therefore,] the extrinsic test as applied to books, scripts, and plays, and motion
      pictures can no longer be seen as a test for mere similarity of ideas. Because the
      criteria incorporated into the extrinsic test encompass all objective manifestations of
      creativity, the two tests are more sensibly described as objective and subjective
      analyses of expression, having strayed from Kroffl's division between expression
      and ideas.
 Id. at 1357.
       Professor Nimmer explains that the decision is best viewed as holding "that
 when, objectively speaking, a triable case of expressive similarity exists, the case
 must be sent to the trier of fact; but when no such objective argument is possible,
 summary judgment will lie." NIMMER, supra note 46, at § 13.03[E][3]. This sounds
 like the Arnstein test all over again.
    55 See GOLDSTEIN, supra note 37, at § 7.3; see also Sarah Brashears-Macatee,
 Note, Total Concept and Feel or Dissection?: Approaches to the Misappropriation
 Test of Substantial Similarity, 68 CHI.-KENT L. REv. 913, 916 (1993).
   56 See GOLDSTEIN, supra note 37, at § 7.3.
   57 Id.
   "   See Brashears-Macatee, supra note 55, at 917; Sharb, supra note 37, at 909.
   59 See GOLDSTEIN, supra note 37, at § 7.3; Sharb, supra note 37, at 910.
   '   See Brashears-Macatee, supra note 55, at 917-18; Sharb, supra note 37, at
   6" Arnstein was decided in the Second Circuit, and the Eleventh Circuit also fol-
 lows the Arstein test. Krofft was decided in the Ninth Circuit, and the Fourth Circuit
 also follows the Kroffi test. See supra notes 46-47.
   62 "Total concept and feel" is an inquiry used in the substantial similarity prong
 substantial similarity prong of the infringement inquiry. Therefore,
 the "total concept and feel" approach would undoubtedly be applied in
 the hypothetical case of Amy v. Andy.63
 C.     Total Concept and Feel: The Substantial Similarity Prong
     The phrase "total concept and feel" was coined and developed in
 Roth Greeting Cards v. United Card Company.64 In Roth, the plaintiff
 alleged that United Card Company illicitly copied a number of its
 greeting cards.65 For example, "a drawing of a colored moppet sup-
 pressing a smile" was on the outside of a Roth card, and the words "i
 wuv you" were on the inside.66 United marketed a card differing only
 in minor variations of color and style.67 The court ruled that United
 had copied Roth's card and that the evidence showed substantial
 similarity between United and Roth's cards:
     It appears to us that in total concept and feel the cards of United are the
     same as the copyrighted cards .... [T]he characters depicted in the art
     work, the mood they portrayed, the combination of art work conveying
 when testing for copyright violations. During this inquiry, the jury compares two
 works in their totality to determine whether the mood evoked by the two works is the
 same. Under this test "very abstract similarities between two works could support a
 claim of copyright infringement." Alfred C. Yen, A First Amendment Perspective on
 the Idea/Expression Dichotomy and Copyright in a Work's "Total Concept and
 Feel", 38 EMORY L.J. 393, 410 (1989). This "'totality' approach allows a fact-
 finder to respond to a visceral feeling that something unfair was done." Elliot M.
 Abramson, How Much Copying Under Copyright? Contradictions, Paradoxes, and
 Inconsistencies, 61 TEMPLE L. REV. 133, 147 (1988).
   63 " Total concept and feel" has been adopted by every Circuit that has addressed
 the issue. Sharb, supra note 37, at 915. These are the Second, Third, Fourth, Sev-
 enth, Eighth and Ninth Circuits. Id. at n.65. The Supreme Court has not yet consid-
 ered the question. Id.
   429 F.2d 1106, 1110 (9th Cir. 1970). See generally GORMAN & GINSBURG,
 supra note 14, at 131 & 416. But cf Smith v. Little, Brown, & Co., 245 F. Supp.
 451, 459 (S.D.N.Y. 1965), affd, 360 F.2d 928 (2d Cir. 1966) ("The concept and
 pattern which has been appropriated.., is the heart and core of plaintiffs work.")
 (emphasis added).
   65 Roth, 429 F.2d at 1106-08.
   67 Id.
     a particular mood with a particular message, and the arrangement of the
     words on the greeting card are substantially the same ....
 However, total concept and feel would have likely remained a forgot-
 ten, historical, jurisprudential footnote had it not been brought back to
 the forefront with Krofft in 1977.69 Since the concept's rebirth, both
 Kroffi and Arnstein jurisdictions have adopted the "total concept and
 feel" test to comprise the substantial similarity inquiry in a variety of
     Kroffi, even though it does not deal with literature per se, is in-
 structive in showing how "total concept and feel" applies to a work
 that targets children as its audience. In Krofft, the court held that the
 McDonald's McDonaldland commercials infringed on the H. R.
 Pufnstuf children's television series.71 The court held the works to be
 substantially similar because McDonald's commercials "captured the
 'total concept and feel' of the Pufnstuf show.",72 It was appropriate for
 the jury "to find that the over-all impact and effect indicate substantial
 appropriation,"73 because any one similarity viewed alone may seem
 trivial. The court also noted that the subtle differences between two
 similar characters would not be noticed by an "ordinary reasonable
 person, let alone a child.",74 Therefore, the totality of the borrowed
 concepts imbued the defendant's work with the same mood as the
 plaintiff's and allowed for a finding of infringement.
   68 Id Note that the phrase, "total concept and feel," appears to be self-defining,
 having never been formally defined in Roth or any case since. See discussion, supra
   69 See NIMMER, supra note 46, at § 13.03[A][1][c] (supporting that Krofft
 "breathed new life into the phrase" and that, otherwise, "the 'total concept and feel'
 rubric could have rested largely stagnant in a backwater of copyright law ....").
 However, one year before Krofft, the Second Circuit had used the phrase in the then-
 unheralded Reyher v. Children's Television Workshop. 533 F.2d 87, 92 (2d Cir.
   70 See GOLDSTEIN, supra note 37, at § 7.3.
   71 Sid & Marty Kroffi Television Prods. v. McDonald's Corp., 562 F.2d 1157
 (9th Cir. 1977).
   72 Kroffi, at 1167 (quoting Roth Greeting Cards v. United Card Co., 429 F.2d
 1106, 1110 (9th Cir. 1970)).
   71 Id at 1169 (quoting Malkin v. Dubinsky, 146 F. Supp. 111, 114 (S.D.N.Y.
   74 Id. at 1167.
     The Second Circuit is the only circuit that has dealt directly with
 children's literature. Prior to the introduction of "total concept and
 feel," the Second Circuit decided Smith v. Little, Brown & Co.75 In
 Smith, the plaintiff submitted five chapters and a plot outline of an
 adult novel to the defendant publishing company.76 Smith's story was
 based upon Grania O'Malley, a little-known Irish historical figure,
 who was the only female chieftain of a warlike pirate clan.77 The Lit-
 tle Brown publishing company rejected Smith's work, but later pub-
 lished a similar children's story on the same subject.78 The trial court
 noted that the several similarities were so strong as "to compel, the in-
 ference of copying."79 The Second Circuit concurred with the trial
     It is difficult to believe that two people, each sitting down to write a
     book about Grania O'Malley, entirely independent of each other, would
     each decide to begin the story on Grania's eighteenth birthday, would
     each recount that Grania went to watch for her father's return from sea,
     would each conceive the idea of a party upon her father's return, and
     would each provide a substantially similar account of that party. The
     difficulty of ascribing this to coincidence becomes insuperable when we
     add to this parallel the fact that in each book Grania's horse is named
     Maeve, in each book she is upbraided for clothing not befitting 'a
     woman grown,' and that in each book, on her way to watch for her fa-
     ther, she discusses or reflects upon Queen Elizabeth. Nor do I think it
     plausible that each author would independently invent the unusual mat-
     rimonial arrangement under which Grania agreed to spend half her time
                           ,          •          80
     with her husband's people and half with her own.
     Interestingly, the lower court based its decision, in part, on the fact
 that Little Brown had appropriated the plaintiffs "concept and pat-
 tern." In other words, the trial court ruled that the defendant had taken
   " 360 F.2d 928 (2d Cir. 1966).
   76 Smith v. Little, Brown & Co., 245 F. Supp. 451, 452 (S.D.N.Y. 1965). The
 appellate court's decision also sets forth the facts of the case, but the district court's
 decision provides greater detail.
   77 Id.
   71 Id at 453-54.
   79 Id. at 458.
   go Smith, 360 F.2d at 929 (quoting Smith, 245 F. Supp. at 458).
 156          UCLA ENTERTAINMENT LAW REVIEW                     [Vol 5:141
 "the heart and core of the plaintiffs work."81 This opinion appears to
 be almost prescient of the "total concept and feel" decisions to come.
     Later, in Reyher v. Children's Television Workshop,82 the Second
 Circuit court decided that the defendant's story, My Mother Is The
 Most Beautiful Woman In The World, did not infringe on the plain-
 tiffs story of a similar title.83 Although the two stories shared a com-
 mon theme, the court held that any similarity of events resulted from
 mere scenes a faire.84 Moreover, the court noted that the two stories
 demonstrate different ideals.85 Even though the theme of both stories
 centered upon the circumstance of a lost child trying to find his
 mother, Reyher's book focused on how looking at someone with love
 makes that person look beautiful.86 In contrast, the Children's Televi-
 sion Workshop's story demonstrated that what seems beautiful to
 some may not be beautiful to others.87 Most importantly, the court
 held that the two works had different "total feels."88 The plaintiff's
   81 Smith, 245 F. Supp at 459.
     The concept and pattern which has been appropriated is that of a young girl, rugged
     and uncouth, skilled in horsemanship and marksmanship, who becomes of age, who
     celebrates that event with revelry, and very shortly thereafter, by reason of her fa-
     ther's unexpected death, emerges, after a political struggle within the clan, as the
     chief and leader of her people.
   82 533 F.2d 87 (2d Cir. 1976), cert. denied, 429 U.S. 980 (1976) (borrowing the
 test from Roth Greeting Cards v. United Card Co., 429 F.2d 1106 (9th Cir. 1970)).
   83 Id at 92-93.
   84 " [S]cenes a faire" are "trite, stock scenes or treatments of facts and ideas."
 GORMAN & GINSBURG, supra note 14, at 426. Black's Law Dictionary defines
 "scenes a faire" as:
     A copyright law doctrine referring to incidents, characters or settings which are as a
     practical matter indispensable, or at least standard, in the treatment of a given
     topic.... Such material, in an otherwise copyrightable work, is considered unpro-
     tected by copyright because it would be natural for it to appear in works dealing
     with similar subjects or situations.
 BLACK'S LAW DICTIONARY 1344 (6th ed. 1990).
   85 Reyher v. Children's Television Workshop. 533 F.2d 87, 92 (2d Cir. 1976).
   86 Id.
   87 id
   8 Id
 story contained some specific character development against the rich
 backdrop of the Ukraine, while the defendant's story did not develop
 the characters nor provide any meaningful information about the set-
     The Reyher court began its opinion by stating that protection is
 granted "only to the particular expression of an idea and never to the
 idea itself'90 and then described the well-known difficulty of deter-
 mining the exact point where one has gone beyond the idea and into
 expression.91 In attempting to make this determination, the court re-
 counted past jurisprudence, showing that stealing a general theme is
 not the essence of infringement. Rather infringement lies in the
 theme's "particular expression through similarities of treatment, de-
 tails, scenes, events and characterization."92 The court concluded that
 children's stories, necessarily lacking in complexity, should be ana-
 lyzed according to their "total concept and feel."93
        Most recently, the Second Circuit considered the test in Wil-
 liams v. Crichton.94 In Crichton, the plaintiff had written four chil-
 dren's books about a dinosaur amusement park. He claimed that Mi-
 chael Crichton's adult book, Jurassic Park, and Universal Studios'
 movie of the same title were substantially similar to two of his own
 books, each thirty pages in length.95 All of the works shared "a setting
 of a dinosaur zoo or adventure park, with electrified fences, automated
 tours, dinosaur nurseries, and uniformed workers.... ,96 Both works
   89 Id
   90 Id. at 90.
   9' Id. at 91 (quoting Peter Pan Fabrics, Inc. v. Martin Weiner Corp., 274 F.2d
 487, 489 (2d Cir. 1960) ("Obviously, no principle can be stated as to when an imi-
 tator has gone beyond copying the 'idea,' and has borrowed its 'expression.' Deci-
 sions must therefore inevitably be ad hoc.") (Judge L. Hand)).
   92 Id
   93 Id.
   94 84 F.3d 581 (2d Cir. 1996); see generally Telephone Interview with Guy Hal-
 perin, Attorney for Williams (Feb. 26, 1997); "Jurassic Park" Did Not Infringe
 Protectable Expression of Kids' Books, PAT., TRADEMARK & COPYRIGHT J., June 6,
 1996, at 174; 2nd Circuit Affirms Jurassic Park Not Similar to Book Series, INTELL.
 PROP. LITIG. REP., July 24, 1996, at 13; Torrey, supra note 11, at F07.
   95 Crichton, 84 F.3d at 581.
   9 Id. at 589. The court said "these settings are classic scenes afaire that flow
 from the uncopyrightable concept of a dinosaur zoo." Id
 158          UCLA ENTERTAINMENT LAW REVIEW                     [Vol 5:141
 featured a brother and sister pair as the main characters, and charac-
 terized the brother as a 'mini-expert' on dinosaurs.97 Both stories had
 similar plots and sequence of events98 including:
     encounters   with  small   dinosaurs ... encounters with   brachio-
     saurs ... visits to dinosaur nurseries... tours with automated vehicles
     and recorded guides... stranded characters encountering ferocious di-
     nosaurs... characters in boats being pursued by dinosaurs.., dinosaurs
     escaping from paddock fences ... and characters escaping pack-hunting
     dinosaurs through the intervention of another dinosaur and a helicopter
     Nevertheless, the court found no substantial similarity, largely be-
 cause the works effected different "total concepts and feels."'00 The
 court wrote, "Consideration of the total concept and feel of a work,
 rather than specific inquiry into plot and character development, is es-
 pecially appropriate in an infringement action involving children's
 works, because children's works are often less complex than those
 aimed at an adult audience."''l Finally, the court emphasized that the
 "Jurassic Park works are high-tech horror stories with villainous char-
 acters and gruesome bloodshed," but Williams' books "are adventure
 stories and, although suspenseful in places, have happy endings."'102
   " Id The court observed that Williams' characters were too undeveloped to be
 copyrightable and "that is the penalty an author must bear for marking [characters]
 too indistinctly." Id (quoting Nichols v. Universal Pictures Corp., 45 F.2d 119, 121
 (2d Cir. 1930)).
   9" The sequence of events shows how the plot of a story logically builds from
 each incident to the next. Author Lois Duncan observes that "the big event usually
 happens in the fifth chapter. Before that, small events are building up to it. After
 that, [the author is] trying to resolve it." LITOWINSKY, supra note 7, at 58. Finding
 that a work has the same exact sequence of events as another work would provide
 some evidence of substantial similarity.
   99 Crichton, 84 F.3d at 590 n.3. The Crichton court considered "such lists [to
 be] 'inherently subjective and unreliable,' particularly where 'the list emphasizes
 random similarities scattered throughout the works."' Id. at 590 (quoting Litchfield
 v. Spielberg, 736 F.2d 1352, 1356 (9th Cir. 1984)).
   '0o Id at 589.
   Wi Id (citing Reyher, 533 F.2d at 91).
   102 Id. Particularly troubling in this case is the fact that the court decided the
 case on a summary judgement motion, substituting its own judgement in place of the
 layman's on the substantial similarity inquiry. See Telephone Interview with Guy
 Halperin, supra note 94. Copyright has been said to allow the dwarf to stand on the
 D.     The Hypothetical: Amy v. Andy
     Given the above case law, it appears that Amy has a very favorable
 case against Andy,103 provided that Andy has not only appropriated
 the plot and characters of Amy's Fritz and the Blind Man, but also
 captured the story's "total concept and feel." The Crichton case, while
 perhaps not beneficial for Amy,1°4 may not damage her case because it
 dealt with the plaintiffs children's books being transformed into an
 adult novel. However, both Reyher and Kroff! seem to indicate that as
 long as both the plaintiffs and the defendant's works target children,
 the burden of demonstrating that the works share the same "total con-
 cept and feel" is lighter.105
     In the hypothetical case of Amy v. Andy, the genre is not just chil-
 dren's books, but the specific subcategory of picture books.' 0 With as
 few as two hundred words,'07 picture books offer, perhaps, the strong-
 est case for the application of "total concept and feel." Connie Ep-
 stein, an author and expert on children's books, observes that "the text
 of a picture book is a highly specialized form of fiction, more like po-
 shoulders of the giant, but this seems to be a case of the giant standing on the shoul-
 ders of the dwarf.
    '03 It is assumed that Amy has now registered with the Copyright Office, which
 is a prerequisite for filing suit, and that she is able to show copying, step one of the
 infringement test. See discussion supra part I.
    '04 Plaintiff Williams argued that authors of adult book would merely point to the
 greater complexity of their works to show that their works do not infringe on chil-
 dren's books, essentially stripping children's books of copyright protection. Crich-
 ton, 84 F.3d at 590. Simply by embellishing and adding scenes, characters and plots,
 a copier can render his adult work adequately dissimilar from the children's work.
 See Telephone Interview with Guy Halperin, supra note 94.
   "' See discussion supra part II.D; but cf Aliotti v. R. Dakin & Co., 831 F.2d 898
 (9th Cir. 1987) (rejecting, on the basis of the merger doctrine, the plaintiffs claim
 that the defendant's stuffed dinosaurs infringed on her stuffed dinosaurs).
   "06 Courts seem to only recognize works that are targeted at "children" as a sin-
 gle classification. However, several sub-categories exist including picture books,
 young readers, middle readers, and young adult novels. See 1997 WRITER'S &
 ILLUSTRATOR'S MARKET, supra note 3, at 341-42; AMoss & SUBEN, supra note 7, at
   107 See Berridge, supra note 3, at 59.
 160            UCLA ENTERTAINMENT LAW REVIEW                       [Vol 5:141
 etry than storytelling in its tightness and rhythmic control."''0S      The
 plot of the picture book must be told in few words and without large
 complications.1°9 The characters and setting are introduced with little
 or no description.' 10 The sequence of events must tell the "story in the
 simplest way possible, at the same time creating the greatest amount
 of interest and tension in the reader before the problem is finally
      Without, "total concept and feel," Amy's Fritzi and the Blind Man
    108 EPSTEIN, supra note 2, at 81. In "structure, theme, and style, picture book
  writing has singular characteristics that set it apart from other categories." Id. at 82.
      Obviously, [the] text must be short like a poem to accommodate a very young
      child's short attention span. Each word of a poem or picture book is important to
      express as clearly and as richly as possible [the] idea. That limitation forces [the
      author] to choose words carefully and to eliminate ruthlessly words that are unnec-
      essary. Again, like a poem, there should be only one simple idea, and every word
      must contribute to expressing that idea to make it comprehensible at a young child's
      level of experience.
  AMMOs & SUBEN, supra note 7, at 45-46.
  48-51 (1994). Other authors discuss the uniqueness of plot development in chil-
  dren's literature in general. See AMOSS & SUBEN, supra note 7, at 32-33; EPSTEIN,
  supra note 2, at 66-79; LITOWINSKY, supra note 7, at 51.
    ... See KARL, supra note 109, at 51-55.
      One of the reasons that writing a picture book text is so difficult is that there is no
      room for long descriptions. But be assured that if you have come to understand your
      characters well . . . . The simple telling of your story will be all that the reader
      needs to know about who and what they are.
 Id. at 53. Other authors discuss the uniqueness of character development in chil-
 dren's literature in general. See AMOSS & SUBEN, supra note 7, at 31-32; EPSTEIN,
 supra note 2, at 53-65; LITOWINSKY, supra note 7, at 46-55. "[I]n a picture book,
 there is little room in the text for description .... Surprisingly, setting can display
 itself just as character does, through plot and action." KARL, supra note 109, at 54.
 Other authors discuss the uniqueness of setting in children's literature in general.
 See AMOSS & SUBEN, supra note 7, at 29-30; EPSTEIN, supra note 2, at 27-39;
 LITOWINSKY, supra note 7, at 55-56.
    ... KARL, supra note 109, at 57. The pattern must be "spare, but at the same
 time tell the reader as much as necessary to understand the story." Id Other authors
 discuss the sequence of event in children's literature in general. See LITOwINSKY,
 supra note 7, at 59.
 may be construed as little more than a compilation of unprotected
 ideas" 12 and Andy's Franz and the Button may be viewed as the sort of
 entrepreneurial borrowing of ideas that is encouraged by copyright
 policy. 113 Yet as seen above, writing a children's book is very differ-
 ent than a putting together "mechanical or routine" compilation of
 ideas."14 Writing a children's book is an art,"15 and one that merits
 copyright protection.116 Without "total concept and feel," Amy has
 very little chance of getting that protection.
     Despite the judicial trend toward application of "total concept and
  feel" to children's books, several noted copyright scholars question the
  wisdom of using the "total concept and feel" test in that context.117
    12 See supra note 22 and accompanying text.
    13 See Feist Publications, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 350 (1991)
  (Copyright law "encourages others to build freely upon the ideas and information
  conveyed by another's work."). Andy will argue:
      [The notion] that every new work is in some sense based on the works that precede
      it is such a truism that it has long been cliche, invoked but not examined.... [Tihe
      very act of authorship in any medium is more akin to translation and recombination
      than it is to creating Aphrodite from the foam of the sea .... [Riecombining what
      is already "out there" in some form... is the essence of authorship.
 Jessica Litman, The Public Domain, 39 EMORY L.J. 965, 966-67 (1990).
    "4 Feist, 499 U.S. at 362. "[O]riginality is not a stringent standard; it does not
 require that fact be presented in an innovative or surprising way .... The standard
 of originality is low, but it does exist." Id
    "I5 See AMOSs & SUBEN, supra note 7, at 45 ("[lIt may help you to think of this
 genre as similar to poetry."); EPSTEIN, supra note 2, at 81 (asserting that a picture
 book's text is "more like poetry" than prose). See also supra notes 106-11 and ac-
 companying text.
    116 For example, suppose that someone wrote a book, entitled Blue Eggs and
 Spam. If Blue Eggs and Spain began "That Pam-I-am!/That Pam-l-am/I do not
 like/that Pam-I-am/Do you like blue eggs and spam," most people would recognize
 it immediately as a "copy" of Theodor S. Geisel's (Dr. Suess) Green Eggs and
 Ham. See DR. SUESS, GREEN EGGS AND HAM (1960). Assume that Blue Eggs and
 Spam roughly tracked Green Eggs and Ham all the way to the end. Theodor S.
 Geisel was a master at crafting a tale with simple, easy-to-read words and little ac-
 tual plot, but without "total concept and feel," the plagiarist may successfully argue
 that he merely borrowed the idea of the book.
   " See GOLDSTEIN, supra note 37, at § 7 (asserting that the total concept and feel
 test often results in the misapplication of the infringement test); NIMMER, supra note
 46, at § 13.03[A][c]; Yen, supra note 62.
 162          UCLA ENTERTAINMENT LAW REVIEW                     [Vol 5:141
 Professor Nimmer claims that the "total concept and feel" test "threat-
 ens to subvert the very essence of copyright." 118 He writes:
     "Concepts" are statutorily ineligible for copyright protection; for courts
     to advert to a work's "total concept" as the essence of its protectible
     character seems ill-advised in the extreme. Further, the addition of
     "feel" to the judicial inquiry, being a wholly amorphous referent,
     merely invites abdication of analysis. In addition, "total concept and
     feel" should not be viewed as sine qua non for infringement- similar-
     ity that is otherwise actionable cannot be rendered defensible simply
     because of a different "concept and feel." 119
 Professor Nimmer's statement supports the obvious propositions that
 plagiarism does not necessarily constitute a copyright violation,120 and
 that a valid test for infringement must possess a degree of objectivity
 to work logically.'21
     But consider the basic policy behind copyright. The purpose of
 copyright protection is to "foster the creation and dissemination of in-
 tellectual work for the public welfare."'122 This dissemination of works
 will only occur when authors' creations are protected from being pil-
    11s NIMMER, supra note 46, at § 13.03[A][c]. However, Professor Nimmer
 grudgingly admits, "[i]t may, conceivably, make sense to refer to the 'total concept
 and feel' of a greeting card or game or anthropomorphic fantasy world." Id.
    119 Id.
    120 To plagiarize is "[t]o steal and use (the ideas or writings of another) as one's
 own." THE AMERICAN HERITAGE DICTIONARY 946 (2d College Ed. 1982) (empha-
 sis added). See Laurie Steams, Comment, Copy Wrong: Plagiarism, Process, Prop-
 erty, and the Law, 80 CAL. L. REv. 513 (1992) (" [L]aw and plagiarism intersect
 only imperfectly... though an instance of plagiarism might seem to be the quintes-
 sential act of wrongful copying, it does not necessarily constitute a violation of
 copyright law.").
   121 See NIMMER, supra note 46, at § 13.03[A][c] (insisting that the use of the
 "total concept and feel" standard "does little to bring order to the inquiry into what
 constitutes substantial similarity, and would be better abandoned.").
 U.S. COPYRIGHT LAW C.2.a. (1961), reprinted in GORMAN & GINSBURG, supra note
 14, at 13-16. See also U.S. CONST. art. I, § 8, cl. 8 (declaring that the purpose of
 copyright is to "to promote... the useful arts"); L. RAY PATTERSON & STANLEY W.
 LINDBERG, THE NATURE OF COPYRIGHT 158 (1991) (stating that "[a] basic function
 of copyright is to protect copyright owners against piracy by competitors" and
 thereby foster the incentive to create works for the public).
 fered and sold.123 In assuring the author the profit of his labor, the
 author will have incentive to create new works. If authors can expect
 no reasonable protection for their work, few will have adequate impe-
 tus to create. Few authors can afford to write purely for the love of
 writing. Therefore, if children's stories are allowed to be pirated
 without the worry of copyright infringement prosecution, the market
 for these works could well be destroyed, frustrating copyright's very
 purpose. 124
     The "total concept and feel" approach protects the children's book
 market. The approach simply represents the recognition that chil-
 dren's literature is a unique genre, I requiring a different test to afford
 it with adequate protection. Indeed, "total concept and feel" is not the
 "wholly amorphous referent"'126 that Nimmer claims. The objectivity
 is inherent in the first prong of the infringement test, which determines
 if copying occurred.127 Only in the second prong is the subjectivity of
 "total concept and feel" introduced.128 Moreover, this prong, even
 without "total concept and feel," is subjective by its very nature.129
     Historically, this recognition has already been given to other gen-
 res. Judge Hand said that the main substance of a play is the charac-
 ters and sequence of incident.130 He thought that plays "may often be
 most effectively pirated by leaving out the speech, for which a substi-
 tute can be found which keeps the whole dramatic meaning." 131
   123 See Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417, 429
 (1984) (holding that copyright "is intended to motivate the creative activity of
 authors and inventors by the provision of a special reward.").
   124 See GOLDSTEIN, supra note 37, at 4 (" Drawing the line of copyright too short
 will fail to give the author his due ... .
   125 See discussion supra part III.D.
   126 NIMMER, supra note 46, at § 13.03[A][c].
   "27 See discussion supra part III.B.
   128 Id. Furthermore, "total concept and feel" is only one of the elements consid-
 ered. Courts using "total concept and feel" also examine character development,
 sequence of events, and plot. See, e.g., Williams v. Crichton, 84 F.3d 581, 589-90
   129 See discussion supra part III.B.
   130 Nichols v. Universal Pictures Corp., 45 F.2d 119, 121 (2d Cir. 1930), cert.
 denied, 282 U.S. 902 (1931).
   '3 Sheldon v. Metro-Goldwyn Pictures Corp., 81 F.2d 49, 56 (2d Cir. 1936),
 cert. denied, 298 U.S. 669 (1936), 106 F.2d 45 (2d. Cir. 1939), aft'd, 309 U.S. 390
 164           UCLA ENTERTAINMENT LAW REVIEW                     [Vol 5:141
 Likewise, Goldstein observed that in plays "literary style is less im-
 portant, [so] courts look for protectible expression in the elaboration of
 theme, plot and incident."'32 These are not necessarily easier stan-
 dards, just different ones uniquely tailored to different genres of ex-
 pression. 133 In the same way, "total concept and feel" gives children's
 literature the unique protection it needs as a unique genre. 134
      Even with "total concept and feel," plaintiffs are not winning cases
  in record numbers. In fact, of reported infringement cases involving
  more complex "adult" stories or novels, defendants win the vast ma-
  jority of the time.135 Even if the plaintiff author can clearly list the
  similarities, like in Crichton, courts are still quite hesitant to find in-
  fringement.136 Even when the defendant admits copying, substantial
  similarity can be very difficult to prove.137 Children's literature, with
  its intentional low level of complexity and spare usage of words, is
    "3I See GOLDSTEIN, supra note 37, at §
    133 Id.
    114 See discussion supra part III.C.
    131 See GOLDSTEIN, supra note 37, at § This survey not only includes all
 jurisdictions, but also appears to include all the "total concept and feel" cases.
    '36 See also Lane v. Universal City Studios, Inc., 1994 U.S. App. LEXIS 23769
 (9th Cir. Aug. 29, 1994). Plaintiff Lane alleged that Universal copied her screen-
 play, "Where Have All the Soldiers Gone I," and used it for a "Kojak" episode.
 Lane listed 27 similarities between the two works to demonstrate the significance of
 the copying. Id The court responded that these were "general plot ideas, ordinary
 phrases, or stock scenes .... [T]he list is a compilation of 'random similarities
 scattered throughout the works,' and therefore has limited value in determining sub-
 stantial similarity." Id. (quoting Kouf v. Walt Disney Pictures & Television, 16
 F.3d 1042, 1045-46 (9th Cir. 1994) (quoting Litchfield v. Spielberg, 736 F.2d 1352,
 1356 (9th Cir. 1984) cert. denied, 470 U.S. 1052 (1985))); Towler v. Sayles, 76 F.3d
 579, 584 (4th Cir. 1996) (holding that an expert's "extensive array" of similarities is
 an inherently unreliable list).
    117 See, e.g., Arden v. Columbia Pictures, 908 F. Supp. 1248 (S.D.N.Y. 1995).
 See generally 18 ENT. L.J. 4 (1996); "Groundhog Day" Movie Did Not Infringe
 Novel's Protectable Expression, PAT., TRADEMARK & COPYRIGHT J., Jan. 25, 1996,
 at 418. Columbia Pictures admitted to copying the idea for the movie, "Groundhog
 Day" from Arden's novel, "One Fine Day." Arden, 908 F. Supp. at 1248. But de-
 spite a number of similarities, the court refused to find an infringement because the
 plot, mood, characters, pace, setting and sequence were too different. Id
 obviously more vulnerable than this "adult" fare. 138
     The "total concept and feel" test appears to be an appropriate mid-
 dle ground, providing the necessary heightened protection to chil-
 dren's literature, while preserving sufficient ties to the core doctrinal
 copyright tests.139 In fact, despite Professor Nimmer's protestations,
 the test does not seem too far afield from answering the threshold
 question of how similar is too similar under either the traditional Arn-
 stein or Kroffl tests.140 Under the traditional test, the jury uses no for-
 mula and is not forced to articulate the exact point at which the defen-
 dant went too far. The jury simply judges.14'      Professor Goldstein
 agrees by asserting that "[u]ltimately these cases require a court to
 make a value judgement."'142 This is an area that calls for judgement
    138 See Berridge, supra note 3, at 59.
    139 Some commentators have suggested that a different test altogether should be
 used for children's literature, like the diminished value test: "To constitute an inva-
 sion of copyright it is not necessary that the whole of a work should be copied.., if
 so much is taken that the value of the original is sensibly diminished.., that is suffi-
 cient to constitute infringement." Sid & Marty Krofft Productions, Inc. v. McDon-
 ald's Corp., 562 F.2d 1157, 1169 n.13 (quoting Universal Pictures Co., Inc. v. Har-
 old Lloyd Corp., 162 F.2d 354, 361 (9th Cir. 1947)). Furthermore, the Krofft court
 did not think that this was a true test of infringement, but should be considered an
 indication thereof. Id. However, this loss of value clearly does not show copyright
 infringement. Besides smacking of the 'sweat of the brow' doctrine overturned in
 Feist, the loss of value only goes toward showing damages after an infringement has
 been found. Feist Publications, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340 (1991). In
 short, the diminished value test does not address the central issue, but side-steps it in
 favor of administrative ease.
    40 See BOORSTYN, supra note 47, at § 10:14 ("This is without doubt the most
 vexed question in the law of copyright and the tests for determining that crux issue
 are 'of necessity vague."' (quoting Peter Pan Fabrics, Inc. v. Martin Weiner Corp.,
 274 F.2d 487 (2d Cir. 1960)).
   141 Justice Story observed that copyright and patent cases are "nearer than any
 other class of case belonging to forensic discussions, to what may be called the
 metaphysics of the law where the distinctions are, or least may be, very subtle and
 refined, and, sometimes, almost evanescent." Folsom v. Marsh, 9 F.Cas. 342, 344
 (C.C.D. Mass. 1841) (No. 4901).
   142 GOLDSTEIN, supra note 37, at § 7. In Professor Peter Jaszi's extensive writ-
 ings on the nature of authorship, he observes that "[t]he problem, of course, is that
 in its purest form.143 After all, somewhere along the continuum of no
 similarity at all to verbatim copying, "lies an infinite variety of factual
 situations that must be determined on an ad hoc basis."'144
     "Total concept and feel" requires this sort of decision-making.
 Ultimately, a jury must take two works' juxtaposed expressions and
 decide whether the works are similar to the point of one work infring-
 ing upon the creativity of the other. Total concept and feel is merely
 the unique tool that allows that determination to be made in the con-
 text of children's literature.
 that idea/expression line have proved difficult or impossible to draw in practice."
 Peter Jaszi, Toward a Theory of Copyright: The Metamorphoses of "Authorship"
 455,465 (1991). Logically, then, judging these cases requires a value judgement, an
 "I know it when I see it" type of decision.
   143 See Abramson, supra note 62, at 147 (agreeing that total concept and feel
 "allows a fact-finder to respond to a visceral feeling that something unfair was
 done"); GOLDSTEIN, supra note 37, at § 7 (" the inquiry is inescapably contextual");
 Sharb, supra note 37, at 904 (asserting that infringement cases are primarily ad hoc,
 "I know it when I see it" determinations);.
      A partial solution to the confusion regarding where to draw the line may lie in
 Roth itself. The cards in the case were compilations, the elements of which were not
 copyrightable by themselves. See GORMAN & GINSBURG, supra note 14, at 131.
 The court, while announcing the "total concept and feel" test, twice noted that the
 cards' resemblance to one another was "remarkable" even to the casual observer.
 Roth Greeting Cards v. United Card Co., 429 F.2d 1106, 1110 (9th Cir. 1970) (em-
 phasis added).
   '44 Roth, 429 F.2d at 1110.

Volume 05, Issue 1, pp 1-70, Torpoco

 Mickey and the Mouse: The Motion
 Picture and Television Industry's
 Copyright Concerns on the Internet*
 Mark S. Torpoco
    In early 1996, international chess champion Garry Kasparov
 played a six game match with an IBM computer, named Deep Blue,
 specifically designed to play chess and programmed with the knowl-
 edge of every known chess move, game, and strategy.' Kasparov's
 hard-won victory was hailed as a victory for human ingenuity over ar-
 tificial intelligence,2 but the match itself was important for another
 reason: it highlighted the potential commercial value of the Internet as
 an entertainment medium.
    IBM, which sponsored the match, created an Internet site that al-
 lowed chess enthusiasts to follow the match move by move and to read
 on-the-scene expert commentary.' IBM was expecting 200,000 people
 to drop by, but over 6 million people signed on to view the action as it
 transpired.4 These are Nielsen-size numbers larger than those of many
 TV shows, and if IBM could have charged admission to view its Inter-
   . An earlier version of this paper won First Place in the 1996 Nathan Burkan
 Competition at Harvard Law School. This paper is printed with the permission of
 ASCAP, and with thanks to Edward Torpoco, Leslie Diaz, David Handelman and
 Joseph F. Troy for their help and encouragement.
   Dave Anderson, A Chess King Bails Out the Big Four, N.Y. TIMES, Feb. 21,
 1996, at B 11.
   2 Id
   ' Steven Levy, How to Cast a Wider Net, TIME, Mar. 4, 1996, at 48.
   4 Anderson, supra note 1.
 net site through some form of digital cash, at least half of the tourna-
 ment price of a half-million dollars would have been raised.5
     It has been said that it is impossible for a content provider to make
  money on the Internet.6 But the Kasparov v. Deep Blue match showed
  that there is a market for Internet based entertainment, and with the
  continual development and refinement of Internet technologies and
  digital cash collection systems, the entertainment industry's ability to
  deliver product to consumers is sure to grow. In fact, the entertain-
  ment industry is already deeply involved in the Internet and has used
  the medium to advertise movies, television programs, and music re-
  leases for quite some time. As the suppliers of both advertising and
  entertainment product, the entertainment industry will have a large
  stake in protecting the intellectual property which it creates for the
     This paper will examine the copyright concerns of the motion pic-
 ture and television companies, studios, content developers, producers,
 etc. (collectively, the "Motion Picture and Television Industry") with
 respect to advertising and content they have developed for the Internet.
 It will illustrate that the Motion Picture and Television Industry has a
 growing financial interest in the Internet, and that this interest will
 continue to expand as the Industry shifts from being a mere Internet
 advertiser to a provider of content-for-sale. This growing interest will
 lead to the placing of tremendous amounts of intellectual property on
 the Internet, property which is inadequately protected given the ease of
   5 Levy, supra note 3, at 48. The author notes, however, that the IBM site was suc-
 cessful because the "site's design was appropriate for the medium." Id Television,
 for example, is a poor conduit for viewing the chess match due the time intervals be-
 tween moves, but the Internet allowed for such things as viewer involvement, such as
 the ability to click a button and instantly receive pictures of the board layout at an ear-
 lier part of the match. Id.
   6 David Clark, Lecture to the class Law, Internet, and Society at Harvard Law
 School (Feb. 5, 1996). Clark has argued that it is impossible for anyone to charge ad-
 mission for access to an Internet site as: 1) without stronger intellectual property pro-
 tections, a content provider seeking to charge for access will be instantly undercut by
 another provider putting up the same information for free, and 2) there is no viable
 mechanism by which to collect such admission charges-it is unlikely that anyone
 would be willing to pay as much as $10 for access to an Internet site, but without a $10
 minimum charge, the expense of the transaction cannot justify the use of a credit card
 [Vol 5:1
 downloading material from and copying on the Internet and given the
 current ambiguities in copyright law. In order to adequately protect
 both the Industry's existing intellectual property assets and property
 created specifically for the Internet either now or in the future, this pa-
 per advocates an aggressive campaign of lobbying, targeted litigation,
 public education, and technology development. Central to this cam-
 paign are the ratification and implementation of the World Intellectual
 Property Organization (" WIPO") copyright treaties, approved in De-
 cember 1996 by the WIPO Geneva conference, a program of copyright
 enforcement, and the development of copyright management protec-
 tion systems.
     In the mid-i 960s, at the height of the cold war and in the wake of
 the Cuban Missile Crisis, the Department of Defense faced what then
 seemed to be a less-than-theoretical question: How could orders be is-
 sued to the armed forces if the U.S., as well as the major telephone,
 radio, and television hubs, were devastated by a nuclear assault?7 The
 answer was to develop a computer network that had no hub, no central
 operating authority, no central switching station, and that could con-
 tinue to operate even if most of the phone lines were in tatters.8
     In 1964, Paul Baran, a researcher at the Rand Corp., designed a
 computer-communications network that had no central or primary
 computer, which assumed that the links connecting any computer to
 any other computer were totally unreliable.9 The Department of De-
 fense implemented Paul Baran's concept in 1969 when it linked four
 computers together in a network known as the ARPAnet.'° The AR-
      Philip Elmer-Dewitt, First Nation in Cyberspace, TIME, Dec. 6, 1993, at 62.
   8 Id
   9 Id. "In Baran's scheme, each message was cut into tiny strips and stuffed into
 electronic envelopes, called packets, each marked with the address of the sender and
 the intended receiver. The packets were then released like so much confetti into the
 web of interconnected computers, where they were tossed back and forth over high-
 speed wires in the general direction of their destination and reassembled when they fi-
 nally got there. If any packets were missing or mangled... it was no big deal; they
 were simply resent." Id
 1995). What made the ARPAnet workable was that the four computers used the same
 Fall 1997]
 PAnet itself continued to grow as other computers were added to the
 network. At the same time other networks, detached from ARPAnet,
 also began to appear."
     In the mid-1980s, the National Science Foundation, which decided
 to build its own network (the NSFnet), "built the high-speed, long-
 distance data lines that form the Internet's U.S. backbone." 2 Eventu-
 ally,   "all   publicly   and   private   funded    networks.., joined
 the... NSFnet," and the modem NSFnet, now termed the Internet,
 was born.3 Though the National Science Foundation created large
 parts of the Internet's infrastructure, it in no way runs or controls the
 Internet.4 The Internet is thus "a network of networks"- a connec-
 tion of computers throughout the world, all accessible to each other,
 by use of the same communication protocols.5
     A variety of functions can be performed on the Internet. These in-
 clude: Talk,"6 Chat,"7 File Transfer Protocol (FTP)'8 and Telnet.'9 By
 set of protocols. A protocol is agreed-upon method of communication used by com-
 puters. The protocol handles such decisions as which computer should begin the
 communication, how replies are to be handled, how data will be represented, and how
 errors will be corrected. ARPAnet and the Internet use a collection of protocols called
 Transmission Control Protocol/Internet Protocol (TCP/IP). RICHARD J SMITH, MARK
       SMITH, GIBBS, & MCFEDRIES, supra note 10, at 7.
   12 Elmer-Dewitt, supra note 7.
   '3 SMITH,GIBBS& MCFEDRIES, supra note 10.
   '4 Elmer-Dewitt, supra note 8. The author notes that the NSF has cut back gradu-
 ally on its funding and that all government support of the Internet is soon expected to
 be terminated. "The major costs of running the network are [now] shared in a coop-
 erative arrangement by its primary users: universities, national labs, high-tech corpora-
 tions and foreign governments." Id
   "s Katie Hafner, Making Sense of the Internet, NEWSWEEK, Oct. 24, 1994, at 46.
   16 A real-time typed dialogue between two individuals on the Internet. SMITH,
 GIBBS, & MCFEDRIES, supra note 10, at 12.
   '" A real-time typed dialogue between a variety of people on the Internet akin to a
 party line. Id.
   "S FTP allows the user to access another computer and download or upload a file.
 Through FTP, a user can access a variety of files, such as research papers, video
 games, Web browsers, and other software. Id at 182.
   '" Telnet allows a user to log into a remote machine. No downloading of programs
 or data onto the user's machine occurs-the functions are run entirely on the remote
 [Vol 5:1
 Fall 1997]      INTERNET COPYRIGHT PROTECTION                         5
 far the most widely used resource on the Internet, however, is elec-
 tronic mail (e-mail).20 E-mail most commonly involves the sending of
 typed messages by electronic transmission across the Internet from one
 user to the "mail box" of another user, from which that second user
 can later pull up and read the electronic letter.2'
     Another function, similar to e-mail, is Usenet, which contains
 many news groups. Usenet involves the posting by electronic trans-
 mission across the Internet of typed messages onto a public comput-
 erized bulletin board accessible (and thereby readable) by many Inter-
 net users, instead of a user's private mailbox.22
     Yet, one function has become the standard method for navigating
 the Internet: the World Wide Web.23 The Web is essentially a collec-
 tion of" sites" located on computers throughout the world.24 One ac-
 cesses a site on the Web by typing the site's alphabetic address.2
 computer. Id at 12.
   20 Hafner, supra note 15. Millions of users are currently relying on the Internet for
 electronic mail. Louise Kehoe, Trapped in the Web Traffic Jam, THE FINANCIAL
 TIMES LTD., Oct. 16, 1996, at 22.
   21 SMITH, GIBBS, & MCFEDRIES, supra note 19, at 13. E-mail is not limited to
 plain text-only transmissions but can also be used to transmit pictures, software, audio
 files or even video. Id
   22 Id at 116. As with e-mail, Usenet can be used to transmit pictures, audio files,
 and video. Id
   23 Id at 264-267 (showing "in 1993, traffic on the World Wide Web increased by
 443,931 percent"). In just a couple of years, volume on the World Wide Web has
 reached 38 million visits to sites per day. Judy Brown, Could Fantastic Growth Strain
 the Internet?, MILWAUKEE JOURNAL SENTINEL, Nov. 4, 1996, at 13. According to a
 study by International Data Corporation, the number of Web users will increase from
 8.3 million users in 1996 to 1.2 billion by the year 1999. Internet Access, EDGE:
   24 William F. Allman, A Gentleman's Guide to the Internet, FORBES, Sept. 25,
 1995, at 133.
   25 A Web address is called a Uniform Resource Locator (URL). The URL for
 Web sites generally takes the form of the phrase "http:" (which stands for Hypertext
 Transport Protocol and is the protocol used by the Web to transfer Web documents)
 followed by the name of the host computer such as "www.harvard.edu" (also known
 as the domain name) followed by the directories and filename of the site sought. A full
 site name might thus read: "http://www.harvard.edu/courses/spanish.html." By typing
 in this site name, the user is transported to a web page containing the Spanish courses
 This, in turn, will pull up a Web page located at the site. A Web page
 is often a collection of both text and graphics. The page will also have
 certain highlighted keywords within the text which are "hyperlinks"
 to other Web pages.26 When the user clicks the mouse onto the high-
 lighted word, the link takes effect and the other related Web page (a
 Web page sometimes on the same computer but sometimes at another
 computer anywhere in the world) is automatically displayed on the
 user's terminal.27
     This system of leaping from Web page to Web page (called hy-
 pertext) is what makes the Web such a powerful interactive tool.2
 Yet, the Web's interactivity is not solely limited to the ability to link
 pages. It also comes from the fact that sophisticated Web pages can
 allow the user to enter text, fill in forms, run computer programs, play
 sounds, or even launch other Internet functions like FTP or e-mail (es-
 sentially: actively participate on the page).29 Because of this interac-
 tivity, the Web has become the linchpin of the Internet, and the pri-
 mary vehicle through which entertainment products might flow.
     The relative ease of use, the global nature of the network, and the
 variety of functions available have made the Internet a powerful com-
 munications tool. The power of this tool is further enhanced by the
 Web, and its ability to access information anywhere in the world
 through hypertext links initiated by simply clicking a computer mouse
 on a line of text.
     The Internet is a global network comprised of over 3.8 million host
 computers.3 More than 5,000 computers are added to the Internet
 available at Harvard University. This alphabetic address is translated by the computer
 into the actual address for the Web site, which is a number code. For a more thorough
 explanation, see SMITH, GIBBS, & McFEDRIES, supra note 10, at 266
   26 George Gilder, The Coming Software Shift, FORBES, Aug. 28, 1995, at 147.
   27 Id.
   2" SMITH, GIBBS, & MCFEDRIES, supra note 10, at 264.
   29 Id at 265.
   30 Mark Fritz, Superhacker Saga Distracts from Real Computer Crime, ToRoNTo
 [Vol 5:1
 Fall 19971      INTERNET COPYRIGHT PROTECTION                        7
 each day.3' One study estimates that about 5.8 million American
 adults are connected to the Internet, but the study "has been criticized
 as too conservative; some argue that there may be as many as 15 mil-
 lion Americans and 30 million users in total connected worldwide."32
 This is a vast market which the Motion Picture and Television Indus-
 try cannot afford to ignore because it will enable the Industry to ad-
 vertise for products in other media, such as television programs or
 movies, and it will enable the Industry to provide specifically created
 entertainment content directly to the users over the Internet.
 A.     The Internet as Advertising
     When the Internet first started to boom in the early 1990s, Holly-
 wood was quick to recognize that the Internet was an ideal place to
 advertise to its core movie audience-young males.             After all,
 throughout the 1 980s, young men between the ages of 16 and 24 were
 the primary movie ticket purchasers.33 This coincides with the major-
 ity of Internet users, who are predominantly young, affluent, educated
 and male.34
 STAR, Feb. 18, 1995, at C6.
   W' SMITH, GIBBS, & MCFEDRIES, supra note 10, at 8.
   32 Donald K. Ghostlaw, Intellectual Property Law Meets the Internet, THE
 CONNECTICUT LAW TRIBUNE, Oct. 16, 1995, at S4.
   "' Suzanna Andrews, The Great Divide: The Sexes at the Box Office, N.Y. TIMES,
 May 23, 1993, at Sec.2, 15.
   14 Claire M. Hinsberg, Net Results: Ted Lang, CEO of an Internet-marketing Firm,
 Talks High Tech Business Trends and Promoting One's Company via the Net,
 CORPORATE DETROIT MAGAZINE, Sept. 1995, Sec. 1, 32; One executive, Larry Kasa-
 noff, whose Threshold Entertainment produced the movie Mortal Kombat and a Web
 site to advertise the film, has commented that the young, educated and male-based
 demographics of the Internet make it a key medium for advertising motion pictures,
 especially those with any adventure of science-fiction component. He has stated:
 "You're reaching 15- to 25-year-olds that generally don't read newspapers, and they're
 not as prone to watch entertainment shows on TV. If you can get them interested in an
 environment that they're already curious about, it's another way of advertising ......
 Yardena Arar, Movie Studios Are Staking Out Their Territory on the Internet, L.A.
 DAILY NEWS, July 19, 1995, at LI0. The studios like the demographics of the Internet
 because Internet users are young, educated, and have lots of disposable income. David
 Barboza, The Frontier in Movie Promotion, N.Y. TIMES, Aug. 22, 1995, at D6.
     The primary vehicle for this advertising campaign was the World
 Wide Web. With its multimedia format, which allows for the posting
 of pages filled with interesting facts about the film, interviews with the
 cast, still pictures from the film, audio recordings, and even down-
 loadable video trailers, the Web was uniquely suited for grabbing us-
 ers' attention.35 The studios have put up Web sites dedicated to such
 films as Clueless,36 Goldeneye,37 Space Jam,38 Batman & Robin39 and
 Independence Day."0
     The creation of a Web site typically accompanies the release of a
 particular movie and forms an integral part of the studio's advertising
    "  Steve Persall, Cinema and Cyberspace, ST. PETERSBURG TIMES, Aug. 9, 1996,
 at ID.
    36 Paramount's   Clueless  Page   (visited Mar.   1996)  . This Web site offers a textual welcome by the main char-
 acter in the film, pictures of the main characters, a dictionary of lingo from the movie,
 a "mall guide," and a list of interesting facts about the movie, cast, and film makers.
 The page is presented in a format that assumes the user is one of characters' friends
 stopping by to chat.
    "  MGM/UA James Bond: Goldeneye (visited Apr. 1997) . The Web page is introduced with the graphic of a code book flashing
 the words "Top Secret" and "M16 Branch" on the cover. In exploring the page, the
 user is assigned the role of one of M16's agents investigating the whereabouts of James
 Bond. The site offers such things as a dossier on Bond, an audio clip of the theme
 song sung by Tina Turner, behind-the-scenes facts, a variety of pictures, and down-
 loadable video clips for later replay.
   38 Space    Jam   Home    Page   (visited Apr.   1997)   . This extensive Web site, produced by the Warner Brothers, the
 distributors of the film by the same name, allowed fans of the movie to view still pho-
 tos from the film of both live and animated characters, to hear songs from the movie
 soundtrack, to download the movie trailer, and to create movie posters, screen savers
 and postcards. The site's advertising potential was enhanced by hyperlinks to the
 Warner Brother's Studio store, and through the use of interactive games and cartoons.
   "   Batman &    Robin Web Page (visited Apr. 1997) . Warner Brothers created this Web-site well in advance of the film's re-
 lease in order to stir up added hype. The site features such items as storyboards, still
 advanced photos of movie posters, and video previews.
   'o Independence Day Website (visited Apr. 1997) . Twenti-
 eth Century Fox, the distributor for this film, has no official homepage as of yet, but
 established one for the release of this film. The site not only offered the standard press
 releases, still photographs, product information and video footage, but also offered an
 interactive comic book, a real-time online multimedia game and an MTV contest.
 [Vol 5:1
 blitz to induce the public to watch the film.4" The addresses for the
 Web sites are posted after movie previews seen on television, in trail-
 ers released in theaters, and in newspaper advertisements for the film.42
     In addition to Web sites for particular films, the major studios have
 put up homepages dedicated to advertising the studios themselves and
 all the relevant products (from movies to toys) associated with that
 studio.43 Some studios have even created departments for the creation
 of Web pages." Additionally, the major theater chains have developed
 Web pages that enable visitors to purchase tickets to currently running
 movies and to preview major releases.45
     The television industry, though slower to respond to the growth in
 the Internet, has also responded by placing advertising on the Internet.
   4" Barboza, supra note 34 (noting how Internet advertising compliments television
 and newspaper advertising campaigns).
   42 One of the most thorough Internet advertising campaigns in recent times was for
 the Disney movie Toy Story. See Walt Disney's Toy Story (visited Mar. 1996)
 . The site not only provides the
 usual pictures and textual facts about the movie, but it also directs a user's attention to
 the products (such as toys) available from the film and where he can buy them by pro-
 viding links to such things as the Disney Store Web pages. The site also offers a data
 base where a user can find the closest theater playing the film and an animated game
 called "Concentration". The site was advertised along with the film in theater trailers,
 newspapers, and television spots. See also Ty Burr, Mouse Pad, ENTERTAINMENT
 WEEKLY, Mar. 22, 1996, at 77 (noting that the site was produced out of house and was
 in place before Disney launched its own collection of Web pages).
   "4 The Warner Brothers web site, , for example,
 contains links not only to the sites for Warner Brothers' movies, television shows and
 cartoon characters, but also offers connections to the Warner Brothers store and War-
 ner Brothers production units. Other studio sites include Paramount Pictures
 , Sony/Columbia/TriStar , MCA/Universal
 , and MGM/UA .
   '4 The Web site for the Disney Corporation is located at: http://www.disney.com.
 For more information on the site, see Burr, supra note 42. Burr notes that the Disney
 public relations department has established a division for the in-house production of
 Web pages dedicated to Disney products. "The massive disney.corn evokes a shiny,
 corporate awe that can make the hardiest of [net] surfers feel puny-it's an online
 Magic Kingdom linking you to info on Disney's movies, music, books, theme parks,
 software, TV shows, and theatrical tours. There are sweepstakes and coloring-book
 pages, film clips and sound snippets ....." Id. See also Stephen Lynch, Disney's Web
 Gamble, THE ORANGE COUNTY REGISTER, Mar. 24, 1996, at K07.
   41 See Movielink (visited Apr. 1997) .
 Fall 1997]
 The major television networks all have Web pages,46 as do the major
 cable networks." Most hit shows, like Friends,48 ER,49 or Star Trek.
 Deep Space 9,5" have Web pages of their own.
     The Web's interactivity, market size, and demographics have thus
  made it an integral part of the Motion Picture and Television Indus-
  try's advertizing effort. Though it is unclear how successful these
  Internet advertizing campaigns have been,5" it is clear that the Web's
  ability to convey text, sounds, pictures, and video has made the Web a
  compelling, if not yet wholly effective, means of advertising.2
    46 See NBC (visited Apr. 1997) ; ABC (visited Apr. 1997)
 ; and CBS (visited Apr. 1997) . As of
 this writing, the Warner Brothers Network and United Paramount Network do not have
 their own independent sites. However, programming for these networks is available
 through the Warner Brothers and Paramount studio Web pages, respectively. NBC has
 taken to advertising the location of its Web site during network identification spots on
    "7 For examples, see CNN (visited Apr. 1997) ; MTV (vis-
 ited  Apr. 1997) ; and   HBO    (visited  Apr. 1997)
    48 NBCs Friends Page      (visited Apr. 1997) .
    "' NBC's   ER    Page   (visited Apr.   1997)   .
    50 Star    Trek.    DS9     (visited   Apr.    1997)    .
    5 It is unclear whether Web sites generate box-office success. Barboza, supra note
 34. The studios can only measure interest in a home page, not potential ticket sales.
 Id. For an analysis of the success of Internet advertising campaigns, see Katie Hafner
 and Jennifer Tanaka, This Web's For You, NEWSWEEK, Apr. 1, 1996, at 74.
   52 Alan Sutton, vice-president of national publicity for Universal Pictures, has
 stated Web sites are the Internet equivalent of a Sunset Strip billboard. "You're
 reaching a vast worldwide audience that is, from what we've found, very hungry for
 entertaining and useful coverage of motion pictures," said Sutton. Arar, supra note 34.
 George Brenner, vice president and chief information officer for MCA/Universal In-
 formation Services, has described the Internet as giving people "more of a taste of
 what a movie is like, something we can't do in print or television advertising." Joe
 Kilsheimer, Lights! Camera! Interaction!, THE ORLANDO SENTINEL, June 4, 1995, at
 Fl. Arthur Cohen, president of worldwide marketing for Paramount Pictures, has de-
 scribed the Internet as "a huge tool for involving people in movies and encouraging
 them to go." Barboza, supra note34. The added benefit of Internet advertising is that
 it is relatively cheap in comparison to newspaper advertising and televisions spots. Id
 [Vol 5:1
 Fall 1997]      INTERNET COPYRIGHT PROTECTION                        11
 B.     The Internet as Content for Sale
     To date, the Motion Picture and Television Industry has not man-
 aged to make a profit by selling content directly to users over the
 Internet. There are two primary reasons for this. First, consumers are
 not likely pay very much for access to a Web page. Second, the In-
 dustry has not developed a means by which to collect such a minimal
 fee. As such, the Web has been little more than "simply toys for the
 PR departments [of Industry corporations], a new way to hawk the
 wares." 3
     The assumption has been that no content provider could charge a
 fee for access to a Web page.54 Many argue that no one would pay the
 same price for a Web page that they would for a movie ticket. Fur-
 thermore, the Web is still very unreliable and content providers will
 find it hard to justify a large fee in light of "the endless delays, dis-
 connects, server errors and 'host unavailable' messages" which users
 still encounter on the Internet.55
     Nevertheless, these difficulties have not prevented the online
 service industries from making content available for sale.56 Similarly,
 Creating a Web home page costs $25,000 to $50,000, a fraction of the $10 million
 marketing budgets accompanying major releases. Id.
   5" See Burr, supra note 42.
   14 See Clark, supra note 6.
   15 Daniel Burstein and David Kline, In the Square-Off Between TV and Computer,
 the Smart Money Might be on the Boob Tube, L.A. TIMES MAGAZINE, Oct. 29, 1995, at
   56 Online service providers include such companies as America Online ("AOL"),
 CompuServe, Prodigy and the Microsoft Network ("MSN"). SMITH, GIBBS &
 MCFEDRIES, supra note 10, at 23. These companies, in addition to providing their us-
 ers with gateways onto the Internet, provide such other services as online shopping,
 online travel agencies, interactive games, and magazine data bases. Hafier, supra note
 16. Online service providers thus greatly differ from Internet service providers, like
 Netcom and AT&T, whose only service entails providing access to the Internet. Id.
 Online service providers are content distributors who charge a blanket fee for access to
 their unique content. Id
   The content provided is developed either by the online service provider directly or
 by licensing arrangements with online content developers. For information regarding
 the various services available on AOL see Elaine Madison, How TO USE AMERICA
 the Motion Picture and Television Industry currently develops content
 for distribution by the online services, receiving compensation through
 the licensing of content to the online services, as opposed to receiving
 compensation directly from     consumers for access to the content.57
 These features tend to be very popular despite being geared largely to
 advertizing other products, such as movie releases.5
     Perhaps the current focus on providing content for online service
 providers is due to the fact that online service providers, unlike Web
 page creators, can charge a blanket fee for access to their content.
 However, the difficulty of collecting fees for Web page access has not
 deterred content creators from making entertainment available over the
 ONLINE (1995); for information regarding one online content developer for AOL, see
 CrossOver Technologies, Inc. (visited Apr. 1997) .
   The online service industries have made a substantial investment in developing new
 and interesting content for sale to consumers. See ABC's World News Tonight, (ABC
 television broadcast, Apr. 2, 1996) (noting how Microsoft Chairman Bill Gates has be-
 gun acquiring licenses from the major museums of the world guaranteeing Gates (and
 through him MSN) the exclusive right to display the museums' work by electronic
 transmission). See NBC's Nightly News (NBC television broadcast, Mar. 4, 1996) (ex-
 plaining the strategic alliance between MSNBC cable television network and MSN for
 the delivery of news and information).
   "   Paramount Television Group, for example, on Sept. 26, 1995, entered into an
 agreement with the MSN whereby Paramount would develop new online sites based
 on its hit TV series Star Trek and Entertainment Tonight. Paramount Television
 Group and Microsoft Corp. Announce Exclusive Agreement for "Star Trek" and "En-
 tertainment Tonight" on the Microsoft Network BUS. WIRE, Sept. 26, 1995 (noting
 that among the services to be provided by Paramount are real-time chat sessions on
 MSN, original multimedia content, a multimedia "Starfleet Academy," forums within
 which fans can interact, and advanced information on television shows and motion
 pictures). Warner Brothers Online recently renewed an arrangement that allows AOL
 to maintain exclusive sites based on such Warner Brothers products as "The Rosie
 O'Donnell Show" and "Kids' WB!" Scott Hettrick, WB Online, AOL sign on again,
 THE HOLLYWOOD REP., Apr. 21, 1997, at 7. MTV and ABC have similar arrange-
 ments with AOL. See GENE STEINBERG, USING AMERICA ONLINE (2d ed. 1996).
   " For example, multimedia content created by Hollywood Online for the movie
 THE MASK had over 21,000 still images downloaded from it during the two month of-
 fering period. David Landis, Catching Some Entertainment, in Bits and Pieces, USA
 TODAY, Aug. 25, 1994, at 8D.
 [Vol 5:1
 Fall 1997]       INTERNET COPYRIGHT PROTECTION                            13
 Internet. Examples of this include narrative soap operas,59 Internet
 magazines,60 games,61 virtual chat rooms62 and special events (such as
 the Kasparov v. Deep Blue match).63 All of these are presently avail-
 able on the Web. Motion picture and television companies have par-
 ticipated in the creation of this entertainment content,"6 and this par-
 ticipation is growing as these companies develop divisions and
    '9 One such Internet soap opera is The Spot, a site where a soap opera story un-
  folds, in text and    graphics, weekly.     The   Spot (visited  Apr. 1997)
  . These Internet soap operas sites not only tell a story, but
  also allow users to view the personal biographies, diaries, and communications of the
  individual characters.
    o Many magazines are now available over the Web. See Entertainment Weekly
  (visited Apr. 1997) ; Wired (visited Apr. 1997)
  ; and   The Hollywood Reporter (visited Apr. 1997)
  . There are also magazines which have been
  created specifically for the Web and are not available in hard print. See JetPack (vis-
  ited Apr. 1997) .
    6" A variety of games are available on the Web from role-playing games (President
  '96 (visited Nov. 1996),  (where the user assumes the role of
  a presidential candidate)) to multi-user video games (Outland (visited Apr. 1997)
   (real-time Internet fantasy game)).
    62 One popular virtual chat-room is "The Palace." The Palace (visited May 1997)
    63 See also On the Internet, It Was 'Mother of All Nights,' THE HOLLYWOOD REP.,
 Nov. 6, 1996, at 6. (noting how CNN's special All Politics site for the 1996 elections
 was on track for 30 to 40 million hits. The pressures placed on the Internet from the
 various election Web sites and chat lines nearly overwhelmed the Net on election eve);
 but see Showbiz Today, Kasparov v. Deep Blue Draws Snooze on the Net, (CNN tele-
 vision broadcast, May 5, 1997) (noting that interest in the May, 1997 rematch between
 Kasparov and Deep Blue had dropped from hit levels registered on the Internet for the
 prior tournament).
    4 CNN and Time Warner, for instance, have created their respective news sites,
 updated every couple hours. CNN (visited Apr. 1997) ; Path-
 finder (visited Apr. 1997) . The most ambitious project
 launched to date by a Motion Picture and Television Industry company was made in
 connection with the 1996 Olympics. For the Olympics, NBC, in conjunction with In-
 tel, used a program known as Intercast to integrate its television broadcast with a Web
 site supplying up-to-the-minute information about the program. JEANNIE NOvAK &
 beds the Web's HTML code in the TV signal and allows it to be displayed on a com-
 puter simultaneously with the TV show. Id
 subsidiaries for purposes of creating Web entertainment.65 Industry
 representatives have indicated that their respective companies intend
 to become more involved in the creation of content for the Web.66
     Many commercial content developers are financing the creation of
 this content through the sale of advertising space on their Web sites.67
 Advertising is rapidly becoming the major source of revenue for the
 Web.68 In this sense, the Web follows the broadcast model of finance
 for television and radio, whereby viewers and listeners are given free
 access to the content and the content developer makes his profit
 through the sale of commercials.69
     Other commercial content developers seek to make a profit based
 on a subscription model, whereby the user is charged a membership
 fee to access a Web site.7" These sites, however, have encountered
    65 Paramount has created a division called Paramount Digital Entertainment, dedi-
 cated to creating "original programming" and "interactive shows" for the Internet.
 Paramount Television Group and Microsoft Corp., supra note 56; NOVAK &
 MARKIEWICZ, supra note 64, at 63; see also An Introduction to Paramount Digital
 Entertainment (visited June 1996) . Dis-
 ney's Web creation arm, Disney Online, is developing both its own sites, and has pur-
 chased existing Web entertainment. Scott Hettrick, Disney Online takes over Family
 Planet, THE HOLLYWOOD REP., Apr. 21, 1997, at 6.
    6 At a March, 1997 seminar of the American Film Market, representatives from
 Universal's, Paramount's, Disney's and Warner Brothers' online divisions declared the
 intention of their companies to become more involved in creating original Internet
 content. Carl DiOrio, Studios find Net Worth in Promo and Production, THE
 HOLLYWOOD REP., Mar. 5, 1997, at 14. One executive, Leonard Washington II, vice
 president and producer at Paramount Digital Entertainment, expressed the commitment
 of Paramount to the creation of new programming for the Internet. Id at 67.
   67 The Web search engines, such as Lycos , Yahoo
 , and Altavista  are financed
 through the advertisements placed on their Web sites. CNN and Pathfinder are also
 financed through advertising. See supra note 64.
   6B NOVAK & MARK1EWICZ, supra note 64, at 237. According to one study, by Ju-
 piter Communications, Web advertising will rise from its 1995 levels of about $50
 million to $2-5 billion by the year 2000. Id. The same report predicts that Web adver-
 tising revenues will rise higher than radio. Id
   69 In 1995, the top five Web advertisers, in order of amount spent, were: I) AT&T,
 2) Netscape, 3) Internet Shopping Network, 4) NECX Direct, and 5) Mastercard.
 NOVAK & MARKIEWICZ, supra note 64, at 238.
   70 Access to the Web site is usually controlled by the use of a password, and the fee
 is generally collected in the form of a monthly credit card payment. ESPN has devel-
 [Vol 5:1
 Fall 1997]      INTERNET COPYRIGHT PROTECTION                         15
 limited success due to the hesitancy of users to transmit their credit
 card numbers to the subscription site without more secure encryption
 technology.7" Moreover, because of the costs involved in credit card
 transactions, a minimum charge of roughly ten dollars is required if
 any profit is to be made through the use of a Web transaction.72 As a
 user is unlikely to pay ten dollars every time he wishes to access a
 Web page, a content provider cannot charge a user for a single access.
 Consequently the user must subscribe to the site or cannot use it at all.
     The solution to this fee collection problem is the development of a
  system of micropayments through which users could be charged a
  couple of cents for access to a Web page-a system of digital cash.
  Digital cash is "the figurative money now being unrolled for use on
  the Internet... [n]o plastic, no bar code, no magnetic stripe-it exists
  only as bits." 73 Digital cash works by having the user deposit a sum of
  money in an account from which payments (no matter how small) are
  automatically subtracted whenever a for-fee Web site is accessed.74 A
  variety of companies have launched initiatives to develop digital cash
  payment mechanisms.75
  oped a Web site, ESPN's SportsZone, at , whereby a
  user is charged $4.95 per month to access sports news, editorials, contest, opinion
  polls, and up-to-the-minute scores. Id at 17. Playboy and the New York Times have
  similarly begun to create subscription based sites. Playboy (visited Apr. 1997)
  ; The  New   York   Times  (visited Apr.  1997)
  . Gaming sites (Cyberpark, ),
  dating services (lst Site, ), and chat rooms (The Palace,
  ) have also begun to follow the subscription model.
  "' Credit card transactions over the Internet, however, are already fairly secure due
  to existing encryption technology. NOVAK & MARKIEWICZ, supra note 64, at 243-246.
  New improvements are underway which will make such transaction more secure. Id
  72 Keiron Henderson, Cybermoney, No More Threatening than Credit Cards, THE
  REUTER EUROPEAN Bus. REP., Mar. 11, 1996.
  "   Michael Finley, E-Money: It's so Much More Refined than the Real Thing, THE
  DENVER POST, Jan. 21, 1996, 2d Ed., at 1-01.
  ' Russell B. Stevenson, Jr., Internet Payment Systems and the Cybercash Ap-
 proach, in 17TH ANNUAL INST. ON COMPUTER LAW 449, 439-56 (Practicing Law In-
 stitute 1997).
   71 Id at 441-42 (noting how one such company is CyberCash, Inc., whose system
 is already undergoing testing). See also Chris Herringshaw, E-Cash Gets to Work,
     As Internet technology evolves, and as Web pages become more
 than just text with pictures, the demand for such Internet-based enter-
 tainment can only increase. This heightened demand will increase the
 ability of content providers to earn a profit, through either advertising
 or fees charged for access. Already, for example, it is now possible for
 a user to download audio files from Web pages76 and play them on an
 audio player on the user's computer." The audio files can contain
 such things as the soundtrack from a film, the theme song from a tele-
 vision show, or a song recorded by the original artist or band."8
     The major drawback of downloading these digitized audio files,
 however, is that they are extremely large and can occupy a lot of
 memory on the user's hard drive.79 The large size of the files also
 means that they take a tremendous amount of time to download."0
 INTERNET WORLD, May 1997, at 84 (describing other efforts to develop e-cash).
   76 Kenneth Suzan, Tapping to the Beat of a Digital Drummer: Fine Tuning US.
 Copyright Law for Music Distribution on the Internet, 59 ALB. L. REv. 789, 798
 (1995) ("As soon as full-length songs or... sound bites are placed in digital format
 and stored within a computer, the audio takes the shape of a computer file. By virtue
 of being placed in a computer file format, it can be copied effortlessly like any other
 computer file.").
   17 See, e.g., Disney Records (visited Apr. 1997)  (offering a wide variety of clips from Dis-
 ney films for downloading).
   7s See also The Ultimate Band List (visited Apr. 1997)  (offering access for users to hundreds of band home pages where
 they can download sound clips from their latest releases); Internet Underground Music
 Archive (visited Apr. 1997)  (of-
 fering clips and full length recordings of works performed by various bands); Pentagon
 CDs and Tapes (visited Apr. 1997)  (offering sound clips
 for download prior to a visitor's purchase of a mail-order CD); and Kenneth Suzan,
 supra note 77, at 801 (explaining that one Internet site, located in Finland, offered us-
 ers worldwide the opportunity to download complete songs digitized from contempo-
 rary artists' recordings).
   "' Price Coleman, Wired for Sound: Hard Rock is Rolling Down That Info High-
 way as Aerosmith Sends Out Digital Vibes for PC Users, ROCKY MOUNTAIN NEWS,
 June 26, 1994, at 104A.
   " Neil Strauss, The Pop Life: Hit Makers Warily Explore the Computer Frontier,
 N.Y. TIMEs, July 6, 1994, at C9 (explaining that it takes a long time to download these
 digitized files because the quality of sound recording is high--equivalent sometimes to
 [Vol 5:1
 Fall 1997]      INTERNET COPYRIGHT PROTECTION                           17
 When an Aerosmith song was released to CompuServe's online users
 in 1994, it took a user between sixty and ninety minutes to download
 the song using a modem set at a speed of 9,600 or 14,400 baud81 (the
 then average speed for PC modems).82 Despite the slow download
 rate, 7,000 members of CompuServe were not deterred from down-
 loading the Aerosmith file onto their home computers during the eight
 day offering period.83 The slow download time, however, remains an
 obstacle to the marketability of audio files.
     The solution is to bypass downloading entirely by providing real-
 time audio over the Internet.' Audio on demand allows users to hear
 CD quality-thereby requiring larger memory capacity).
   8' See Landis, supra note 58 (describing how Geffen records offered a complete
 song, Aerosmith's Head First, exclusively on CompuServe before the song was re-
 leased to stores. The less-than-CD quality version took over an hour to download).
   82 Baud is a measure of how much bandwidth a transmission medium has and re-
 flects the speed of a modem. SMITH, GIBBS, & MCFEDRIES, supra note 10, at 389.
 The baud rate can also be expressed in terms of bits per second (bps). Id "Since it
 takes eight bits to describe a single character, a transmission medium with a bandwidth
 of 8 bps would send data at the pathetically slow rate of one character per second.
 Bandwidth is normally measured in kilobits per second (Kbps- thousands of bits per
 second). So, for example, a 14.4 Kbps modem can handle 14,400 bits per second." Id.
 A 28.8 Kbps modem is painfully slow in comparison to even an ancient single-spin
 CD-ROM drive that can transfer 150K of data each second. Jane Ozer, Sound Blasts
 the Web, PC MAGAZINE, Mar. 26, 1996, at 103. The 28.8 Kbps modem is approxi-
 mately 1/40 the speed of an old CD-ROM. CD-quality audio requires about 176K of
 raw data per second, close to 50 times the capacity of a 28.8 Kbps modem. Id. 33.6
 Kpbs modems are currently in existence and new 56 Kbps are ready for release soon,
 but both are still too slow to deliver audio or video on demand and as the 56 Kbps mo-
 dem uses the entire capacity of the copper wire phone lines, it is unlikely that future
 modems can be created that increase the bandwidth available to a PC. Visual Band-
 width, PC COMPUTING, May 1997, at 204.
   83 Coleman, supra note 79. Likewise, one Carl Malamud is using the Internet to
 distribute a weekly "radio" interview show called "Geek of the Week", despite the
 fact that it takes the average computer about an hour over a high-speed modem to
 capture 30 minutes of sound. Elmer-Dewitt, supra note 8, at 64. The question re-
 mains: why would anyone wait for an hour to listen to a half-hour show when they
 could receive the same information over the radio or even CD instantly? Id
   4 Jan Ozer, Sound Blasts The Web, PC MAGAZINE, Mar. 26, 1996, at 103 (de-
 scribing real-time audio as based on streaming technologies that start playback after a
 short buffering period and continue to play until the message is finished).
 everything from top-of-the-hour news to audio track episodes from TV
 shows to contemporary pop hits just as the user would over the radio
 with only a slight delay.85 There are a variety of computer programs
 already in existence that allow users to listen to music in real time.86
 The low-bandwidth problem, and hence the slow speed of transmis-
 sion, is solved by compressing "the audio data stream drastically to
 match the throughput of [the] Internet connection, which may be as
 low   as 9,600 bps."87    The problem    with compression technology,
 however, is that the more the bitstream is compressed, the more the
 underlying audio work is distorted.88 As a result, real-time audio
 broadcasts remain poor in quality-a problem that may not be re-
 solved until conduit bandwidth is increased.89
     Another means by which demand for Internet entertainment is
 likely to be raised is through the offering of video over the Web. In
 fact, many sites currently offer video clips for downloading.9" Again,
 the problem is that these files tend to be large, substantially larger than
 audio files, and as a result, even with current compression technology,
    85 Allman, supra note 24.
    86 ,[T]he five important streaming audio products on today's Web [are]: Internet
 Wave 1.0, from VocalTec; RealAudio 2.0, from Progressive Networks; Stream Works,
 from Xing Technology Corp.; ToolVox for the Web, from Voxware; and TrueSpeech
 Internet from The DSP Group." Ozer, supra note 84, at 103.
   87 Id at 103-04 (explaining how compression works). In sum, an encoding pro-
 gram shrinks the audio bitstream to match the capacity of low-bandwidth connections
 used for Internet access, the bitstream is transmitted, and upon receipt, the player pro-
 gram on the user's computer decompresses the bitstream. Id
   "8 Id. at 104 (explaining that this distortion arises because the original file which
 was compressed is not reproduced in its exact pre-decompression form during play-
 back. "Rather, during compression, the codec discards the original data, replacing it
 with a more compact representation. During playback, the codec reassembles the in-
 formation into a file that approximates the basic structure of the original but isn't ex-
 actly the same." A codec is compression/decompression program).
   89 Id.
   90 See,   e.g.,  Sony   Pictures  Entertainment  (visited  Apr.   1997)
  (offering a variety of
 video clips from Sony films ranging from 3.0MB to over 8.0MB); CNN Interactive
 (visited Oct. 1997)  (offering video clips from daily news sto-
 [Vol 5:1
 Fall 1997]      INTERNET COPYRIGHT PROTECTION                        19
 transmission of more than a few seconds of video is impractical and
 requires tremendous download time.9'
     The solution, as with audio, is real-time video technology. As
 with audio, current programs exist making real-time video possible.92
 Video, however, can only play at 1 or 2 frames per second in real-time
 with a 28.8-Kbps modem connection,9' and unlike audio, video cannot
 effectively be compressed to play quickly without avoiding substantial
 distortions in the pictures delivered (either substantial degradation in
 speed or in resolution quality must be accepted).94 At current modem
 connection speeds, therefore, "the technology is barely usable." 95
     There is a new generation of modem connections on the horizon
 seeking to overcome the low bandwidth problem.96 ISDN and ADSL
 connections, for example, greatly reduce downloading time.97 How-
 ever, it is the speed of cable modems, which use the coaxial TV cables
 which people have in their homes, which will likely make full-motion
   9' Burstein and Kline, supra note 55.
   92 Two major real-time video programs are currently on the market: StreamWorks,
 from Xing Technology Corp., and VDOLive, from VDOnet Corp. Jan Ozer, Web TV
 Tunes In, PC MAG., Mar. 26, 1996, at 129. New programs, such as VDOLive 2.0, Vi-
 voActive, and VXtreme Web Theater, with enhanced streaming technology, have
 made the delivery of real-time video more feasible. Free Web Video Without the Wait,
 PC COMPUTING, Apr. 1997, 115-16.
   93 Id
   94 Compressing CD-quality audio to where it will work over a 14.4 Kbps connec-
 tion requires an effective compression ratio of 97:1. By contrast, compressing televi-
 sion quality video, whose original bandwidth is about 27 megabytes per second, to a
 usable 28.8 Kbps requires a 7,500:1 compression ratio. Id
   9' Id. The Internet's low bandwidth problem is a substantial problem across the
 entire Internet. It is estimated by some theorists that it would take only 100 full-motion
 video signals to swamp the entire information-carrying capacity of the Internet.
 Burstein and Kline, supra note 55.
   9 The common telephone modem speed, for example, is currently up to as fast as
 56 Kbps. Bonny Georgia, Visual Bandwidth, PC COMPUTING, May 1997, 202-207.
   97 ISDN connections, now common among Internet users, have a speed of 64Kpbs
 to 128 Kbps. Id at 205. ADSL, the new asymmetric digital subscriber line, promises
 speeds as high as 8Mbps while still making use of the standard copper telephone lines.
 Id at 206 (describing the new ADSL technology). Wireless technology offers another
 possible solution to the bandwidth problem. Rich Schwerin, Internet Everywhere, PC
 CoMPUTING, Apr. 1997, 302.
 video possible in the future.98 In fact, the new cable modems will de-
 liver the information at a rate of 10,000-Kbps (thousands of times
 faster than twisted copper phone wire), and while it takes a typical
 28.8 Kbps phone modem 9.7 minutes to download a one-megabyte
 file, it will only take the cable modem eight tenths of a second.99
     Therefore, in a few years, it will be possible to deliver real-time
 video over the Internet to consumers upon demand."°° This has led
 some experts, such as Andy Grove, CEO of Intel Corporation, to de-
 clare "some think the information superhighway will come through
 their TV ... [but] the informational tool of the future is on your desk,
 not your living room.., the personal computer is going to eat the
 TV." 101 Eventually the advance of Internet technologies will make it
 possible for the Motion Picture and Television Industry to deliver ex-
 citing movies, multimedia, and special programming to users over the
 Web for a fee, provided a workable payment system can be created.'02
   98 Katie Hafner and N'Gai Croal, Getting Up to Speed, NEWSWEEK, Mar. 4, 1996,
 at 46 (noting that the new high-speed, high bandwidth modems will make it possible
 for entertainment providers to deliver such things as basketball games on the computer,
 complete with the Internet's interactive features which would allow a viewer to click a
 line and instantly watch a replay, another courtside angle, or browse through the play-
 ers' statistics).
   "9 Id at 47. Both Time Warner and TCI have developed plans for the sale and dis-
 tribution of cable modems. Id TCI is the largest cable operator in the United States and
 has created a special subsidiary, @Home, to develop its current cable modem project.
 Id It is interesting to note, however, that only about 17% of cable systems in the
 United States can handle two-way data transmissions. Id Before interactive Internet
 service is offered, the other cable networks will have to be upgraded to allow more
 than just downstream only transmission into the home. This will enable users to send
 commands back up to the Internet through their cable networks. Id
      TCI has recently pulled back from immediate deployment of cable modems. Jeff
 Ubois, Bright Horizon, INTERNET WORLD, May 1997, at 58, 62 (interview with John
 Curran, Chief Technology Officer of BBN). Nevertheless, the technological power of
 cable modems is likely to bring them to dominance some time in the near future. Id.
       See generally Landis, supra note 58.
   101 Burstein and Kline, supra note 55.
   102 One company, NetChannel, for instance, has entered into deals with cable
 channels, such as A&E and Court TV, seeking to meld TV-based Internet access with
 new Internet programming. Katharine Statler, NetChannel lines up Web alliances,
 VARIETY, May 20, 1997, at 6.
 [Vol 5:1
 Fall 1997]     INTERNET COPYRIGHT PROTECTION                      21
     With a system of payment in place, it will become possible for
 content providers to sell entertainment to consumers over the Internet,
 and the Web will thus become something more than just a toy for stu-
 dio PR departments. The financial stake of the Motion Picture and
 Television Industry in the Internet will grow as the Industry shifts
 from providing the mere advertising that it currently puts out to creat-
 ing entertainment exclusively for the Web.
     The effective use of the Internet by the Motion Picture and Televi-
 sion Industry for either advertising purposes or entertainment delivery
 will entail placing tremendous amounts of intellectual property on the
 Internet. To secure any profits to be made from the sale, lease, or use
 of such property, the Industry requires a legal framework under which
 such property can be protected from theft or unauthorized appropria-
 tion. Moreover, even if the Industry chooses not to place intellectual
 property on the Internet, existing intellectual property will have to be
 protected from unauthorized appropriation by those creating content
 for the Internet. Thus this type of use of the Internet will create nu-
 merous concerns regarding the creation and protection of copyrighted
 A.    The Enhanced Danger of Infringement
     The current governing statute for federal copyright law is the
 Copyright Act of 1976.'03 The 1976 Act grants copyright protection to
 the owners of copyrights in "original works of authorship fixed in any
 tangible medium   of expression." "   The owner of a copyright in a
   103 17 U.S.C. §101 etseq.
       Copyright protection subsists, in accordance with this title, in original works
 of authorship fixed in any tangible medium of expression, now known or later de-
 veloped, from which they can be perceived, reproduced, or otherwise communi-
 cated, either directly or with the aid of a machine or device. Works of authorship
 include the following categories:
     (1) literary works;
     (2) musical works, including any accompanying words;
     (3) dramatic works, including any accompanying music;
     (4) pantomimes and choreographic works;
     (5) pictorial, graphic, and sculptural works;
 work has the exclusive rights to perform or authorize such things as
 the reproduction of the copyrighted work in copies or phonorecords, to
 prepare derivative works based upon the copyrighted work, to distrib-
 ute copies of the copyrighted work, or to perform or display the copy-
 righted work publicly.'05 Anyone who engages in or authorizes any-
 one to engage in any of the exclusive rights granted to a copyright
 owner without that owner's consent is an infringer and is subject to li-
 ability.'"6 Copyright infringement has become a real and grave prob-
 lem on the Internet.
     One form of infringement occurs when an Internet user places a
 portion of a copyrighted work on the Internet without that copyright
 owner's permission. That copyrighted work exists in an independent,
 fixed form outside the Internet-such as a script, a photographic still
 from a television show, footage from a newly released videotape, or a
     This practice of taking portions of copyrighted entertainment
 works and placing them on the Internet (with or without the permis-
     (6) motion pictures and other audiovisual works;
     (7) sound recordings; and
     (8) architectural works.
  17 U.S.C. §102(a) (1994).
    '05 Subject to sections 107 through 120 of Title 17, the owner of the copyright un-
 der this title has the exclusive rights to do and to authorize any of the following:
     (i) to reproduce the copyrighted work in copies or phonorecords;
     (2) to prepare derivative works based upon the copyrighted work;
     (3) to distribute copies or phonorecords of the copyrighted work to the public by
     sale orother transfer of ownership, or by rental, lease or lending;
     (4) in the case of literary, musical, dramatic, and choreographic works, pantomimes,
     and motion pictures and other audiovisual works, to perform the copyrighted work
     publicly; and
     (5) in the case of literary, musical, dramatic, and choreographic works, pantomimes,
     and pictorial, graphic or sculptural works, including the individual images of a mo-
     tion picture or other audiovisual work, to display the copyrighted work publicly.
  17 U.S.C. § 106.
  ,"6 "Anyone who violates any of the exclusive rights of the copyright owner as
  provided by sections 106 through 118 or of the author as provided in section
  106A... is an infringer of the copyright or right of the author, as the case may be." 17
 U.S.C. §501(a) (1994).
 [Vol 5:1
 Fall 1997]      INTERNET COPYRIGHT PROTECTION                       23
 sion of the copyright owner) has become quite common. For instance
 the online Internet address directory known as Yahoo lists some 40
 links to Web pages featuring dialogue, pictures, music and video clips
 taken from the show Friends."7 Much of the use of this content has
 been unauthorized. Yahoo further lists 12 unofficial sites dedicated to
 the show ER'0 and well over a hundred unofficial sites dedicated to
 the various manifestations Star Trek.'09
     A second form of infringement occurs when a piece of intellectual
 property is created specifically for the Internet (as opposed to having
 the copyright reside in a fixed, tangible work outside the Internet).
 The copyrighted work, often taken the form of a Web page or its con-
 tent, is then appropriated by an Internet user who utilizes it either to
 create another work on the Internet or downloads it into a tangible
 form for sale. For example, a studio creates a cartoon video clip for
 distribution over the World Wide Web, places it on the Internet, and
 claims a copyright on the Web page. An Internet user then downloads
 the clip and either places it on a BBS for free distribution to others, or
 sells it on CD-ROM as part of a multimedia collection. This form of
 infringement has been relatively rare to date, but as Industry members
 become more involved on the Internet, the potential for this type of in-
 fringement will definitely increase.
     The danger of infringement is enhanced by the fact that all infor-
 mation transferred over the Internet is "digital." 110 Unlike previous
   ,07 Yahoo  (visited Apr. 1997) . An examination of these pages reveals many are
 created by college students on university UNIX computers, mostly without the permis-
 sion of Warner Brothers or NBC, the owners of the copyright to the show.
   "   Id   at   .
   '0  See id. at .
   110 Suzan, supra note 58, at 796. At the heart of digitization is the translation of
 information into mathematical bits. N. Jansen Calamita, Coming to Terms with the
 Celestial Jukebox: Keeping the Sound Recording Copyright Viable in the Digital Age,
 74 B.U. L. REv. 505, 515 (1994). If a sound recording, for example, were to be trans-
 mitted over the Internet, the process would begin by having the sound uploaded from
 its tape onto the computer and converted into a series of Is and Os (known as bits). Id
 These bits would then be sent over the Internet to another computer, where digital
 equipment then reassembles the code into sound "with virtually no loss in quality from
 analog copying of recordings and reproductions, digital copies of
 works can be made with no generation loss-each digital copy is vir-
 tually an exact replica of the original work with no loss in quality no
 matter how many generations away the copy is from the original."'
 Both the first and the hundredth generation are virtually identical."2
 Additionally, digitization makes it possible to make an infinite number
 of replications after the initial sunk cost of downloading the first copy
 is made-there are no marginal costs in making additional copies."3
 As infringement becomes easier and exact copies can be made at little
 cost with little or no quality loss, the incentive for people to infringe is
 greater, and the potential size potential of each infringement is en-
 hanced. As a result, "just one unauthorized uploading of a work onto
 a bulletin board, for instance-unlike, perhaps, most single reproduc-
 tions and distribution in the analog or print environment--could have
 devastating effects on the market for the work."' "'
     This ease of reproduction has led some critics to argue that copy-
 right law simply does not apply to the Internet."5 So, "the riddle is
 the original [sound] recording." Id
    ... David J. Loundy, Revising Copyright Law for Electronic Publishing (visited
 Apr. 1997) .
    ..2 Bruce A. Lehman, The Report of the Working Group on Intellectual Property
 Rights 12 (hereinafter "White Paper") (Sept. 1995). In February 1993, President
 Clinton formed the Information Infrastructure Task Force (IITF) to articulate and im-
 plement the Administration's vision for the National Information Infrastructure (Nil)-
 the name for the information superhighway of the future that is to include the Internet.
 White Paper, at 1. The IITF was chaired by the late Secretary of Commerce, Ronald
 H. Brown, and consisted of high-level representatives of the Federal agencies that play
 a role in advancing the development and application of information technologies. Id.
      Under the rubric of the IITF, a Working Group on Intellectual Property, chaired
 by Assistant Secretary of Commerce and Commissioner of Patents and Trademarks
 Bruce A. Lehman, was established to examine the intellectual property implications of
 the NIl and make recommendations on any appropriate changes to U.S. intellectual
 property law and policy. Id. at 2. In September, 1995, the Report of the Working
 Group on Intellectual Property (the "White Paper") was issued. Id. at 4.
   "3 Loundy, supra note 111.
   "  White Paper, at 15.
   "1 Barlow, Selling Wine Without Bottles, Wired: The Economy of Mind on the
 Global Net    (visited Dec.   1996)  .
 [Vol 5:1
 Fall 1997]     INTERNET COPYRIGHT PROTECTION                        25
 this: if... property can be infinitely reproduced and instantaneously
 distributed all over the planet without cost, without our knowledge,
 without its even leaving our possession, how can we protect it?"" 16
 This belief, that copyright law can never be enforced on the Internet,
 has led critics to characterize copyright protections as "sailing into the
 future on a sinking ship" and efforts at reforming copyright law to ad-
 dress the problems of the Internet as trying "to keep the old boat
 floating" by "a frenzy of deck chair rearrangement." " 7 These critics
 suggest that the Internet should be regarded as a "public domain"
 where the rules of copyright infringement do not apply."8
     Notwithstanding these arguments, several courts have sought to
 enforce copyright laws on the Internet. One case involving the music
 industry was Frank Music Corp. v. CompuServe, Inc."9 In this case,
 the Harry Fox Agency, Inc. filed a class action copyright infringement
 suit on behalf of a variety of music publishers alleging that Compu-
 Serve permitted users to upload and download previously recorded
 songs without the consent of class members holding the copyright.'20
 Although the case settled before going to trial, it still set a precedent
 for recovering damages for these types of infringements.12'
     In another case, Playboy Enterprises, Inc. v. Frena, the plaintiff,
 owner of the copyright to "Playboy Magazine," brought suit against
 defendant Frena, the operator of a small computerized bulletin board
   116 Id
   ... Id The ease of reproduction on the Internet ensures that the public will violate
 any copyright limitations placed on Internet use. Id Such regulations will thereby
 only serve to instill a disrespect and contempt among the public for the law in general.
 Id. Copyright law always meant to protect the physical expression of ideas, but now
 the Internet makes it possible to convey ideas from one mind to another without ever
 making them physical. Id.
   118 Id
   119 Frank Music Corp. v. CompuServe Inc., 93 Civ. 8153 (S.D.N.Y. 1993).
   120 For more information on the Frank Music case, see Richard Raysman and Peter
 Brown, Liability on the Internet, N.Y. LAW J., Nov. 8, 1994, at 3.
   121 Suzan, supra note 58, at 820. "The two parties have agreed to a licensing ar-
 rangement whereby managers of CompuServe's interest areas will secure licenses from
 the Harry Fox Agency which 'permit the future uploading and downloading of re-
 cordings of the publishers' songs."' Id  CompuServe further agreed to impose a
 moratorium on the uploading of songs onto its music BBS. Id
 system ("BBS").122 A subscriber to the defendant's BBS uploaded
 files containing digitized pictures copied from the plaintiff's copy-
 righted magazines. As a result these files were available for down-
 loading by other BBS subscribers.'22 The plaintiff brought a suit for
 copyright infringement alleging that the defendant had violated the
 plaintiff's exclusive right to distribute copies to the public in violation
 of 17 U.S.C. §106(3) and that the defendant had violated plaintiffs
 exclusive right to display the photographs in violation of 17 U.S.C.
 § 106(5). 124 The plaintiff brought a motion for summary judgment for
 the copyright violations which the court granted. The court held that
 liability existed under both sections of the Copyright Act, despite the
 defendant's insistence that he himself had never uploaded or down-
 loaded any infringing material, and that he had only provided the
 mechanism by which others infringed.'25
     Frena was found directly liable for infringing the distribution and
 display rights of the plaintiff Playboy. The Court determined that it
 did not matter the defendant claimed he did not make the copies him-
 self. In addition, Frena conceivably could have been held indirectly
 liable for the copying of others under the principles of vicarious and
 contributory liability.'26
     In Sega Enterprises Ltd. v. MAPHIA, the plaintiff, Sega Enter-
 prises Ltd., a computer software producer, brought suit against defen-
 dant Chad Scherman and his BBS business known as MAPHIA, al-
 leging that the defendants infringed plaintiffs copyright by allowing
 its users to upload and download copies of plaintiffs software without
 the plaintiffs permission.'27 The plaintiff moved for and was granted
 a preliminary injunction on the basis that Sega had "established a
 likelihood of success on the merits of showing a prima facie case of
 direct and contributory infringement by Defendants' operation of the
 MAPHIA bulletin board." 128
   122 Playboy Enters., Inc. v. Frena, 839 F. Supp. 1552 (M.D. Fla. 1993).
   123 Id
   124 Id at 1556.
   125 Id at 1556-57.
   126 See discussion, infra at IV.B.9, of vicarious and contributory liability.
   .27 Sega Enters. Ltd. v. MAPHIA, 857 F. Supp. 679, 683 (N.D. Cal. 1994).
   128 Id. at 687.
 [Vol 5:1
 Fall 19971      INTERNET COPYRIGHT PROTECTION                      27
     Religious Technology Center v. Netcom slowed the trend of hold-
 ing BBS operators liable for copyright infringements by its subscrib-
 ers.'29 The plaintiffs, Religious Technology Center ("RTC") and
 Bridge Publications, Inc. held the copyrights in certain published and
 unpublished works by L. Ron Hubbard, the late founder of the Church
 of Scientology.3" The plaintiffs brought suit against defendant Dennis
 Erlich, a former minister of the Church of Scientology who had be-
 come a vocal critic of the Church, for infringing plaintiffs' copyright
 in the works.'3' The plaintiffs alleged that Erlich violated plaintiffs'
 the copyright by reproducing copies of the works on a BBS operated
 by defendant Klemesrud without permission. The BBS in turn was
 connected to the Internet through an arrangement with Internet access
 provider Netcom, also a defendant in the action, which enabled us-
 ers/subscribers to download the material.'32 The plaintiffs moved for
 and were granted a preliminary injunction against Erlich prohibiting
 further infringements on the grounds that they had demonstrated a
 likelihood of success in proving defendant Erlich's direct liability.'33
     Klemesrud and Netcom subsequently moved for both a judgment
 on the pleadings and a summary judgment.'34 The court found that
 these defendants were not directly liable for infringing the plaintiffs'
 reproduction, distribution or display rights, holding that these defen-
 dants "did not take any affirmative action that directly resulted in
 copying plaintiffs' works other than by installing and maintaining a
 system whereby software automatically forwards messages received
 by subscribers." "'1 This result is in direct contrast with the result in
   "29 Religious Tech. Ctr. v. Netcom (Netcom 1), 923 F. Supp. 1231 (N.D. Cal. 1995)
 (granting in part and denying in part plaintiffs' application for a preliminary injunc-
 tion); Religious Tech. Ctr. v. Netcom (Netcom II), 907 F. Supp. 1361 (N.D. Cal. 1995)
 (denying Defendant Netcom's motion for summary judgment).
   "3o Netcom I, 923 F. Supp. at 1238 (N.D. Cal. 1995).
   "I' Id at 1239. This action was part of a series of actions brought by Religious
 Technology Center against critics of the church of Scientology. See Religious Tech.
 Ctr. v. Lerma, 897 F. Supp. 260 (E.D. Va. 1995).
   132 Id. at 1239.
   "   Id at 1250.
   1   Netcom II, 907 F. Supp. 1361 (N.D. Cal. 1995).
   "3 Id. As neither defendant incurred direct financial benefit from the infringing
 activities of its users, the court also granted summary judgment to the defendants on
 the issue of vicarious liability. Id. at 1376. However, the court declined to grant sum-
 Playboy, where the court found violations of the copyright owner's
 § 106(3) right to distribute copies and § 106(5) right to publicly display
 the copyrighted work.'36
     In a final and recent case, Religious Technology Ctr. v. Lerma, the
 RTC, as owner of the copyrights in the works of L. Ron Hubbard, sued
 Lerma, a former member of the Church of Scientology, for posting
 RTC documents on the Internet and sued his internet service provider
 for contributory infringement.'37  RTC moved for and was granted
 summary judgment on its claim against Lerma that he infringed the
 plaintiffs' copyrights by posting the works onto the Internet.138 The
 court rejected Lerma's fair use, merger, and copyright misuse de-
 mary judgment to the defendants on the issue of contributory liability noting that
 plaintiffs, however unlikely it may be, might prove that the two defendants had knowl-
 edge of the infringing activity and materially contributed to the infringing conduct
 through their services by not stopping it. Id at 1373, *29. The court did not specify
 what conduct by Netcom may have materially contributed to the infringing conduct.
 See id Defendants Netcom (August 1996) and Klemesrud (September 1996) subse-
 quently settled with plaintiff RTC. June M Besek, Recent Developments in Fair Use
 Under the Copyright Act, 17TH ANNUAL INSTITUTE ON COMPUTER LAW 51 (Practicing
 Law Institute 1997).
    136 See Playboy Enters., Inc. v. Frena, 839 F. Supp. at 1556.
    "3 Religious Tech. Ctr. v. Lerma (Lerma I), 897 F. Supp. 260 (E.D. Va. 1995)
 (denying plaintiff's motion for a temporary restraining order and preliminary injunc-
 tion against Defendant Washington Post); Religious Tech. Ctr. v. Lerma (Lerma II),
 908 F. Supp. 1353 (E.D. Va. 1995) (denying plaintiffs motion for reconsideration and
 plaintiff's motion for a preliminary injunction against Defendants Lerma and Digital
 Gate Systems); Religious Tech. Ctr. v. Lerma (Lerma III), 908 F. Supp. 1362 (E.D.
 Va. 1995) (granting Defendants Washington Post, Marc Fisher and Richard Leiby's
 motion for summary judgment); Religious Tech. Ctr. v. Lerma (Lerma IV), 40
 U.S.P.Q.2d 1569 (E.D. Va. 1996) (granting Plaintiff Religious Technology Center's
 motion for summary judgment against Defendant Lerma). Lerma I and Lerma H were
 decisions arising from a collateral action against the Washington Post for its reproduc-
 tion of certain documents which were the subject of the law suit.
   138 Lerma IV, 40 U.S.P.Q.2d at 1571 (E.D. Va. 1996). But see Religious Tech. Ctr.
 v. F.A.C.T.Net Inc., 901 F. Supp. 1519 (D. Colo. 1995) (In an action by RTC to enjoin
 defendant Lerma from copying RTC documents and posting the works to the Internet,
 the court denied the injunction stating that the limited, noncommercial postings were
 fair use).
 [Vol 5:1
 Fall 1997]     INTERNET COPYRIGHT PROTECTION                    29
 fenses.'39 The court made no ruling with respect to the Internet service
 provider as RTC settled its claim with Digital Gateway Systems prior
 to the final disposition with respect to Lerma.140
     The courts have thus already confronted some initial copyright in-
 fringement concerns on the Internet, with somewhat conflicting re-
 sults. As demonstrated in Part II, the use of the Internet as a medium
 for delivering product directly to consumers will grow in the near fu-
 ture, and to some extent this capacity is already here. Therefore, these
 types of cases will only become more common and plague courts
 around the country. Even if the Motion Picture and Television Indus-
 try chooses to totally ignore the potential of the Internet as a medium
 to provide entertainment products, it still has a major interest in en-
 suring that intellectual property piracy on the Internet does not under-
 cut Industry products delivered through other mediums.
 B.    Ambiguities in Copyright Law on the Internet
     The problem of the heightened potential for copyright infringe-
 ment is compounded by the fact that the rise of new Internet technolo-
 gies has led to concerns as to how copyright law is to be effectively
 applied to the new technology. As a result, new ambiguities in copy-
 right law have developed, ambiguities that make the goal of defending
 intellectual property on the Internet more problematic.
           1.   The Existence of Copyright Law on the Internet
     As noted above, several critics on this issue have questioned
 whether copyright law even applies to the new medium of the Inter-
 net.141 These critics, however, have no credible argument to support
 their position, and provide no reason why this should be be the case.
     As to infringements where the original copyrighted entertainment
 piece is located in a fixed, tangible form outside the Internet, it is clear
 that copyright protections ought to apply. Most entertainment works,
 such as motion pictures and television programs, are clearly listed as
   "' Lerma IV, 40 U.S.P.Q.2d 1569 (E.D. Va. 1996).
   140 Id. at 1574.
   14' See discussion, supra at 24-25.
 protected works of authorship under the 1976 Copyright Act.142 Any
 work, provided it is "original" and "fixed in any tangible medium of
 expression" is protected, whether it be a script, a film, a sound re-
 cording, or a pictorial graphic.143 The mere fact that the Internet has
 enabled and encouraged the unauthorized duplication of these works
 does not change the legal reality that they are protected, or remove the
 works from the realm of copyrighted material.'44
     As to infringements where the original copyrighted work is created
  specifically for and is first released to the public over the Internet it-
  self, the issue becomes less clear. Unlike motion pictures, Internet
  works (i.e. Web pages or content designed exclusively for them) are
  not one of the eight works of authorship listed in § 102(a).'45 However,
  as the list is only illustrative, Internet creations can still be protected as
  copyrighted works provided they are "original" and are "fixed in any
  tangible medium of expression ... from which they can be perceived,
  reproduced, or otherwise communicated, either directly or with the aid
  of machine or device." 146
     A "work is 'fixed' in a tangible medium of expression when its
 embodiment in a copy or phonorecord, by or under the authority of the
 author, is sufficiently permanent or stable to permit it to be perceived,
 reproduced, or otherwise communicated for a period of more than
 transitory duration. A work consisting of sounds, images, or both, that
    142 17 U.S.C. §102(a)(6) ("Copyright protection subsists... in original works of
 authorship .... Works of authorship include the following categories; ... (6) motion
 pictures and other audiovisual works;").
   141 17 U.S.C. § 102(a).
   " Furthermore, the argument that by being placed on the Internet these works
 somehow enter the public domain ignores the possibility that many of these copy-
 righted materials are being placed on the Internet without the copyright owner's per-
 mission. For further analysis, see Lance Rose, Is Copyright Dead on the Net? (visited
 Feb.     1997)     . In order for a copyright work to enter the public domain, it must be
 expressly placed there by the copyright owner. Id Additionally, the courts that have
 encountered this form of infringement using Internet or quasi-Internet conduits have
 repeatedly enforced copyright law. See Sega Enters. v. MAPHIA, supra note 127;
 Netcom I, supra note 129; Lerma IV, supra note 137.
   141 17 U.S.C. § 102(a).
   146 Id
 [Vol 5:1
 Fall 1997]      INTERNET COPYRIGHT PROTECTION                       31
 are being transmitted, is 'fixed' for purposes of this title if fixation of
 the work is being made simultaneously with its transmission." 147
     As most Web pages are stored on hard disks or equivalent storage
 devices, Web pages will meet the fixation requirements of copy-
 rightability.'41  But what about some e-mails or real-time transmissions
 which may never be downloaded onto disks and thereby reside only in
 Random-Access Memory (" RAM" )?149 In the case of software, the
 courts have consistently and uniformly held that loading the software
 into a computer's RAM sufficiently fixes the work so as to be copy-
 rightable-just like a floppy disk, you can point to a RAM chip which
 is a tangible means of expression.'50 But a minority school of thought
 holds that RAM is too transitory to constitute fixation since fixation is
 maintained only by virtue of the application of constant power.15'
     As nearly all Internet-based works, whether a Web page or an e-
 mail, are fixed at some point onto a disk,'52 the problem of fixation is
 likely to prove a strawman. However, without an express declaration
 in the law that the Internet is not a copyright-free zone where infring-
 ers are free to copy what they will, critics will likely continue to argue
 that copyright law is inapplicable to the new realities of the Internet.
           2.    The Classification of Internet Works
     Assuming that copyright protection does extend to works existing
 on the Internet, the question arises as to how these works are to be
   "4v 17U.S.C.§101.
   148 The disk is clearly a material object constituting a fixation of the Web page in a
 form it can be perceived, reproduced, or otherwise communicated from the disk for a
 period of more than transitory duration. For a discussion, see Loundy, supra note I11.
   "' RAM memory is the temporary storage memory of a computer (i.e., data typed
 on a word processing program that has not been saved onto a disk or hard drive re-
 sides). Once the computer is turned off, the contents of RAM memory are erased un-
 less saved. Id
   15o See MAI v. Peak, 991 F.2d 511 (9th Cir. 1993).
   "' See Apple Computer, Inc. v. Formula Int'l, Inc., 594 F. Supp. 617 (C.D. Cal.
 1984); see also Loundy, supra note 111 (noting that if software can be fixed by being
 downloaded into RAM memory, a written work can likewise be fixed by holding a
 book up to a mirror).
   '52 See Loundy, supra note I 11.
 classified.'53 The question is an important one because different rights
 attach to the different categories of works set forth in § 102(a).'54 How
 should a multimedia Web page, complete with text, graphics, audio
 clips and video files be classified? Clearly, such a multimedia work
 covers a wide variety of categories, from literary works (the text), to
 sound recordings (the sound clip), to even audiovisual works (the
 video clip). Multiple classifications, however, are not generally ac-
 cepted under copyright law.'55
     The courts have recognized computer programs as protected liter-
 ary works.'56 As the Web page resides as a computer file on a hard
 drive, the computer file itself, and the source and object codes respon-
 sible for their creation, may be classified as a literary work. One snag
 in this definition, however, is that a program containing a Web page
 may not qualify as a computer program under the Copyright Act. A
 computer program is defined in the 1976 Act as a "set of statements or
 instructions to be used directly or indirectly in a computer in order to
 bring about a certain result." 157 It may be disputed by some that such
 Web page files are in fact "to be used.., to bring about a certain re-
 sult." The text, audio, and visual elements of these pages reside on
 read-only files, most of which do not execute any actions on the user's
 computer and rely on other programs on the user's computer to run the
 operation, such as the user's Web browser program (Netscape, Mosaic,
   '53 Copyrighted work are classified into a variety of categories, including literary
 works, audiovisual works, and sound recordings. See 17 U.S.C. §102(a) and supra
 note 104.
   154 Sound recordings, for example, do not carry with them an exclusive right to
 perform the copyrighted work publicly. 17 U.S.C. §I 14(a). It was only very recently
 that sound recording received a right to perform the copyrighted work publicly by
 means of a digital audio transmission. See The Digital Performance Right in Sound
 Recordings Act of 1995, H.R. Rep. No. 104-274, at 12 (1995); 17 U.S.C. §106(6)
 (" [Tihe owner of the copyright under this title has the exclusive right.., in the case of
 sound recordings, to perform the copyrighted work publicly by means of a digital
 audio transmission.") Nondramatic musical works are subject to a compulsory license
 for the purpose of making and distributing phonorecords. 17 U.S.C. §115.
   '5 A music video, for example, is not both a sound recording and an audiovisual
 work. For a discussion, see White Paper, supra note 113, at 37.
   156 See Apple Computer, Inc. v. Franklin Computer Corp., 714 F.2d 1240 (3d Cir.
   '17 17 U.S.C. §101.
 [Vol 5:1
 Fall 1997]       INTERNET COPYRIGHT PROTECTION                           33
 etc.). In this sense, they are similar to the document files one views
 with a word processing program. One could argue that the certain re-
 sult they bring about is that without them, the user could not view the
 text; but in actuality these files remain purely passive, are merely acted
 upon by other programs, and do not themselves independently bring
 about a particular result.'58
     Moreover, protecting the source and object codes which constitute
 the computer program behind the Web page does not necessarily mean
 that the images, sounds, and text produced by that program are pro-
 tected as computer programs themselves.'59 These, perhaps, could be
 accorded separate protection under the single category of audiovisual
 works.'60 Not all Internet works, however, will meet the definition of a
 protected audiovisual work."6'
        See generally Loundy, supra note 122.
    159 In the case of video games, for example, the courts have drawn a distinction
 between the codes constituting the computer program, which are protectable as literary
 works, from the graphics and sound display which the video game player sees, which
 is protectable as an audiovisual work. See Stem Elecs. v. Kaufman, 523 F. Supp. 635
 (E.D.N.Y. 1981) (Defendants accused of infringing plaintiff's copyright in a video
 game argued that the only original work of authorship lay in the computer program,
 which had not been registered, and not in the video game display, which they argued
 was unprotectable as an audiovisual work. The court noted that: "While the audiovis-
 ual display emanates from the computer program, it is senseless to say that therefore
 the display is not original." The court concluded the video display could be copy-
 righted as an audiovisual work even if the underlying computer program was not copy-
 righted.); Atari, Inc. v. Amusement World, Inc., 547 F. Supp. 222 (D. Md. 1981) (re-
 jecting defendants argument that a video game display cannot be copyrighted as an
 audiovisual work . In response to defendants argument that the audiovisual display
 could not be fixed but for the computer program, the court found the display could be
 copyrighted as an audiovisual work by drawing a distinction between the work itself
 and the medium in which it is fixed); Atari, Inc. v. North Am. Philips Consumer Elecs.
 Corp., 672 F.2d 607 (1982) (noting that plaintiff's video game display was primarily
 an unprotectible game, but certain aspects of the audiovisual work, such as the charac-
 ters, were protectable).
    "6o Audiovisual works are "works that consist of a series of related images which
 are intrinsically intended to be shown by the use of machines or devices such as pro-
 jectors, viewers or electronic equipment, together with accompanying sounds, if any,
 regardless of the nature of the material objections, such as films or tapes, in which the
 works are embodied." 17 U.S.C. §101. An audiovisual work thus consists of three
 elements: 1) images, 2) which are related and presented in a series, and 3) being capa-
 ble of being shown by a machine or device. 1 NIMMER ON COPYRIGHT §2.09[A]
 34            UCLA ENTERTAINMENT LAW REVIEW                        [Vol 5:1
     As such, it seems that a court analyzing an Internet work will have
  to determine, on an individual basis, in which category the work
  should be placed."62 This however, creates a problem of uncertainty in
  that no creator of an Internet work will be sure of his rights upon crea-
  tion. For example: is a Web page introduced by text with a video
  available by clicking on a line of text two separate works (literary and
  audiovisual) or merely an audiovisual work?163 If a Web page contains
  both sound and video, is it an audiovisual work, or a separate audio-
  visual work and a separate sound recording?'64
     The elimination of categories or harmonization of rights among the
 various entities would help to ameliorate the problem of classifying
 multimedia Web works, but such a resolution is not likely to appear in
 the near future.'65
 (1997). Some courts have taken an expansive view of what can constitute an audiovis-
 ual work. See Worlds of Wonder, Inc. v. Vector Intercontinental, Inc., 653 F. Supp.
 135 (N.D. Ohio 1986); Worlds of Wonder, Inc. v. Veritel Learning Sys., Inc. 658 F.
 Supp. 351, 355 (N.D. Tex. 1986) (concluding an animated doll known as Teddy Rux-
 pin " is properly classified as an audiovisual work").
    16' An e-mail, for example, lacks the "series of related images" component re-
 quired under the definition of audiovisual works. See 17 U.S.C. §101.
    162 The White Paper suggests that the vast majority of works currently on the Inter-
 net, such as articles, essays, and other reference materials, are literary works. White
 Paper, supra note 112, at 36. The White Paper also suggests that a significant number
 of the works on the Internet are pictorial and graphic. White Paper, at 38.
    163 The definition of a literary work begins with the phrase "works other than
 audiovisual works ....." 17 U.S.C. §101. The definition however, merely illustrates
 that literary works and audiovisual works are distinct and exclusive. It does not ad-
 dress, however, whether the sound and text constituting a Web page are so related so as
 to be considered one work, or separate works classified into separate categories.
    64 The definition of "sound recordings" explicitly excludes from the category of
 sound recordings music, spoken or other sounds "accompanying a motion picture or
 other audiovisual work ....." 17 U.S.C. § 101. The definition, again, however, does
 not address at what point the visual and audio elements of a Web page are sufficiently
 related so as to constitute one work.
   165 The White Paper declined to make such a recommendation. See White Paper,
 supra note 112, at 45.
 Fall 1997]       INTERNET COPYRIGHT PROTECTION                          35
            3.   Fair Use
     Many of those who are appropriating intellectual property cur-
 rently on the Internet are justifying their actions with the fair use de-
 fense.'66 Internet users have been widely known to plunder works ex-
 isting both in fixed form outside the Internet and works existing solely
 on Internet itself, declaring their actions justified under fair use.'67
     Fair use is an affirmative defense to infringement.'68 The 1976 Act
 instructs courts to consider four factors to determine whether a use is
 fair use.169 However, the courts that have applied this four factor test
 in the context of fair use on the Internet have not left users with much
 guidance on exactly what behavior constitutes fair use.
     The courts which have dealt with the issue of fair use and com-
 puter BBS systems have uniformly rejected the defense with respect to
 the contributory and vicarious liability of the BBS operators, whom
 plaintiffs attempted to hold responsible for the conduct of subscrib-
 ers.170 However, only a few courts have addressed the fair use claim of
    "6 One      Friends    Web      page    (visited   Oct.    30,     1997)
 http://www.students.uiuc.edu/-jrubenst/friends.html, for example, justifies its taking of
 intellectual property from the show with a fair use disclaimer which reads: "The fine
 print: any images shown on any of my pages are not meant to infringe on the copywrite
 [sic] protection of NBC, Warner Brothers, People, Rolling Stone, Entertainment
 Weekly or the photographers of these images. All images are intended to be used un-
 der the 'fair use' clause of copywrite [sic] protection. This page is a SkyNet subsidi-
 ary. SkyNet, and the token human operator, Jason Rubenstein, take no responsibility
 for the content of this, or any pages linked here."
    "67 For illustrations, see Rose, supra note 144.
    168 17 U.S.C. §107 ("Notwithstanding the provisions of sections 106 and 106A, the
 fair use of a copyrighted work, including such use by reproduction in copies or phono-
 records or by any other means specified by that section, for purposes such as criticism,
 comment, news reporting, teaching..., scholarship, or research, is not an infringe-
 ment of copyright.")
    169 "In determining whether the use made of a work in any particular case is a fair
 use the factors to be considered shall include-( 1) the purpose and character of the use,
 including whether such use is of a commercial nature or is for nonprofit educational
 purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of
 the portion used in relation to the copyrighted work as a whole; and (4) the effect of the
 use upon the potential market for or value of the copyrighted work." Id
   '70 Playboy Enters., Inc. v. Frena, 839 F. Supp. at 1557-1559 ("Defendant Frena's
 use was clearly commercial .... One who distributes copyrighted material for profit is
 a user uploading copyrighted works. In Religious Technology Center
 v. Netcom, defendant Erlich justified his infringement of plaintiffs'
 copyright on the fair use basis that his purpose in using the work was
 to criticize Scientology teachings."7' The court declined to find fair
 use in that case.'72
     In cases to date, the courts have apparently disfavored the defense
 of fair use when dealing with mass copying over the Internet, largely
 focusing on such factors as the commercial nature of the copying, the
 amount of work taken, and the effect on the potential market of copy-
 righted works. But what happens with fair use when the use is not
 commercial and there is little or no market effect on a plaintiff's prod-
 uct, as is true about those Web pages in which portions of television
 shows and motion pictures are appropriated by students who impose
 no access fees? The courts have yet to answer. The only guidance to
 date is that the courts will apply the same test as in cases outside of the
 Internet context. 173
 engaged in a commercial use even if the customers supplied with such material them-
 selves use it for personal use.., the fourth factor, the effect of the use upon the poten-
 tial market is undoubtedly the single most important element of fair use .... Obviously
 if this type of conduct became widespread, it would adversely affect the potential mar-
 ket for the copyrighted work."); Sega Enters. Ltd. v. MAPHIA, 857 F. Supp. at 687
 (The purpose to help users to avoid having to buy Sega video game cartridges, the
 commercial purpose of the infringement, the entertainment nature of the infringed
 work, the copying of the entire program, and most importantly, the effect on Sega's
 potential market militated against a finding of fair use); Netcom II, 907 F. Supp. at
 1378-1381 (The commercial purpose of the use, the copying of substantial amounts of
 intellectual property, and the possibility that the postings hurt the market for plaintiffs
 work raised a genuine issue of fact as to whether there was a valid fair use defense).
   "7' Netcom 1, 923 F. Supp. at 1243.
   172 Id. at 1249. The court declared that "[i]n balancing the various factors, the
 court finds that the percentage of plaintiffs' works copied combined with the minimal
 added criticism or commentary negates a finding of fair use." Id. The court went on
 to state that although the criticism is a favored use, where that criticism consists of
 copying large portions of plaintiffs' works, the fair use defense is inappropriate. id.
   '7' Lerma IV, 40 U.S.P.Q.2d at 1574 (" ..... the new technologies .... have been
 made to fit within the overall scheme of copyright law and to serve the ends which
 copyright was intended to promote. [citation omitted]. The Internet is no exception,
 and postings on it must be judged in reference to the already flexible considerations
 which fair use affords.")
 [Vol 5:1
 Fall 1997]     INTERNET COPYRIGHT PROTECTION                      37
           4.   The Right to Reproduce Copyrighted Works
     The 1976 Act grants the owner of a copyright the exclusive right
 "to reproduce the copyrighted work in copies or phonorecords."'174
 Under this rule, unauthorized copying and placing onto the Internet of
 works existing in a fixed form other than the Internet would be pro-
 hibited, because when a printed, audio, or audiovisual work existing
 outside the Internet is scanned and uploaded onto a digital file on the
 network, a reproduction is made and the exclusive right to reproduce
 has thereby been violated."' Also under this rule, the unauthorized
 copying of a work existing on the Internet would also be prohibited
 because when the digital file comprising a Web page or other Internet
 resource is copied off the Internet and then downloaded onto print, a
 CD, or hard drive, a reproduction is made and the exclusive right to
 reproduce is again violated.176
     The analysis seems straightforward, but in reality it is much more
 problematic. The problem exists primarily because of the fact that on
 the Internet, "copying is everywhere."'77 When a user visits a Web
 site in order to view the page, an actual copy of the digital file con-
 taining the page's contents is taken from the host computer's hard
 drive and is downloaded onto the RAM memory or hard drive of the
 user's home computer.'78 Without such copying into RAM, no screen
 display would be possible on the user's computer.179 Thus, even if
 somehow a user does not download the Web page onto a hard drive,
 and even if the user is only viewing an official Web page containing
 no infringing material and to which the copyright owner has granted
   174 17 U.S.C. §106(1).
   "7 See White Paper, supra note 112, at 65.
   176 See id
   '17 James A. Powers, Intellectual Property in Cyberspace: The Next Frontier, THE
 CONNECTICUT LAW TRIBUNE, Oct. 16, 1995, at S9.
   171 Id Similarly when you forward an e-mail to a colleague, "you are copying the
 message and replicating the original author's work, which is technically in violation of
 the author's copyright. The Internet actually requires copying to operate effectively;
 there are simply too many users demanding access to the same information to allow
 them to line up and wait to gain access." Id.
   " See White Paper, supra note 112 at 65.
 access, to utilize the Web page that user must still create a "reproduc-
 tion" which would violate the technical language of the 1976 Act.'8
     The issue is made much more problematic in light of the fact that
 if copying into RAM memory is considered fixation, then the viewing
 of a single Internet work will require reproduction on a wide variety of
 computers. An e-mail being sent over the Internet, for example, is re-
 produced on the RAM and hard drives of a whole host of computers.
 It first resides in the RAM of the senders's PC, is then transferred to
 the RAM of the internet access provider computer, and then is traded
 from computer to computer all the way down the Internet (sometimes
 being copied onto hard drives or equivalent devices) until it reaches
 the RAM of the receiver's PC.8'
     Thus, without a clarification of what actions constitute copying in
 violation of a copyright owner's exclusive right to reproduce, it is con-
 ceivable that a variety of Internet users will technically be construed as
 violating the copyright owner's right. This will be true even if the
 Internet use is doing no more than viewing a copyrighted Web page to
 which access has been granted by the copyright owner,
     Perhaps what could be determined is that the copyright owner, by
 placing a work on the Internet, grants an implied license to an Internet
 user to view the work, including the right to make whatever multiple
 reproductions are necessary for viewing. Such an implied license,
 however, has no statutory basis, nor has it been created by case law.
 The scope of the implied license is therefore ambiguous: does the
 copyright owner grant the Internet user a right to view, to download a
 copy onto the hard drive for a specified period of time, to post onto the
 Internet or forward by e-mail, or even to make printed copies? The is-
 sue of hyperlinks, which make the Internet what it is today, further
   180 In order to be a violation of the exclusive right, however, the reproduction must
 be made in "copies" or "phonorecords". 17 U.S.C. §106(1). Copies and phonore-
 cords, in turn, are defined as "material objects in which a work is fixed". 17 U.S.C.
 § 101. As explained above, however, a work is fixed only when "its embodiment in a
 copy or phonorecord... is sufficiently permanent or stable." 17 U.S.C. § 101. As it is
 explained above, it is unclear under current law whether downloading a copy of a Web
 page file onto RAM can be sufficiently permanent or stable to constitute fixation. If
 there is no fixation, there is no copy, and if no copy is made, the exclusive right to re-
 produce is not violated.
   1"1 See Elmer-Dewitt, supra note 8.
 [Vol 5:1
 Fall 1997]      INTERNET COPYRIGHT PROTECTION                       39
 complicates the issue. By posting a work on the Internet, does the
 copyright proprietor consent to another Web page owner hyperlinking
 to his page?
           5. . The Right to Distribute Copies Or Phonorecords
     The 1976 Act grants a copyright owner the exclusive right "to
 distribute copies or phonorecords of the copyrighted work to the pub-
 lic by sale or other transfer of ownership, or by rental, lease or lend-
 ing." 182
     With respect to the right to reproduce, it is unclear whether the
 fixation of works on the Internet is too temporary to constitute a
 "copy.", 83 In Playboy Enterprises Inc. v. Frena, for example, where
 the BBS operator was found to have violated the plaintiffs exclusive
 right to distribute copies, the only objects the BBS operator distributed
 were the electronic images of the Playboy photographs which may or
 may not have been downloaded onto users' hard drives or floppy disks
 for more than a temporary time period."' To be a "copy," however, a
 work must be "sufficiently permanent or stable to permit it to be per-
 ceived, reproduced, or otherwise communicated for a period of more
 than transitory duration." '5
     The issue is complicated by the definition of "copies" in the 1976
 Act. The Act defines "copies" as "material objects."'186 Over the
 Internet, however, there is no distribution of any material object, only
 the transmission of digital images. In Playboy Enterprises, Frena re-
   182 17 U.S.C. § 106(3).
   183 See discussion regarding the requirements of fixation, supra at 30-3 1.
   'u Playboy Enters., Inc. v. Frena, 839 F. Supp. at 1556.
   ... 17 U.S.C. §101 (definition and requirement of fixation).
   186 "'Copies' are material objects, other than phonorecords, in which a work is
 fixed by any method now known or later developed, and from which the work can be
 perceived, reproduced, or otherwise communicated, either directly or with the aid of a
 machine or device. The term 'copies' includes the material object, other than a phono-
 record, in which the work is first fixed." 17 U.S.C. § 101. Additionally, phonorecords
 are defined as "material objects in which sounds, other than those accompanying a
 motion picture or other audiovisual work, are fixed by any method now known or later
 developed, and from which the sounds can be perceived, reproduced or otherwise
 communicated, either directly or with the aid of a machine or device. The term 'phon-
 orecords' includes the material object in which the sounds are first fixed." Id
 tained and did not distribute the material manifestation of the in-
 fringement-the hard drive on which these images were located.187
     The exclusive right to distribution seems to be limited to distribu-
 tion of physical objects occurring "by sale or other transfer of owner-
 ship, or by rental, lease or lending." These terms may not cover
 situations in which only the digitized images are transmitted. Moreo-
 ver, as most Internet works currently available are being given away
 for free, such files are not being sold, rented, leased, or lent, and there
 is no transfer of ownership occurring as a BBS owner like Frena
 would retain the original fixation-the hard drive on which the digit-
 ized files are located.
     When section 106(3) was originally drafted, only the distribution
 of physical copies was contemplated.'88 Despite the fact that at least
 one court has recognized that the distribution right applies to files
 transferred over the Internet,'89 "it is not clear under the current law
 that a transmission can constitute a distribution of copies or phonore-
 cords of a work." 190
     Finally, the scope of the application of the distribution right is un-
 clear. In Playboy Enterprises, Inc. v. Frena, for example, BBS op-
 erator Frena was found to have violated plaintiffs exclusive right to
 distribute copies despite the fact that no evidence existed that Frena
 himself had engaged in the unauthorized uploading or downloading of
 copyrighted files.'91 In contrast, the court in Religious Technology
 Center v. Netcom II declined to hold the BBS operator and Internet ac-
 cess provider liable for violating the right to distribute. Rather the
 court found that the defendants could only be held contributorily liable
 for assisting Erlich's violation of the exclusive right to reproduce.'92
   187 Playboy Enters., Inc. v. Frena, 839 F. Supp. at 1556. For further discussion, see
 Loundy, supra note I11.
   188 Id.
   `9 Playboy Enters., Inc. v. Frena, 839 F. Supp. at 1556 (Plaintiff's right "under 17
 U.S.C. §106(3) to distribute copies to the public has been implicated by Defendant
 Frena .... There is no dispute that Defendant Frena supplied a product containing un-
 authorized copies of a copyrighted work. It does not matter that Defendant Frena
 claims he did not make the copies itself.").
   "90 See White Paper, supra note 112, at 213.
   '9' Playboy Enters., Inc. v. Frena, 839 F. Supp. at 1556.
   192 Netcom II, 907 F. Supp. at 1368.
 [Vol 5:1
 Fall 1997]     INTERNET COPYRIGHT PROTECTION                     41
 Under what circumstances will the exclusive right to distribute copies
 be found to have been violated?
           6. The Right to Perform or Display a Work Publicly
     The 1976 Copyright Act grants to the owner of a copyrighted
 work, other than a sound recording, the exclusive right "to perform the
 copyrighted work publicly,"'93 or in the alternative, "to display the
 copyrighted work publicly." 194
     The primary problem with the right to public performance and dis-
 play is that the exact scope of the right is ambiguous: should any or
 all Internet transactions be characterized as performances or dis-
 plays?"95 For works existing in a fixed form outside the Internet, the
 question becomes whether the Internet user who uploads the copy-
 righted work, and the BBS operator, Internet access provider, or host
 computer provider, violate the display rights of the copyright owner by
 giving the public unauthorized access to the work over the Internet?
 For works existing in a fixed form exclusively on the Internet (as no
 original hard copy outside of the Internet exists), the question is
 whether the Internet user who copies a copyrighted Web site 'displays'
 or 'performs' the copyrighted work when he either downloads the
 work onto another medium (e.g., by printing the web page and repro-
 ducing it in a newsletter) or uses it in creating his own Web site?
     In Playboy Enterprises, Inc. v. Frena, the court held the defendant
 BBS system operator liable for publicly displaying Playboy's pictures,
 despite the fact that it was the users on his system that had uploaded
 and downloaded the Playboy pictures.'96 Some critics, however, have
 called the case one of "questionable accuracy," arguing that the
 transmissions should be defined merely as copies of digitalized files,
 rather than actual displays or performances (as television signals
 would be defined). Thus these critics claim that this is a violation of
 the right to distribute copies by the user who uploaded the work origi-
   193 17 U.S.C §106(4).
   194 17 U.S.C. §106(5).
   " See White Paper, supra note 112 at 70.
   '96 Playboy Enters., Inc. v. Frena, 839 F. Supp. at 1557. ("The display right pre-
 cludes unauthorized transmission of the display from one place to another, for exam-
 ple, by a computer system.")
 nally, not the BBS system.'97 Citing this rationale, the court in Relig-
 ious Technology Center v. Netcom II refused to find a violation of the
 right to display by the Internet access provider or BBS operator.'gs
     The courts are far from uniform as to when exactly the display and
 performance rights are violated. This has led to the confusing result in
 which some defendants have been found to have violated the right for
 the very same conduct for which other defendants have been absolved
 of liability.
     Perhaps at the heart of this confusion is the unresolved issue of
 what exactly is occurring over the Internet in these situations-are
 copies of digitized computer files being distributed to other users or
 are the digitized files merely a means of accomplishing a transmission
 of a performance or display (as is the case with television).'99 The
 fundamental problem remains that the distinction of rights provided
 for in section 106 was meant to apply to physical copies of works, and
 did not foresee the new mechanisms of distribution presented by the
 Internet. It remains to be seen whether the old distinctions prove
 flexible enough to adapt to new realities, or whether a new means of
 analyzing what is being transmitted over the Internet is needed.
           7.   The Definition of Publication
     With the expansion of federal copyright protection to unpublished
 works in the 1976 Act, the distinction between published and unpub-
 lished works has lost its "all-embracing importance."200    However,
 publication is still an important concept because publication: (1) sets
 the duration of copyright protection for works for hire and anonymous
 works,20' (2) triggers a deposit requirement with the Library of Con-
   197 See Loundy, supra note Ill.
   'g Netcom II, 907 F. Supp. at 1371. The court argued Playboy was "factually dis-
 tinguishable" and that "[n]o purposes would be served by holding liable those who
 have no ability to control the information to which their subscribers have access ......
   1   See Loundy, supra note 111.
   200 White Paper, at 29. Under the 1909 Copyright Act, federal copyright protection
 was available only to published works. Copyright Act of 1909, ch. 320, § 9, 61 Stat.
 652 (current version at 17 U.S.C. § 101). Unpublished works were protected by state
 common law copyright. Id at §2.
   201 17 U.S.C. § 302(c).
 [Vol 5:1
 Fall 1997]      INTERNET COPYRIGHT PROTECTION                        43
 gress,2°2 (3) narrows the scope of the fair use defense,2°3 and (4) allows
 certain limitations on the exclusive rights of a copyright owner.2°4
     Currently, though, the Act only contemplates publication in terms
 of sale, rental, lease or lending.2"5 The language may or may not cover
 transmissions occurring over the Internet. As the original program and
 the images it produces continue to reside on the copyright owner's
 server, nothing physical is being exchanged-there is not a sale, rental,
 lease or lending of any object. The question thus becomes: Does the
 definition of publication cover this new method of digitized transmis-
 sion, especially where many such transmissions are made free, without
 charge or cost to the user?
            8.   Importation
     The 1976 Act prohibits the importation of certain infringing copies
 or phonorecords of a copyrighted work.206 However, it is unclear
 whether, given the emphasis on copies or phonorecords (defined as
 "material objects" in §101) in section 602(a), a work can be imported
 into the United States by transmission.207 Nothing "material" is being
 brought into the country over the Internet, as the original hard drive
 and programs remain on the sender's computer. There is room for ar-
 gument, therefore, that section 602(a) does not apply to digital trans-
 missions received in the United States over the Internet from abroad.
   202 17 U.S.C. § 407.
   203 The fact that a work is unpublished weighs against a finding of fair use. Harper
 & Row Publishers, Inc. v. Nation Enters., 471 U.S. 539 (1985).
   204 See, e.g., 17 U.S.C. § 118 (compulsory license is available for the use of certain
 published works in connection with noncommercial broadcasting).
   205 "'Publication' is the distribution of copies or phonorecords of a work to the
 public by sale or other transfer or ownership, or by rental, lease or lending. The offer-
 ing to distribute copies or phonorecords to a group of person for purposes of further
 distribution, public performance, or public display, constitutes publication." 17 U.S.C.
 § 101.
   206 "Importation into the United States, without the authority of the owner of copy-
 right under this title, of copies or phonorecords of a work that have been acquired out-
 side the United States is an infringement of the exclusive right to distribute copies or
 phonorecords under section 106, actionable under section 501." 17 U.S.C. § 602(a).
   207 See White Paper, supra note 112, at 107. "Copies" and "phonorecords" are
 defined as "material objects" by the 1976 Act. 17 U.S.C. § 101.
     This ambiguity in the law might lead to the strange result that the
 importation of certain CDs would be prohibited, but the importation of
 the same digitized recording over the Internet from which CDs could
 be manufactured domestically might not be precluded.
          9.    Contributory and Vicarious Liability
     Another ambiguity in current copyright law is the extent to which
 BBS operators, Internet access providers, online service providers, and
 host servers will be held liable for the actions of users uploading and
 downloading information over the Internet. Can a university, for ex-
 ample, be held liable for the actions of a student who infringes a copy-
 right by placing unauthorized photographs on a Web page located on
 the university's UNIX computer? Or can America Online be held li-
 able for the infringing e-mail of a subscriber? The case law which
 does exist seems to be split on this issue.
     In Playboy Enterprises, Inc. v. Frena, BBS operator Frena was
 found liable for violating the exclusive rights of Playboy to distribute
 copies and to display the underlying copyrighted works.2"' In Sega
 Enterprise Ltd. v. MAPHIA, a preliminary injunction was granted
 against BBS operator Scherman and the BBS itself on the basis that
 the plaintiff had established "a likelihood of success on the merits of
 showing a prima facie case of direct and contributory infringement by
 Defendants' operation of the MAPHIA bulletin board," but the court
 declined to elaborate the exclusive rights which were directly vio-
     In Religious Technology Center v. Netcom II, however, the court
 declined to find the Internet access provider and BBS operator directly
 liable for violating the exclusive rights of the copyright owner on the
 basis that "although 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 create a copy by a third party.""21
 The court rejected the holding in Playboy arguing that "the storage on
 a defendant's system of infringing copies and retransmission to other
   208 Playboy Enters., Inc. v. Frena, 839 F. Supp. at 1556.
   209 Sega Enters., Ltd. v. MAPHIA, 853 F. Supp. at 686.
   210 Netcom II, 907 F. Supp. at 1370.
 [Vol 5:1
 Fall 1997]      INTERNET COPYRIGHT PROTECTION                       45
 servers is not a direct infringement."21' The court distinguished the
 Sega case on the basis that the finding of direct infringement was en-
 tirely conclusory and that the Sega court's reference to the knowledge
 of the defendant indicates that the Sega court was focusing on con-
 tributory infringement, as knowledge is not an element of direct in-
 fringement.2"2 The court even expressed reservation as to whether ei-
 ther defendant could be held liable for contributory infringement, but
 declined to grant summary judgment on the basis that this was a ques-
 tion of fact for a jury to decide.213
     Thus, the law remains unclear both as to whether Internet access
 providers will be held responsible for the actions of their subscribers,
 and, if they should be found so liable, under what theory of liability a
 court will base its ruling. The liability of Internet access providers is
 but one of a whole host of ambiguities which exist with respect to
 copyright law and the Internet. Without clarification of these ambi-
 guities, it will be difficult for the owners of intellectual property and
 other copyrighted material on the Internet to know when their rights
 are being violated and when they should bring suit for the enforcement
 of those rights.
           10.   Jurisdictional Issues
     The fact that the Internet is vast and without boundaries has raised
 the possibility that Internet content providers may be subject to legal
 liability in the various jurisdictions from which their web sites may be
   211 Id.
   212 Id. at 1371.
   213 Id. at 1374.
   214 Peter Brown, New Issues in Internet Litigation, 17TH ANNUAL INSTITUTE ON
 COMPUTER LAW 151, 177 (PLI ed., 1997). The power of a court to render a valid per-
 sonal judgement over a non-resident defendant is limited by both state law and the Due
 Process Clause of the Fourteenth Amendment to the U.S. Constitution. Id at 178. The
 traditional test for determining jurisdiction under the Due Process Clause focuses on
 whether a defendant has sufficient minimum contacts with the state of jurisdiction to
 satisfy the requirements of the Fourteenth Amendment. Intemat'l Shoe Co. v. Wash-
 ington, 326 U.S. 310 (1945). Three prongs exist to the minimum contacts test: 1) de-
 fendant must have purposefully availed itself of the privilege of doing business in the
 forum state, thus invoking the benefits and protections of the state's laws, 2) the cause
     The United States courts which have examined this issue to date
 have held that mere electronic contacts with the forum state can be
 sufficient to establish the necessary minimum contacts to create juris-
 diction within a given state or court.2"5 The extent to which electronic
 contacts are required to trigger jurisdiction, however, remains un-
 clear.2"6 Due to the lack of a clear signal from the courts as to when
 electronic contacts will be sufficient, Web page operators have little
 guidance as to what conduct may subject them to infringement litiga-
 tion in any of the 50 states.
     The problem is further compounded by the fact that the Internet is
 international in scope, having no borders or boundaries. Not only do
 American content providers face the risk that their content can be in-
 fringed by Internet sites in far-off nations, but they themselves may be
 subject to infringement suits in countries that favor their own nationals
 or that have different copyright standards, merely by placing a work
 on the Internet.
 of action must arise from the defendant's activities with respect to the forum state, and
 3) the exercise of personal jurisdiction must comport with traditional notions of fair
 play and substantial justice. Id
    215 See CompuServe, Inc. v. Patterson, 89 F.3d 1257 (6th Cir. 1996) (finding that a
 Texas Internet user's contract with Ohio's CompuServe to distribute his software over
 the Internet constituted a sufficient basis for an Ohio federal court to exercise jurisdic-
 tion in a suit by CompuServe against the user); Panavision Internat'l v. Toeppen, 938 F.
 Supp. 616 (C.D. Cal. 1996) (holding that, in a trademark infringement suit in Califor-
 nia, nonresident defendant who registered a domain name for purpose of extracting
 money from California plaintiff was subject to personal jurisdiction); Inset Systems,
 Inc. v. Instruction Set, Inc., 937 F.Supp. 161 (D. Conn. 1996) (holding that, in a trade-
 mark infringement suit, sufficient minimum contacts existed where defendant's sole
 contact with forum was the use of the "Inset.com" domain name and the use of a toll
 free number containing the disputed trademark "Inset").
   216 Bensusuan Restaurant Corp. v. King, 937 F. Supp. 295 (S.D.N.Y. 1996) (find-
 ing insufficient minimum contacts with the forum where defendant's sole contact with
 that forum was the existence of a site on the Web. Plaintiff, the owner of the New
 York club "Blue Note," maintained the defendant's use of the name "Blue Note" for
 defendant's Missouri club infringed the trademark in that name. The court stated that
 creation of a site on the Web, despite knowledge that New York residents might view
 it, "without more... is not an act purposefully directed toward the forum state" and
 hence insufficient to establish jurisdiction.)
 [Vol 5:1
 Fall 1997]       INTERNET COPYRIGHT PROTECTION                            47
             11.    The International Scope of the Internet
     The problem of international jurisdiction is again compounded by
 the fact that the copyright laws of the various nation states are not
 standardized.2 7   The United States and other common law countries
 emphasize promoting the creation of new works for the public benefit
 by protecting the author's economic rights.21 8 This philosophy has led
 to the creation of such copyright concepts as a corporation being able
 to hold a copyright and the work-for-hire doctrine. Countries that
 follow the civil law tradition regard an author's rights (droit d'auteur)
 as natural human rights, or part of one's right of personality.2"9 With
 such divergent theoretical bases, the two systems often come into con-
 flict, providing different levels of protection for differing works.220 As
    237 Developing countries, for example, traditionally have had inadequate or nonex-
 istent copyright protection measures for the creative original works of foreign authors.
 Benjamin R. Kuhn, A Dilemma in Cyberspace and Beyond: Copyright Law for Intel-
 lectual Property Distributed Over the Information Superhighways of Today and To-
 morrow, 10 TEMP. INT'L & COMP. L.J. 171, 197 (Spring, 1996).
    238 See White Paper, supraNote 112, at 133.
    219 Id, at 133-134.
    220 The droit d'auteur tradition, for example, protects an author's moral rights, in-
 cluding the right of the author to be named as the author of a work he created and the
 right to object to uses of the work which could bring dishonor or discredit on the
 author's reputation, a concept largely rejected by the American system. Id From hese
 divergent theoretical bases also arises the concept of neighboring rights. Id at 134.
 Neighboring rights are those rights applied to the producers of phonograms, producers
 of motion pictures, performers, and broadcasters. Id Under the United States copy-
 right system, these entities are considered authors holding those rights extended to
 other authors under federal copyright law. Id A sound recording is thus protected un-
 der the federal copyright system. Id. Under the droit d'auteur tradition, however, such
 producers' and performers' rights would be protected as neighboring rights. Id
 Neighboring rights, while similar in character to author's rights, may be protected at a
 lower level than authors' rights and are entirely separate and distinct from the higher-
 level rights granted to authors. Id
      The problems presented by a motion picture to the droit d'auteur tradition are
 severe. A motion picture is created by a whole host of producers, directors, writers,
 cinematographers, actors, and engineers. While the United States resolves the problem
 through the work for hire doctrine (copyright rests with the corporation that commis-
 sioned the work), the logic of the droit d'auteur holds that rights should rest with all
 these creators and the rights thus become problematic to implement. For further dis-
 cussion, see Stephen Fraser, The Copyright Battle: Emerging International Rules and
 the Internet is now a global phenomenon, use of the Internet might re-
 sult in the unknowing infringement of the copyright laws of various
     Attempts have been made, however, to standardize international
 copyright law. The 1886 Berne Convention (the most current text be-
 ing the Paris Act of July 24, 1971) is the premier and most universal
 attempt at standardization.222 The Berne Convention is rooted in two
 related  principles-" national    treatment"   and    "minimum      stan-
 dards." 223 National treatment means that authors should enjoy in other
 countries the same protection for their works as those countries accord
 their own authors.224 Minimum standards are those protections which
 member states must accord to authors in other Berne countries.225
     Sound recordings are currently protected by two multilateral con-
 ventions: The Convention for the Protection of Producers of Phono-
 grams Against Unauthorized Duplication of Their Phonograms (Ge-
 neva 1971), to which the United States has belonged since March 10,
 1974, and the International Convention for the Protection of Perform-
 ers, Producers of Phonograms and Broadcasting Organizations (Rome
 Roadblocks on the Global Information Infrastructure, 15 J. MARSHALL J. COMPUTER
 & INFO. L.J. 759, 770 (Summer 1997).
   221 Id at 765.
   222 4 NIMMER ON COPYRIGHT § 17.01 [B] (1997). Due to the Berne Convention's
 rejection of copyright protections based on formalities, The United States, unwilling to
 discard the idea of copyright notice that set it apart among all the world's principal na-
 tions, refused to join Berne until the close of the 1980's. Id.
   223 Id
   224 Id.
   225 Id. The Berne Convention grants the authors of "literary and artistic works"
 the exclusive right of authorizing the reproductions of such works, in any manner or
 form. Berne Convention, Paris Text of July 24, 1971, art. 9. The Berne Convention
 defines "literary and artistic works" to include virtually all categories of works listed in
 17 U.S.C. § 102, including cinematographic works, but excepting, notably, sound re-
 cordings. Id. at art. 2. The Berne Convention provides for additional protections such
 as a minimum copyright term (Article 7), the right to make translations (Article 8), a
 right to broadcast (Article 11 bis), a right of recitation for literary works (Article 11
 ter), a right of public performance for dramatic and musical works (Article 11), a right
 to cinematographic adaptation (Article 14) and a right of seizure of infringing copies
 (Article 16).
 [Vol 5:1
 Fall 1997]     INTERNET COPYRIGHT PROTECTION                    49
 1961), to which the United States does not adhere.226 Additional pro-
 tections for all types of works are found in regional treaties227 and
 through the World Trade Organization's TRIPs Agreement.228
     Despite these attempts at harmonization, however, conflicts remain
 among the various national systems.229 These conflicts are made more
 severe by ambiguities presented to copyright law by the Internet.
     The twin problems of the likelihood of infringement and ambigui-
 ties in copyright law presented by the Internet dictate that if entertain-
 ment works are to be sufficiently protected, a radical plan of action is
 needed by the Motion Picture and Television Industry. The ideal plan
 of action would encompass legislative reform, enforcement through
 litigation, contractual protections, and technological development.
 The focus of the plan of action would center on public education and
 awareness- educating the public that intellectual property protections
 are applicable to the medium of the Internet.
 A.    The Need for Public Education
     When the software industry began, "it was a whole new industry,
 making a product so different from anything ever seen before that the
 old rules did not seem to apply." 230 The early software ethic "was a
 sort of freemasonry, and copying of software was approved by most
 people."23' The software industry did not move to enforce its intel-
 lectual property rights, and in doing so lost the opportunity to educate
 the public as to the protections accorded computer programs under
   226 4 NIMMER ON COPYRIGHT § 17.01[B][3] (1997).
   227 Id.
   228 See discussion in Fraser, supra note 220, at 766.
   229 See White Paper, supra note 112, at 132.
   20 Speech by William S. Strong presented at the Annual Meeting of The Associa-
 tion of American University Presses (June 17, 1994), in COPYRIGHT IN THE NEW
   231 Id
 copyright law.232 Today, software piracy is a major problem both do-
 mestically and globally.
     A similar problem exists today with the Internet as existed with the
  software industry when it first burgeoned. For one thing, as one
  author has put it, "[it] is fair to say that the great majority of Ameri-
  cans are entirely ignorant of how copyright works, where it came from
  or why we have it. That is correctable." 233 For another, a large part of
  the Internet community basically regards everything placed on the
  Internet as being fair game for copying and within the public do-
  main.234 The pre-commercial users of the Internet seem to feel that the
  Internet was their territory prior to the entry of commercial forces such
  as the Industry onto the network, and thus they firmly believe that the
  new entrants must play by their rules if they wish to gain access to the
  B.   The Nil Legislation
     In February 1993, President Clinton formed the Information Infra-
 structure Task Force (IITF) to articulate and implement the Admini-
 stration's vision for the National Information Infrastructure (NII)--
 the information superhighway of the future that will include the Inter-
 net.236 The IITF was chaired by the late Secretary of Commerce
 Ronald H. Brown, and it consisted of high-level representatives of the
 Federal agencies that play a role in advancing the development and
 application of information technologies.237 Under the rubric of the
 IITF, a Working Group on Intellectual Property, chaired by Assistant
 Secretary of Commerce and Commissioner of Patents and Trademarks
 Bruce A. Lehman, was established to examine the intellectual property
 implications posed by the formation of the NIl, and to make recom-
   232 Id
   233 Id
   234 Barlow, supra note 115.
   235 Philip Elmer-Dewitt, Battle for the Soul of the Internet, TIME, July 25, 1994, at
   236 See White Paper, supra note 112, at 1.
   237 i7J
 [Vol 5:1
 mendations on any appropriate changes to U.S. intellectual property
 law and policy."38
     In September, 1995, the Report of the Working Group on Intel-
 lectual Property, now known as the "White Paper" was issued.239 The
 White Paper made numerous legislative recommendations. Many of
 these recommendations were incorporated into House Resolution
 2441: The Nil Copyright Protection Act, introduced in Congress on
 September 29, 1995, by Representative Carlos Moorhead (R-CA).
     Some of the amendments to the 1976 Copyright Act proposed by
 H.R. 2441 included:
     -Amending the right of distribution to make clear the concept that
 copies can be distributed by transmission.24°
     -Amending the definition of publication to make it clear that a
 work can be published by transmission.24
     -Amending the definition of "to transmit" to recognize that both
 copies of works and performances can be transmitted.2
     -Amending the prohibitions on the importation of certain works in
 order to recognize that works can be imported by transmission.243
     -Prohibiting the manufacture and importation of devices designed
 to circumvent copyright protection systems.244
   238 Id. at 2.
   239 Id
   240 ",§ 106(3) of Title 17, United States Code, has been amended by striking 'or by
 rental, lease, or lending' and inserting 'by rental, lease, or lending, or by transmis-
 sion.' H.R. REP. No. 2441, 104th Cong., 1st Sess. §2(a).
   241 "§ 101 of Title 17, United States Code, is amended in the definition of 'publica-
 tion', by striking 'or by rental, lease, or lending' in the first sentence and inserting 'by
 rental, lease, or lending, or by transmission."' H.R. REP. No. 2441, at §2(b)(1).
   142 "To 'transmit' a reproduction is to distribute it by any device or process
 whereby a copy of [sic] phonorecord of the work is fixed beyond the place from which
 it was sent." H.R. REP. No. 2441, at §2(b)(2).
   243 "Importation- Section 602 of Title 17, United States Code, is amended by in-
 serting 'whether by carriage of tangible goods or by transmission', after 'importation
 into the United States."' H.R. REP. No. 2441, at §2(c).
   244 Adds new §1201 to Title 17 reading "No person shall import, manufacture, or
 distribute any device, product, or component incorporated into a device or product, or
 offer or perform any service, the primary purpose or effect of which is to avoid, by-
 pass, remove, deactivate, or otherwise circumvent, without the authority of the copy-
 Fall 1997]
     -Prohibiting the removal of copyright management information.215
     -Providing for civil and criminal penalties for the manufacture and
 importation of devices designed to circumvent copyright protection
 systems and for the removal of copyright management information.
     The bill was filed in both the United States House of Representa-
 tives and in the Senate.27 The bill had the full support of the Motion
 Picture and Television Industry, which regarded it as a positive step
 forward towards protecting intellectual property rights on the Inter-
 net.28 The bill, however, never came to a vote in the last Congress,
 due largely from pressure from a coalition of computer industry entre-
 preneurs, fair use advocates, privacy groups, librarians and educa-
 right owner or the law, any process, treatment, mechanism, or system which prevents
 or inhibits the violation of any of the exclusive rights of the copyright owner under
 section 106." H.R. REP. No. 2441, at §4.
    245 Adds new §1202(b) to Title 17 reading "Removal or alteration of copyright
 management information- No person shall, without authority of the copyright owner
 or the law (I) knowingly remove or alter any copyright management information, (II)
 knowingly distribute or import for distribution copyright management information that
 has been altered without authority of the copyright owner of the law, or (III) knowingly
 distribute or import for distribution copies or phonorecords from which copyright
 management information has been removed without authority of the copyright owner
 or the law." Also adds new § 1202(c) reading "Definition- As used in this chapter,
 'copyright management information' means the name and other identifying informa-
 tion of the author of the work, the name and other identifying information of the copy-
 right owner, terms and conditions for uses of the work, and such information as the
 Register of Copyrights may prescribe by regulation." H.R. REP. No. 2441, at §4.
   246 Adding § 1203 to Title 17 of the United States Code outlining civil remedies and
 adding §1204 to Title 17 of the United States Code outlining criminal penalties. H.R.
 REP. No. 2441, at §4.
   247 House Resolution 2441 and Senate Bill 1284, respectively.
   248 Jack Valenti, Chairman and CEO of the Motion Picture Association of Amer-
 ica, stated while testifying before Congress on H.R. 2441: "I think that the bill is just
 fine the way it is... You shouldn't be monkeying too much with current law and
 that's why I think this bill has a clarity about it that I find admirable, and my recom-
 mendation is that it should go forward ...... Hearing of the Court and Intellectual
 Subcommittee of the House Judiciary Committee, FEDERAL NEWS SERVICE, 104th
 Cong., 2d Sess. (Feb. 7, 1996) (statement of Jack Valenti, Chairman and CEO of Mo-
 tion Picture Association of America, Inc.)
 [Vol 5:1
 Fall 1997]     INTERNET COPYRIGHT PROTECTION                    53
 tors.249 This coalition was joined by some telecommunications com-
 panies and Internet providers which feared exposure to liability for the
 actions of their customers and, ultimately, the responsibility for polic-
 ing the Internet.25"
     The effort to amend the 1976 Copyright Act represented a positive
 step at resolving the ambiguities in American copyright law. House
 Resolution 2441 ensured that the right to distribute copies would have
 applied fully to Internet-based works. House Resolution 2441 clari-
 fied the definition of "publication" to encompass electronic publica-
 tion, and clarified the definition of "transmit" to make it clear that a
 reproduction can be transmitted. House Resolution 2441 strengthened
 importation protections, encouraged technological protection for in-
 tellectual property, and protected copyright management information.
     Nevertheless, House Resolution 2441 was not without its short-
 comings. It left a whole host of copyright issues without clarification,
     -House Resolution 2441 never made clear whether copyright pro-
 tection would extend to works created and fixed in tangible form for the
 first time on the Internet;
     -House Resolution 2441 never made clear how such Internet based
 works will be classified-as multimedia forms of expression or as com-
 puter programs;
     -House Resolution 2441 did not specify whether downloading a
 computer program into RAM constituted fixation of a work;
     -House Resolution 2441 did not resolve the contradiction between
 the Playboy and Netcom cases as to exactly which § 106 exclusive rights
 are violated when an infringing work is transmitted across the Internet.
 Is such an action a violation of the right to reproduce, the right to dis-
 tribute copies, or the right to display or perform a work publicly?
    -House Resolution 2441 did not address the issue of the reproduc-
 tion right. As demonstrated in Part III, the Internet exists on copying.
 An authorized user viewing a copyrighted Web page with permission
   249 Ana Radelat, Devil or Angel?, CALIFORNIA LAWYER, at 27 (June 1997).
   250 Id at 28.
 may nevertheless violate the reproduction right of the copyright owner
 since his PC must necessarily make a copy to view the document.
     -House Resolution 2441 did nothing to clarify the confusion be-
 hind what types of Internet uses will be considered fair use and which
 will be considered infringements.
     -House Resolution 2441 did not resolve the conflicting holdings of
 the Playboy and Netcom courts as to the extent to which online service
 and Internet access providers will be held liable for the copyright viola-
 tions of its users.
     Bruce Lehman has responded to criticism of the Working Group's
 failure to address these issues by claiming that the omissions are not
 major concerns. He has stated, "The marketplace will respond to some
 of these issues."25' As to the assertion that a user's viewing of a Web
 page will infringe the reproduction right of the copyright owner, for in-
 stance, Lehman has stated that the market will lead to the creation of li-
 censing rights to allow such viewing.252 The argument presupposes that
 if Internet content providers are to establish a market, they will be forced
 to work out a legal arrangement whereby users will be licensed the right
 to download a document into RAM to view it and whereby users might
 even be granted "browsing rights" under which they can preview
 documents before deciding whether to purchase and reproduce the
 document in total.253 Should such an arrangement fail to materialize,
 Lehman argues that the courts will likely step in and declare such usage
 fair use, or in the alternative the issue can be clarified through subse-
 quent legislation.254 Lehman maintains, however, that despite the omis-
 sions, H.R. 2441 was a good initial first step.255
     House Resolution 2441 was important, however, not for the ambi-
 guities in copyright law, but for its educational value. House Resolution
 2441 would have served to heighten the public awareness of copyright
 law and encouraged a dialogue with Internet users as to their rights and
   251 Interview with Bruce Lehman: Lehman Hears His Critics But Doesn't Buy it
 All, INFO L. ALERT: A VOORHEES REP. (Dec. 9, 1994).
   252 Id
   253 Id
   254 See White Paper, supra note 112, at 29.
   255 Id
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 Fall 1997]      INTERNET COPYRIGHT PROTECTION                       55
 obligations. House Resolution 2441, however, was most important for
 the signal it would have sent to the Internet community that the federal
 government does consider copyright law to exist on the Internet, and
 that it intends for intellectual property rights to be enforced and re-
 spected on the Nil.
 C.     The WIPO Copyright Treaties
     In December 1996, the World Intellectual Property Organization
 (WIPO) held a three week conference to discuss proposals for modify-
 ing international copyright law.256 Three draft treaties were considered:
 1) the Copyright Treaty supplementing the Beme Convention, 2) the
 Performances and Phonograms Treaty supplementing the Rome Con-
 vention and 3) the Database Protection Treaty seeking to extend copy-
 right protection to computer databases."7 On December 20, 1996, the
 conference approved the first two of these treaties.2
     Bruce Lehman, at the conference announcing adoption of the trea-
 ties, stated: "These treaties we've been working on will be the comer-
 stone of international economic law for the information and technologi-
 cal age of the 21st century."259 Stymied in Congress, Lehman, as he has
 put it, was given "a second bite of the apple," accomplishing through
 international treaties what could not be done in the House of Represen-
     The Copyright Treaty preserves those rights granted authors of liter-
 ary and artistic works under the Berne convention.26' In addition to
   256 Amy Harmon, Meeting Takes Copyright Law to Digital Age, L.A. TIMES, Dec.
 2, 1996, at Al.
   257 WIPO Delegates Agree on International Copyright Protections, TR DAILY
 (BRP Publications, Inc.), Dec. 20, 1996, available in 1996 WL 15885989.
   25. Id The Database Treaty was deemed too controversial, and in light of the diffi-
 culties encountered with the other two treaties, was dropped from the agenda by its
 primary supporter, the U.S. government. Revolt over Copyright Treaty Prompts US.
 Withdrawalfrom Database Treaty, EDUC. TECH. NEWS, Dec. 17, 1996, at 17.
   259 WIPO Approves Copyright Treaty, NEWBYTEs, Dec. 23, 1996, at 8.
   26" Radelat, supra note 249, at 28.
   261 WIPO Copyright Treaty, December 20, 1996, art. 1(4), in Int'l Legal Materials
 (Am. Soc'y. of Int'l. Law, Jan. 1997) ("Contracting Parties shall comply with Articles I
 to 21 and the Appendix of the Berne Convention"). Rather than amend the Berne
 Convention (which would have required unanimous support among the Contracting
 protecting the works itemized in Berne, the Copyright Treaty adds one
 new item, computer programs, to the list of protected items.262 Article 6
 of the treaty grants authors of literary and artistic works a right of distri-
 bution.263   Article 7 of the treaty grants the authors of computer pro-
 grams, cinematographic works, and certain phonograms a right of
 rental.264 Article 8 provides for a right of communication to the public
 and makes clear that the right applies to transmissions, such as through
 the Internet.265 Articles 11 and 12 protect against the circumvention of
 technological measures meant to protect copyrighted works.266
 Parties), WIPO chose to construct the Copyright Treaty as a supplement to the Berne
 Convention. See id at art. 1(1) ("This Treaty is a special agreement within the mean-
 ing of Article 20 of the Berne Convention for the Protection of Literary and Artistic
 Works, as regards Contracting Parties that are countries of the Union established by
 that Convention. This Treaty shall not have any connection with treaties other than the
 Berne Convention, nor shall it prejudice any rights and obligations under any other
    262 "Computer programs are protected as literary works within the meaning of Ar-
 ticle 2 of the Berne Convention. Such protection applies to computer programs, what-
 ever may be the mode or form of their expression." Id at art. 4.
    263 "Authors of literary and artistic works shall enjoy the exclusive right of author-
 izing the making available to the public of the original and copies of their works
 through sale or other transfer of ownership." Id at art. 6(1).
    264 "Authors of(i) computer programs; (ii) cinematographic works; and (iii) works
 embodied in phonograms, as determined in the national law of Contracting Parties,
 shall enjoy the exclusive right of authorizing commercial rental to the public of the
 originals or copies of their works." Id at art. 7(1). Article 7(1) does not apply "(i) in
 the case of computer programs, where the program itself is not the essential object of
 rental; and (ii) in the case of cinematographic works, unless such commercial rental has
 led to widespread copying of such works materially impairing the exclusive right of
 reproduction." Id. at art. 7(2).
    265 ,,.... authors of literary and artistic works shall enjoy the exclusive right of
 authorizing any communication to the public of their works, by wire or wireless means,
 including the making available to the public of their works in such a way that members
 of the public may access these works from a place and at a time individually chosen by
 them." Id at art. 8.
   266 "Contracting Parties shall provide adequate legal protection and effective legal
 remedies against the circumvention of effective technological measures that are used
 by authors in connection with the exercise of their rights under this Treaty or the Berne
 Convention and that restrict acts, in respect of their works, which are not authorized by
 the authors concerned or permitted by law." Id at art. 11. "Contracting Parties shall
 [Vol 5:1
 Fall 1997]       INTERNET COPYRIGHT PROTECTION                            57
     The Performances and Phonograms Treaty preserves those rights
 granted to the performers and producers of phonograms under the Rome
 Convention.267 Article 4 of the treaty provides for national treatment of
 said performers and producers.26" The treaty grants performers moral
 rights in their works,269 economic rights in unfixed performances,270 a
 right of reproduction of their performances in phonograms,      a right of
 distribution of their performances fixed in phonograms,272 a right of
 rental,273 and a right to make available fixed performances to the pub-
 lic.274 Producers of phonograms are similarly granted a right of repro-
 duction,275 a right of distribution,276 a right of rental,277 and a right to
 provide adequate and effective legal remedies against any person knowingly perform-
 ing any of the following acts knowing, or with respect to civil remedies having reason-
 able grounds to know, that it will induce, enable, facilitate or conceal an inflingement
 of any right covered by this Treaty or the Berne Convention: (i) to remove or alter any
 electronic rights management information without authority; (ii) to distribute, import
 for distribution, broadcast or communicate to the public, without authority, works or
 copies of works knowing that electronic rights management information has been re-
 moved or altered without authority." Id at art. 12(1).
    267 WIPO Performances and Phonograms Treaty, Dec. 20, 1996, art. (1) ("Nothing
 in this Treaty shall derogate from existing obligations that Contracting Parties have to
 each other under the International Convention for the Protection of Performers, Pro-
 ducers of Phonograms and Broadcasting Organizations done in Rome, October 26,
 1961 (hereinafter the "Rome Convention").
    268 "Each Contracting Party shall accord to nationals of other Contracting Parties,
 as defined in Article 3(2), the treatment it accords its own nationals with regard to the
 exclusive rights specifically granted in this Treaty, and to the right to equitable remu-
 neration provided for in Article 15 of this Treaty." Id at art. 4(1).
   269 Id at art. 5.
   270 Id. at art. 6.
   271 Id. at art. 7.
   272 Id. at art. 8.
   273 Id. at art. 9.
   274 Id. at art. 10. ("Performers shall enjoy the exclusive right of authorizing the
 making available to the public of their performances fixed in phonograms, by wire or
 wireless means, in such a way that members of the public may access them from a
 place and at a time individually chosen by them.") Such performances would seem-
 ingly include performances made over the Internet.
   275 Id. atart. 11.
   276 Id at art. 12.
   277 Id. at art. 13.
 make available phonograms to the public.278 The treaty also provides for
 a right of remuneration to producers and performers for broadcast and
 communication of phonograms to the public.279 The treaty also contains
 provisions containing technological protections and copyright manage-
 ment information.280
     The two critical elements of these treaties, as they pertain to the
 Internet are first, that the Copyright Treaty extends intellectual property
 protection to computer programs.28 Second, the agreed statements con-
 cerning the treaties, though not having the binding authority of interna-
 tional law, and while not being adopted unanimously by the WIPO
 membership like the treaties, make clear that copyright protection ex-
 tends to the digital environment. The Agreed Statement Concerning the
 WIPO Copyright Treaty, Article 1(4) states:
     The reproduction right, as set out in Article 9 of the Berne Convention,
     and the exceptions permitted thereunder, fully apply in the digital envi-
     ronment, in particular to the use of works in digital form. It is under-
     stood that the storage of a protected work in digital form in an electronic
     271 Id. at art. 14.
     279 "Performers and producers of phonograms shall enjoy the right to a single eq-
 uitable remuneration for the direct or indirect use of phonograms published for com-
 mercial purposes for broadcasting or for any communication to the public." Id. at art.
 15(1). "Contracting Parties may establish in their national legislation that the single
 equitable remuneration shall be claimed from the user by the performer or by the pro-
 ducer of a phonogram or by both. Contracting Parties may enact national legislation
 that, in the absence of an agreement between the performer and the producer of a pho-
 nogram, sets the terms according to which performers and producers of phonograms
 shall share the single equitable remuneration." Id at art. 15(2). "For the purposes of
 this Article, phonograms made available to the public by wire or wireless means in
 such a way that members of the public may access them from a place and at a time in-
 dividually chosen by them shall be considered if they had been published for commer-
 cial purposes." Id. at art. 15(4). The term "communication to the public", defined in
 Article 2, would seemingly encompass transmissions over the Internet. Id at art. 2(g)
 (" 'communication to the public' of a performance or a phonogram means the transmis-
 sion to the public by any medium, otherwise than by broadcasting, of sounds of a per-
 formance or the sounds or the representations of sounds fixed in a phonogram ....")
   280 Id. at arts. 18-19.
   281 Article 10 of the TRIPS Agreement also confirmed computer programs were
 protectible under international copyright law as literary works. See White Paper, supra
 note 112, at 136. Several key states, however, are not members of the World Trade
 Organization which governs the TRIPS Agreement.
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 Fall 1997]       INTERNET COPYRIGHT PROTECTION                            59
     medium constitutes a reproduction within the meaning of Article 9 of
     the Berne Convention.
     The Performances and Phonograms treaty contains similar but
 weaker language with respect to phonograms on the Internet.2s2 The
 agreed statements outline exactly how the treaties are to be interpreted
 by the contracting party-states.
     Originally, Article 7 of the original draft treaty made clear that the
 right to reproduction in Berne extended to all mediums and included
 temporary reproductions, such as downloading memory into RAM for
 viewing a Web page.2"3 The Notes accompanying Draft Article 7 further
 stated that the right of reproduction "clearly includes the storage of a
 work in any electronic medium [and] such acts as uploading and down-
 loading a work to or from the memory of a computer."284 Draft Article
 7 ensured that any reproduction occurring over the Internet, no matter
 how temporary, would constitute an infringement, and left it to the indi-
 vidual states to draft exceptions which would exempt activities, such as
 browsing rights, from legal liability.2"5
   282 "It is understood that the provisions of Article 10 permit Contracting Parties to
 carry forward and appropriately extend into the digital environment limitations and ex-
 ceptions in their national laws which have been considered acceptable under the Beme
 Convention. Similarly, these provisions should be understood to permit Contracting
 Parties to devise new exceptions and limitations that are appropriate in the digital net-
 work environment ....." Agreed Statement Concerning the WIPO Performances and
 Phonograms Treaty, Concerning Article 10.
       283 "Article 7: Scope of the Right of Reproduction.
     (1) The exclusive right accorded to authors of literary and artistic works in article
     9(1) of the Berne Convention of authorizing the reproduction of their works shall
     include direct and indirect reproduction of their works, whether permanent or tem-
     porary, in any manner or form.
     (2) Subject to the provisions of article 9(2) of the Berne Convention, it shall be a
     matter for legislation in Contracting Parties to limit the right of reproduction in
     cases where a temporary reproduction has the sole purpose of making the work per-
     ceptible or where the reproduction is of a transient or incidental nature, provided
     that such reproduction takes place in the course of use of that work that is author-
     ized by the author or permitted by law."
 Basic Proposal for the Substantive Provisions of the Treaty on Certain Questions Con-
 ceming Protection of Literary and Artistic Works to be Considered by the Diplomatic
 Conference, December 2, 1996, in 43 J. COPYRIGHT SOC'Y U.S.A. 399, 416 (1996).
   284 Wendy L. Addis and Ronald S. Katz, WIPO Treaties: Euphoria Should Wait,
 14 COMPUTER LAW 1, 2 (1997).
   28. Id The Performances and Phonograms Treaty contained parallel provisions to
     Draft Article 7, however, drew loud protests from Internet service
 providers, such as AT&T and U.S. Telephone Association, which feared
 they could be made liable for these unauthorized reproductions.216 On
 one side of the debate were the film and recording industries, publishing
 companies, and software manufacturers, on the other were consumer ad-
 vocates, library and academic groups, and telecommunication compa-
 nies.287 As a result of this pressure, several countries concluded that
 Draft Article 7 was too controversial and that the subject matter was al-
 ready protected under existing law, and therefore they withdrew their
 support and demanded that the article be withdrawn.2"' The United
 States reluctantly agreed to delete the draft article, but insisted that lan-
 guage be inserted into the agreed statements to make clear that the trea-
 ties' protections extended to the digital environment.289
     The current U.S. administration believes the treaties, in their current
 form, resolve the debate over whether copyright protections apply to the
 Internet.29? The Treaties do, however, leave a number of ambiguities in
 Draft Article 7. Id.
   286 John Parry, Loud Protest Song Over Draft of Copyright Treaty, THE
 HOLLYWOOD REP., Dec. 20-22, 1996, at 3.
   287 John Parry, Slow Copyright Dance in Geneva, THE HOLLYWOOD REP., Dec. 10,
   1996, at 7.
   288 Controversial Section in Copyright Treaties Deleted, But Carriers Want More
 COMM. DAILY (Warren Publishing, Inc.), Dec. 23, 1996, available at 1996 WL
   289 Online Community Claims Victory in World Copyright Conference, COMM.
 DAILY (Warren Publishing, Inc.), Dec. 26, 1996, available at 1996 WL 12306658.
   290 Peter Fowler, the Executive Secretary to the U.S. delegation to the WIPO Dip-
 lomatic Conference, has stated that the treaties resolve the issue of the application of
 copyright law to the Internet. Peter N. Fowler, Address to the Los Angeles County Bar
 Association (May 1, 1997). Additionally, the Administration's Framework for Global
 Electronic Commerce describes the WIPO Treaties: "The two treaties-the WIPO
 Copyright Treaty and the WIPO Performances and Phonograms Treaty-will greatly
 facilitate the commercial applications of online digital communications over the GIL."
 A   Framework for Global Electronic Commerce, July      1997, available at
 . As to the reproduction
 right, the Framework states: "Both treaties also contain provisions that permit nations
 to provide for exceptions to rights in certain cases that do not conflict with a normal
 exploitation of the work and do not unreasonably prejudice the legitimate interests of
 the author (e.g., 'fair use'). These provisions permit members to carry forward and ap-
 [Vol 5:1
 Fall 1997]      INTERNET COPYRIGHT PROTECTION                         61
 international copyright law. Primarily, the agreed statements only clar-
 ify that the right to reproduction extends into the digital environment,
 but they say nothing regarding the new rights to distribution or commu-
 nication. Room is left for argument as to whether these rights extend to
 the Internet, and when a Web page is accessed, whether the reproduc-
 tion, distribution, or communication rights are triggered. The primary
 function of the treaties, however, is to serve as a statement to the public
 and critics of copyright protection that intellectual property does exist on
 the Internet.
     The motion picture, television, recording, and software industries
 have whole-heartily supported ratification of and lobbied for the trea-
 ties.29"' In response, President Clinton has submitted the treaties for rati-
 fication to the U.S. Senate,292 though Bruce Lehman and other admini-
 stration officials believe little else in the way of supplementing
 legislation is required.293 House Resolution 2281, the limited supple-
 menting legislation was introduced on July 29, 1997 to implement the
 treaties.!   For the most part, the legislation consists of technical
 amendments to bring definitions in line with the WIPO language.295 The
 bill also includes provisions prohibiting the circumvention of copyright
 protection systems.296   The bill attempts to preserve the integrity of
 propriately extend into the digital environment limitations and exceptions in their na-
 tional laws which have been considered acceptable under the Berne Convention.
 These provisions permit members to devise new exceptions and limitations that are ap-
 propriate in the digital network environment, but neither reduce nor extend the scope
 of applicability of the limitations and exceptions permitted by the Berne Convention."
   29" Jack Valenti, chief executive officer of the Motion Picture Association, has
 stated: "These treaties are in the best interests [sic] of the United States." Brooks
 Boliek, Clinton Goes Forward on WIPO Treaty Legislation, THE HOLLYWOOD REP.,
 July 30, 1997, at 8.
   292 Id.
   293 Clinton Administration to Push for Ratification of WIPO Treaties, 9 J.
 PROPRIETARY RTs. 16 (Mar. 1997).
   294 H.R. 2281, 105th Cong., 1st. Sess., reprinted in BNA's PAT., TRADEMARK &
 COPYRIGHT J. (July 31, 1997).
   295 Id. at Sec. 2.
   296 "(a)    VIOLATIONS       REGARDING        CIRCUMVENTION         OF
 62              UCLA ENTERTAINMENT LAW REVIEW                                [Vol 5:1
 (1)    No person shall circumvent a technological protection measure that effectively
 controls access to a work protected under this title.
 (2)    No person shall manufacture, import, offer to the public, provide or otherwise
 traffic in any technology, product, service, device, component, or part thereof that-
      (A) is primarily designed or produced for the purpose of circumventing a techno-
      logical protection measure that effectively controls access to a work protected under
      this title;
      (B) has only limited commercially significant purpose or use other than to circum-
      vent a technological protection measure that effectively controls access to a work
      protected under this title; or
      (C) is marketed by that person or another acting in concert with that person for use
      incircumventing a technological protection measure that effectively controls access
      toa work protected under this title.
 (3) As used in this subsection-
      (A) to bcircumvent a technological protection' means to descramble a scrambled
      work, to decrypt an encrypted work, or otherwise to avoid, bypass, remove, deacti-
      vate or impaira technological protection measure, without the authority of the copy-
      right owner; and
      (B) a technological protection measure 'effectively controls access to a work' if the
      measure, in the ordinary course of its operation, requires the application of infor-
      mation, or a process or a treatment, with the authority of the copyright owner, to
      gain access to the work.
 (1) No person shall manufacture, import, offer to the public, provide or otherwise traf-
 fic in any technology, product, service, device, component, or part thereof that-
      (A) is primarily designed or produced for the purpose of circumventing protection
      afforded by a technological protection measure that effectively protects a right of a
      copyright owner under this title in a work or a portion thereof;
      (B) has only limited commercially significant purpose or use other than to circum-
      vent protection afforded by a technological protection measure that effectively pro-
      tects a right of a copyright owner under this title in a work or a portion thereof; or
      (C) is marketed by that person or another acting in concert with that person for use
      in circumventing protection afforded by a technological protection measure that ef-
      fectivelyprotects a right of a copyright owner under this title in a work or portion
 (2) As used in this subsection-
      (A) the term 'circumvent protection afforded by a technological protection measure'
      means avoiding, bypassing, removing, deactivating, or otherwise impairing a tech-
      nological protection measure; and
      (B) a technological protection measure 'effectively protects a right of a copyright
      owner' under this title if the measure, in the ordinary course of its operation, pre-
      vents, restricts, or otherwise limits the exercise of a right of a copyright owner un-
      der this title.
 Fall 1997]       INTERNET COPYRIGHT PROTECTION                             63
 copyright management information297 and the bill provides for civil
 remedies298 and criminal penalties299 for circumvention of these protec-
 (c) IMPORTATION- The importation into the United States, the sale for importation,
 or the sale within the United States after importation by the owner, importer, or con-
 signee of any technology, product, service, device, component, or part thereof as de-
 scribed in subsection (a) or (b) shall be actionable under section 337 of the Tariff Act
 of 1930 (19 USC. §1337) ...."
 Id. at sec.3, §1201.
 shall knowingly-
 (]) provide copyright management information that is false, or
 (2) distribute or import for public distribution copyright management information that
     is false, with the intent to induce, enable, facilitate, or conceal infringement.
 INFORMATION- No person shall, without the authority of the copyright owner or
 the law-
 (1) intentionally remove or alter any copyright management information,
 (2) distribute or import for distribution copyright management information knowing
     that the Copyright Management Information has been removed or altered without
     authority of the copyright owner of the law, or
 (3) distribute, import for distribution, or publicly perform works, copies of works, or
     phonorecords, knowing that the copyright management information has been re-
     moved or altered without authority of the copyright owner or the law, knowing, or
     with respect to civil remedies under section 1203, having reasonable grounds to
     know, that it will induce, enable, facilitate, or conceal an infringement of any right
     under this title.
 (c) DEFINITION- As used in this chapter, the term 'copyright management informa-
 tion' means the following information conveyed in connection with copies or phonore-
 cords or a work or performances or displays of a work, including in digital form:
 (1) The title and other information identifying the work, including the information set
 forthon a notice of copyright.
 (2) The name of, and other identifying information about, the author of the work.
 (3) The name of, and other identifying information about, the copyright owner of the
 work,including information set forth in a notice of copyright.
 (4) Terms and conditions for use of the work.
 (5) Identifying number or symbols referring to such information or links to such in-
 tions. This bill differs little from House Resolution 2241, except on the
 margins. The extent of the difference is unclear at this point due to the
 numerous amendments expected.
     Passage of the treaty and implementing language, however, is likely
 to be held up by the very same telecommunication and online service
 companies that removed Draft Article 7 from the Copyright Treaty.
 These interest groups feel passage of the treaties will create an enhanced
 danger of contributory and vicarious liability. To protect these interests,
 Rep. Howard Coble (R-NC), the sponsor of House Resolution 2281, has
 introduced a bill, House Resolution 2180, which will exempt qualifying
 Internet and on-line service providers from direct or vicarious copyright
 liability for transmissions by third parties.3°° A Senate version of the bill
 has also been introduced.30
 (6) Such other information as the Register of Copyrights may prescribe by regulation,
 except the Register of Copyrights may not require the provision of any information
 concerning the user of a copyrighted work ... .
 Id. at sec.3, §1202.
   298 Id at sec.3, §1203(a) ("Any person injured by a violation of section 1201 or
 1202 may bring a civil action in an appropriate United States district court for such
 violation.") The bill provides for injunctive relief, an impoundment remedy, damages,
 and attorney's fees. Id at sec. 3, § 1203(b). Damages can either be actual or statutory,
 with trebled damages for repeat violators. Id at sec.3, § 1203(c).
   299 Id. at sec.3, § 1204. The bill provides for a fine of no more than $500,000 and
 imprisonment of not more than five years or both for the first offense, $1,000,000 and
 ten years or both for subsequent offenses. Id.
   300 H.R. 2180, 105th Cong., 1st. Sess., reprinted in BNA's PAT., TRADEMARK&
 COPYRIGHT J. (July 24, 1997). A provider will not be liable for direct infringement or
 the infringing acts of another, based solely on transmitting or providing access to mate-
 rial on-line if "the person- (A) does not initially place the material on-line; (B) does
 not generate, select, or alter the content of the material; (C) does not determine the re-
 cipients of the material; (D) does not receive a financial benefit directly attributable to
 a particular act of infringement; (E) does not sponsor, endorse, or advertise the mate-
 rial; and (F) (i) does not know and is not aware by notice or other information indicat-
 ing that the material is infringing, or (ii) is prohibited by law from accessing the mate-
 rial." Id at sec.2, §512(a). Injunctive relief is available still for contributory
 infringement. Id. The service provider is also shielded from liability for blocking on-
 line access to infringing material. Id at §512(b). Finally, any person who knowingly
 materially misrepresents that material is infringing is subjected to damages incurred by
 [Vol 5:1
 Fall 1997]       INTERNET COPYRIGHT PROTECTION                             65
     The WIPO Treaties, for all their imperfections, and despite the com-
 promise of House Resolution 2281, serve the critical function of com-
 municating that copyright protections do apply on the Internet in the
 global marketplace.302
 any person who relies upon such misrepresentation in blocking access. Id at §512(d).
 Subsection (d) raises the specter of lawsuit by individuals claiming their allegedly in-
 fringing materials were fair use and the copyright owner knew this and initiated
 blocking access for harassment purposes.
    "01 Sen. John Ashcroft (R-MO) on September 3, 1997 introduced the Senate
 counterpart to the House bill (HR 2180) limiting on-line service provider liability to
 third parties. Liability Bill for On-Line Service Providers Focuses on 'Notice and
 Take-Down', BNA's PAT., TRADEMARK & COPYRIGHT J., Sept. 11, 1997, at 384-
       Sen. Ashcroft's bill (S 1146) takes a different approach to on-line service pro-
 vider liability than the pending house bill. See S. 1146, 105th Cong., 1st Sess., re-
 printed in BNA's PAT., TRADEMARK & COPYRIGHT J., Sept. 11, 1997.
       As with the House Bill, Title I of S 1146 adds a new Section 512 to the Copy-
 right Act, exempting on-line services from liability for infringing transmissions of
 copyrighted material on their networks, but also includes explicit exemptions for
 voice messaging, e-mail service providers, real-time communication providers, and
 browsers. Id This sets up a notice and take-down structure, whereby service pro-
 viders escape liability only provided they remove or block infringing material upon
 receiving notice of its existence from the copyright proprietor. Id.
       Title 11 of S 1146 expands the concept of fair use to make clear fair use may
 be made of a copyrighted work by "analog or digital transmission." Id Title II also
 contains added exemptions for libraries, archives, and education. Id.
       Finally, Title III of S 1146 incorporates the WIPO implementation provisions
 of other bills into the on-line service bill. Like HR 2281, S 1146 prohibits the cir-
 cumvention of technological measures used to control access to copyrighted works,
 however, whereas the House bill outlaws the "manufacture, import, offer to the
 public" or other "trafficking" in devices used to circumvent, only the circumvention
 itself is illegal under S 1146. Id. S 1146 also differs from HR 2281 in its definition
 of "copyright management information," S 1146 limited the definition to informa-
 tion in electronic form. Id. The bills also provide for different civil remedies, and S
 1146 contains no criminal penalties.
   "    Additionally, the No Electronic Theft Act (H.R. 2265, 105th Cong., 1st Sess.)
 has recently been approved by the House Subcommittee on Intellectual Property.
 The No Electronic Theft Act makes it a crime for a person to post stolen electronic
 property on the Internet even if the person makes no money from the material. The
 NET Act makes it a felony to willfully infringe a copyright by reproducing 100 or
 more copyrighted works, with a value of at least $5,000, within a 180 day period,
 D.     An Enforcement Campaign
     In addition to raising public awareness of copyright concerns on the
 Internet through treaties and legislation, the same goal can be achieved
 through targeted litigation. Major infringements of intellectual property
 demand a rapid response through litigation that seeks an end to such in-
 fringement through remedies such as injunctions and the deterrent threat
 of imposing the maximum damages allowed under the law.
     The entertainment industries have begun to respond to infringements
 on the Internet when they are discovered by sending e-mail messages
 ordering infringers to cease and desist or face litigation. In May 1997,
 for example, the rock band Oasis e-mailed hundreds of sites warning the
 site operators to remove copyrighted photos, video clips, lyrics and
 sound samples.3"3 Several studios have followed suit for their motion
 picture and television releases.304
     The targets of these threats, however, must be carefully selected to
 avoid public relations disasters. Suing a college student putting up a
 Web page dedicated to her favorite television show will do nothing to
 endear the public to that show, nor to heighten public respect for the in-
 tellectual property rights of copyright owners. In fact, several studios
 who have threatened fans with litigation have discovered the strategy
 regardless of whether the infringer realized any financial gain. Brooks Bolick,
 Panel OK's Copyright Package, THE HOLLYWOOD REP., Oct. 1, 1997, at 23.
   303 The Hollywood Minute, (CNN television broadcast, May 20, 1997). The band's
 management company, Ignition, said the move was a preventative measure prompted
 by discovery last year that tracks from U2's latest album, "Pop," were illegally avail-
 able on the Internet prior to the record's release, and by concerns that the same would
 happen with the Oasis release "Be Here Now." Erich Boehm, Oasis Targets Internet
 Piracy, DAILY VARIETY, May 19, 1997, at 9.
   "   The film studios Fox and Viacom have taken an aggressive policy against in-
 fringing Web sites. See David Pescovitz, Hollywood War on the Fans, THE WEB
 MAGAZINE, May 1997, at 24-28.
   305 In October, 1996, for example, Fox ordered fan Gil Trevizo to remove boot-
 legged excerpts and script excerpts from the yet-to-be-released show Millennium. Id.
 at 26. Trevizo responded by organizing an e-mail protest wherein fans overwhelmed
 Fox servers with e-mail messages. Id at 27. Fox, in turn, allegedly caused Trevizo's
 university to freeze his internet account. Id. Lucasfilms encountered similar problems
 [Vol 5:1
 Fall 1997]     INTERNET COPYRIGHT PROTECTION                      67
     Instead, lawsuits should be targeted against: 1) sites infringing copy-
 righted works set up for commercial purposes and 2) sites involving the
 mass copying of sensitive information, including video excerpts, audio
 recordings, and private material, such as unreleased screen plays. In ad-
 dition these sites are more likely to not be protected by fair use due to
 their commercial impact on motion picture and television properties.316
 Test lawsuits against individual infringers should be launched immedi-
 ately to avoid the argument made before the courts that this form of
 conduct has occurred for a long time, and hence poses no threat to the
     The primary function of this litigation would be to deter potential in-
 fringers and to create a heightened sense of public awareness as to the
 existence of copyright law on the Internet. By raising such public
 awareness, the Industry might avoid the fate suffered by the software in-
 dustry in which many consumers regard the unauthorized copying of
 computer programs as acceptable because of the lack of awareness and
 deterrence. In fact there are few PC owners who do not have a piece of
 unauthorized software on their hard drives.
 E.    Notices and Contracts
     Another means of raising public awareness of the rights granted un-
 der copyright law is to provide notices of copyright, complete with a
 brief explanation of what the user is licensed to do with the Web pages
 or other documents, and an explanation of the penalties which will be
 incurred by violating the provisions of copyright law. These notices
 could be phrased in contractual terms, thus providing an additional
 claim of breach of contract against would be infringers, in addition to
 the basic copyright claims.
     Many Industry members are, in fact, already doing this. Disney's
 Web pages, for example, demonstrate "some of the scariest legal boiler-
 plate the Web has yet seen.""37 A disclaimer on the bottom of the intro-
 ductory page informs users that access to this Web site is subject to the
 with its campaign against infringing Star Wars sites. Id
   o See discussion on fair use, supra.
   307 See Burr, supra note 42.
 terms and conditions set forth by Disney.3"' Clicking on the disclaimer
 takes a user to a page listing the terms and conditions of use.
     Such adhesion contracts may or may not be enforceable, but their
 main function is to put the public on notice of the existence of copyright
 privileges and the owner's willingness to enforce such rights."09
 F.     Technological Protections
     House Resolution 2281 envisions two forms of copyright protection.
 The first are technological protections that control access to a work.31°
 Such protections would include passwords, payment systems, encryp-
 tion technology, and protection protocols. The second form of protec-
 tion comes in the form of copyright managerial information. Pursuant to
 section 1201 of the bill, it is prohibited to manufacture, import, offer to
 the public, provide or traffic in technology designed to circumvent such
 technological protections.31'
     Only technology which is "primarily designed or produced" to cir-
 cumvent technological protections is prohibited.3"2 Moreover, the tech-
 nology must have "limited commercially significant purpose or use
 other than" circumvention of protection measures.3"3 Finally, the tech-
 nology must be marketed for the purpose of circumventing a technologi-
 cal protection measure.3"4 In other words, the scope of protection under
   308 "Restrictions on Use of Materials- No material from Disney.com, or any Web
 site owned, operated, licensed, or controlled by Disney Online, the Walt Disney Com-
 pany, or any of its related, affiliated or subsidiary companies (collectively, 'Disney')
 may be copied, reproduced, republished, uploaded, posted, transmitted, or distributed
 in any way, without prior written permission of Disney, except that you may download
 one copy of the material on any single computer for your personal, non-commercial
 home use only, provided you keep in tact all copyright proprietary notices ....."
   309 Software companies have long taken to issuing printed limitations with the
 software they sell. Though the courts have been divided over the enforceability of
 such licenses, the trend seems to follow a recent Seventh Circuit case, upholding the
 enforceability of such shrinkwrap licenses under the U.C.C. CD Pro, Inc. v. Zeiden-
 berg, 86 F.3d 1447 (7th Cir. 1996).
   3`0 House Resolution 2281, supra note 296, at sec.2, §2201(a).
   ... Id. at sec.2, §1201(a)(2).
   312 Id. at §1201(aX2)(A).
   ... Id at sec.2, §1201(a)(2)(B).
   14 Id. at sec.2, §1201(a)(2XC).
 [Vol 5:1
 section 1201 is limited, and subject to interpretation by the courts as to
 when technology is "primarily designed" or "marketed" for such a
     Copyright management information includes such information as
 copyright notices, the name of the copyright owner, terms and condi-
 tions for use of the work, and a number of identifying symbols.315
 House Resolution section 1202 prohibits the intentional altering of such
 information or the knowing distribution of a work with altered informa-
     Though not contemplated by the bill, technological protections can
 go beyond those envisioned in the statute, such as enhanced encryption
 technology, or copyright management information that can trace who is
 accessing the work and where that work is transferred after the initial
 user.317 Technological protections represent a viable means by which
 copyrighted works can be protected from potential infringers, and users
 can be educated as to the rights of the copyright proprietor.
     As has been illustrated, the Motion Picture and Television Industry
 has a growing stake in the creation of content on the Internet, both in the
 form of advertising and in the form of entertainment content. With the
 passage of time and the development of technology, its role is certain to
 grow. The ease of infringement on the Internet, however, poses a severe
 problem to the creators of content, a danger enhanced by unresolved
 ambiguities under copyright law.
     To counteract these difficulties, the Motion Picture and Television
 Industry must play a more active role in policing the Internet. First and
 foremost, the Industry should support the ratification of the WIPO copy-
 right treaties, and the accompanying legislation, House Resolution 2281.
 The legislation would act as a statement that copyright protection does,
 in fact, apply to the Internet on a global level. The legislation, however,
 is not enough and a broader campaign of enforcement, education, and
 technology protection is needed. Only in this way can a firm statement
   315 Id. at sec.2, § 1202(c).
   316 Id. at sec.2, § 1202(b).
   3   Protection of such copyright management information is specifically exempted
 from the proposed statute. Id. at sec.2, § 1202(c)(6).
 Fall 19971
 70          UCLA ENTERTAINMENT LAW REVIEW                   [Vol 5:1
 be made that copyright protections must be respected in the digital envi-
     The Motion Picture and Television Industry has been on the cutting
 edge of entertainment delivery for the last 40 years. With the growing
 importance of the Internet as a medium for the delivery of entertain-
 ment, the Industry cannot afford to neglect the network and thereby risk
 falling behind and losing its place as an entertainment leader. But a
 leadership role in the face of changing technology requires foresight and
 imagination- the foresight to face and overcome the copyright dangers
 which will arise in cyberspace and the imagination to build a world
 where infinite information is available with the single click of a mouse.

Volume 13, Issue 1, pp1-32, Beck

 Music Composition, Sound Recordings
 and Digital Sampling in the 21st
 Century: A Legislative and Legal
 Framework to Balance
 Competing Interests
 Jeremy Beck*
     I. INTRODUCTION   ...........................................      2
        A. Music Composition and the New Technology ........             2
        B.  A Legal Overview  ...................................     4
        C. A Judicial Attempt at Clarity .........................       5
        RECORDINGS; LEGISLATIVE INTENT ......................            6
        F A IR  U SE  ................................................   8
        A. Distinguishing the Two Doctrines ....................         8
        B. De Minimis Use and Current Analytical Standards...            9
        C. Real Time v. Fixed Time: Aural and Visual Arts
            D istinguished  ........................................    10
   IV. FAIR USE AND PUBLIC POLICY ..........................     11
        THE DISTRICT COURT GOT IT RIGHT ....................     13
   * Jeremy Beck is a published composer of new classical music whose work has been
 presented by such organizations as New York City Opera and American Composers Orches-
 tra. A former tenured professor of composition and music theory, he holds a D.M.A. and
 M.M.A. from the Yale School of Music (1995, 1992), an M.A. from Duke University (1989)
 and a B.S. from the Mannes College of Music (1984), all in music composition. Beck is
 currently a third-year student in the evening division of the Brandeis School of Law at the
 University of Louisville (Kentucky). The author expresses his gratitude to Acting Dean
 David Ensign of the Brandeis School of Law for his early support and encouragement of this
 article, to the accomplished jurists and writers from whose thoughtful work it emerged, and
 to his wife, Christine Ehrick, for her patient understanding and intellectual savoir-faire.
 2           UCLA ENTERTAINMENT LAW REVIEW                  [Vol. 13:1
        A. An Unfortunate Development: De Minimis Use
            R ejected  ..............................................  13
        B. Might Fair Use Be Applicable in Bridgeport? ........    15
        C. The Amended Opinion ...............................     15
        D. The Purpose of Fair Use .............................   16
   VI. LEGITIMATE ECONOMIC CONCERNS ......................         17
        A . "M ash-Ups" . ........................................ 17
        B. The Byzantine Landscape of Legal Sampling ........          18
        C. What About Compulsory Licenses? ..................      20
        D. The Dual Licensing Puzzle ..........................    20
        E. And What About Musicians' Rights? .................     21
        SAMPLING IS NOTHING NEW .............................      22
        A . Borrowing  ........................................... 23
        B. Distinguishing Borrowing from Adaptation
            (D erivative  W ork) ....................................  24
        C . Q uotation ............................................ 25
        D. Quotation as Comment ..............................     27
        E . C ollage .............................................. 29
  VIII. W HITHER  M USIC?  ....................................... 30
  A. Music Composition and the New Technology
      Digital sampling ("sampling") has revolutionized the way music is
 created.1 Composers using this technique manipulate a recorded frag-
 ment of sound from a preexisting recording and then use it as a part of
 a new composition, realized as another recording.2 The advent of this
 compositional technique where creators of new music make use of pro-
 tected material has raised issues of copyright infringement that are still
      Music industry practices related to sampling were described in
 1993 as "unpredictable and probably unfair."4 The effort required by
 artists, record companies and their lawyers to police the use of samples
   I See Sherri Carl Hampel, Note, Are Samples Getting a Bum Rap?: Copyright Infringe-
 ment or Technological Creativity?, 1992 U. ILL. L. REV. 559, 560 (1992).
   2 See generally Jeffrey R. Houle, Digital Audio Sampling, Copyright Law and the Ameri-
 can Music Industry: Piracy or Just a Bad "Rap"?, 37 Loy. L. REV. 879, 880-82 (1992).
   3 See, e.g., Grand Upright Music, Ltd. v. Warner Bros. Records, Inc., 780 F. Supp. 182
 (S.D.N.Y. 1991); for further discussion of this case, see infra notes 14-16 and accompanying
   4 Michael L. Baroni, A Pirate's Palette: The Dilemmas of Digital Sound Sampling and a
 Proposed Compulsory License Solution, 11 U. MIAMI ENT. & SPORTS L. REV. 65, 91 (1993)
 (internal quotations omitted).
 2005]     COMPOSITION, RECORDINGS & SAMPLING                         3
 was considered an "unproductive, time-wasting chore."'5 Over a decade
 later, both providers and users of samples are still weighed down by
 "excessive time and financial costs."'6 The remedy for this continuing
 state of confusion and waste lies in more focused legislation and judicial
 guidance. In undertaking this task, Congress and the courts should re-
 frain from devising a "one size fits all" approach to the use of samples.
 Because each creative situation involving sampling will be different, re-
 taining a case-by-case evaluative method within more consistent guide-
 lines would best balance competing interests.
      Creators of sound recordings need protection from piracy and
 other forms of infringement, including provisions for fair compensation
 that would not overly expand the Constitutional limits of their monop-
 oly. Creators who utilize sampling should have a spectrum of possibili-
 ties available to them to make legitimate uses of preexisting recordings
 without a per se licensing requirement or fear of litigation. At the same
 time, such creators should not be granted carte blanche for any and all
 uses without ever having to pay for those uses.7 The tension between
 these two classes of creators has been described as a struggle between
 "the established entities in the music business and those trying to get
 established."8 This article explores this dichotomy and the available
 options to facilitate a balance between them. It then makes the argu-
 ment that any bright-line rule in the search for fairness is overbroad
 and unconstitutionally limits the scope of protection to be afforded new
 creators of music who use sampling. The article thus supports the posi-
 tion that rulings on such matters should be decided on an ad hoc basis,
 with allowances for finding:
      (1) the material used uncopyrightable as a matter of law;9 or
      (2) that the use is de minimis; or
      (3) that an affirmative defense of fair use controls.
      Further, artists who would like to utilize larger samples of material
 that would not be protected by (1-3) should be able to:
   5 Id. at 92.
   6 Josh Norek, Comment, "You Can't Sing Without the Bling": The Toll of Excessive Sam-
 ple License Fees on Creativity in Hip-Hop Music and the Need for a Compulsory Sound
 Recording Sample License System, 11 UCLA ENT. L. REV. 83, 84 (2004).
   ' See Molly McGraw, Comment, Sound Sampling Protection and Infringement in Today's
 Music Industry, 4 HIGH TECH. L.J. 147, 169 (1989).
   9 See A. Dean Johnson, Comment, Music Copyrights: The Need for an Appropriate Fair
 Use Analysis in Digital Sampling Infringement Suits, 21 FLA. ST. U. L. REv. 135, 141-142
 (1993) ("An issue that often emerges in digital sampling infringement cases is whether the
 sampled material is copyrightable in itself.").
 4            UCLA ENTERTAINMENT LAW REVIEW                    [Vol. 13:1
      (4) apply for a statutory mechanical sampling license; and
      (5) this mechanical sampling license should be inclusive of the
 concomitant license from the copyright holder of the musical composi-
 tion, thus extinguishing the burden on such artists to seek (and pay for)
 two licenses in order to utilize the sample.10
 B. A Legal Overview
      When analyzing claims of copyright infringement, courts have em-
 ployed several methods in attempting to balance the competing inter-
 ests of copyright holders and creators of new works. Some courts have
 applied tests based on the concept of de minimis use" while others
 have found the affirmative defense of fair use applicable.12 Unfortu-
 nately, the analyses and decisions in some of the cases that actually
 involve questions of sampling are less useful for their precedent.13
      For example, in the 1991 case of Grand Upright Music, Ltd. v.
 Warner Bros. Records., Inc., a rap musician known as Biz Markie incor-
 porated into his recording "Alone Again" a portion of the music and
 three words from a preexisting recording, "Alone Again (Naturally)"
 by Raymond "Gilbert" O'Sullivan.14 Biz Markie did not acquire a li-
 cense prior to the making or release of his recording.15 Without under-
 taking an analysis of the underlying issues, the court declared that any
 use of a preexisting recording constituted a per se violation of copyright
 law.16 This decision has been criticized for "failing to grasp the issue
 ... [and for] unwittingly creat[ing] a bright-line rule in an area that
 needed standards instead."'17 However, to be fair to the court, the de-
 fense in Grand Upright Music was poorly articulated, consisting of an
 incomplete chain-of-title argument (averring that the plaintiff did not
 own the copyright and therefore had no standing to bring suit) and an
   10 For a discussion of compulsory licenses, see infra section VI.
   11 See generally David S. Blessing, Note, Who Speaks Latin Anymore?: Translating De
 Minimis Use for Application to Music Copyright Infringement and Sampling, 45 WM. &
 MARY L. REV. 2399 (2004).
   12 See, e.g., Fisher v. Dees, 794 F.2d 432 (9th Cir. 1986) (parody as fair use); for a discus-
 sion and comparison of de minimis use and the defense of fair use, see infra sections III-IV.
   13 Chris Johnstone, Note, Underground Appeal: A Sample of the Chronic Questions in
 Copyright Law Pertaining to the Transformative Use of Digital Music in a Civil Society, 77 S.
 CAL. L. REV. 397, 406-07 (2004) ("[The court in Grand Upright Music] provided scant legal
 analysis ... by declining to conduct an analysis on the issues of de minimis copying or fair
 use, the opinion has been severely criticized.").
   14 Grand Upright Music, 780 F. Supp. at 183.
   15 Id.
   16 Id.
   17 Carl A. Falstrom, Note, Thou Shalt Not Steal: Grand Upright Music, Ltd. v. Warner
 Bros. Records, Inc. and the Future of Digital Sound Sampling in Popular Music, 45 HAS-
 TINGS L.J. 359, 378 (1994).
 2005]     COMPOSITION, RECORDINGS & SAMPLING                               5
 argument that sampling was an industry-wide practice in rap music.18
 Because the defense raised neither a de minimis claim nor a fair use
 defense, the court had no obligation to address these critical areas.
      Generally, it has been observed that the law has lagged far behind
 the growth of sampling in the burgeoning digital world.19 The variabil-
 ity of legal approaches and court holdings does little to provide any
 sense of predictability and consistency for recording artists, whether
 copyright holders of preexisting recordings or creators who utilize sam-
 pling in making new recordings. In the absence of clear parameters
 from court decisions, some writers have suggested that the most equita-
 ble solution would be for Congress to expand the compulsory license
 provisions of the Copyright Act to include sampling.20 While on its
 face this might seem like a proper resolution of the issues involved,
 such an approach may create more problems than it would solve.21
 C. A Judicial Attempt at Clarity
      A recent ruling in the Sixth Circuit attempted to bring some clarity
 and guidance to the issue of sampling.22 On September 7, 2004, in
 Bridgeport Music, Inc. v. Dimension Films, the Sixth Circuit announced
 a new bright-line rule: any taking from a preexisting recording consti-
 tutes infringement.23 This holding thus declares that any de minimis
 analysis is preempted by statute,24 and that artists utilizing digital sam-
 ples in their work must seek licenses.25 While the Sixth Circuit's at-
 tempt to bring consistency to this area of the law is laudatory, the result
 is ill-considered and overbroad.26 In addition, the Sixth Circuit's deci-
 sion did not reflect the admonition it had received in 1994 from the
   18 Grand Upright Music, 780 F. Supp. at 184-85 n.2.
   19 David Sanjek, "Don't Have To DJ No More": Sampling and the "Autonomous" Crea-
 tor, 10 CARDozo ARTS & ENT. L.J. 607, 617-19 (1992) ("[T]he law must catch up with ad-
 vancing technology.").
   20 See generally Norek, supra note 6.
   21 Sanjek, supra note 19, at 621 ("[One] alternative is for the record companies to estab-
 lish an industry-wide rate structure for licensing of and royalty payments for samples, but
 that could lead to complaints of price fixing.").
   22 Bridgeport Music v. Dimension Films, 383 F.3d 390 (6th Cir. 2004); affd on rehearing,
 410 F.3d 792 (6th Cir. 2005); for a discussion of the details of this case and its subsequent
 developments, see infra notes 78-102 and the accompanying text.
   23 Id.
   24 Id. at 399.
   25 Id. at 398 ("Get a license or do not sample."); the same quote may be found in
 Bridgeport, 410 F.3d at 801.
   26 See Recent Case: Copyright Law - Sound Recording Act - Sixth Circuit Rejects De
 Minimis Defense to the Infringement of a Sound Recording Copyright, 118 HARV. L. REV.
 1355, 1359 (2005) [hereinafter Recent Case] ("a purely textual analysis of the statute proves
 this interpretation misguided.").
 Supreme Court in Campbell v. Acuff-Rose Music, InC.27 In that earlier
 sampling case, the Supreme Court overruled a presumption found in
 the Sixth Circuit's opinion by declaring that infringement analysis is
 "not to be simplified with bright-line rules."'28 However, the Sixth Cir-
 cuit may have recalled this reproach when, significantly, it later issued
 an amendment to its September ruling, specifically suggesting that the
 doctrine of fair use might be applicable to sampling.29 This amendment
 is in accord with the concerns of scholars who perceive a growing im-
 balance in United States copyright law favoring the limited protection
 afforded the copyright holder over what should be the primary Consti-
 tutional objective of copyright law: "To Promote the Progress of Sci-
 ence and useful Arts" for the general public good.3� The court's
 position also is congruent with the historical practice of Western music
 composition; while the digital technology involved in sampling is new,
 many of the ideas underlying this compositional technique have been
 used by composers for centuries.31
       "Sound recordings" is one of the categories of works of authorship
  specifically protected by the 1976 Copyright Act (hereinafter "the
  Act").32 The bundle of rights afforded authors of sound recordings in-
  cludes the rights of reproduction, preparation of derivative works, dis-
  tribution of copies, and public performance by means of digital audio
  transmission.33 Significantly, Congress did not afford protection for ei-
  ther public performance or display.34 In the case of the latter provision,
  Congress extended protection to the "individual images of a motion
  picture or other audiovisual work."'35 By analogy, Congress also could
  have indicated a willingness to protect "individual portions" of a sound
    27 Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994); this case is discussed further
    infra, in section IV.
    28 Id. at 577 (the Court's admonishment here is specifically in the context of a fair use
    analysis, but seems to imply that such bright-line rules are disfavored in copyright law).
    29 Bridgeport Music v. Dimension Films, 383 F.3d 390 (6th Cir. 2004), amended December
    20, 2004; this suggestion was rearticulated by the 6th Circuit in its rehearing, see Bridgeport,
    410 F.3d at 805.
    30 U.S. CONST. art. I, � 8, cl. 8; see generally VAIDHYANATHAN, supra note 8.
    31 For a discussion on antecedents to sampling in Western music composition, see infra
    section VII.
    32 17 U.S.C. � 102(a)(7) (2003) (incorporating the Sound Recording Act of 1971, Pub. L.
  No. 92-140, 85 Stat. 391 (1971)).
    33 17 U.S.C. �� 106(l)-(3), (6) (2003).
    34 Id. �� 106(4) & (5).
    35 Id.
 2005]     COMPOSITION, RECORDINGS & SAMPLING                         7
 recording but instead specifically omitted such protection from the stat-
 ute. This theoretical defense to sampling has yet to be tested; it has not
 been raised in any published decision involving sampling.36 Even some
 of those who decry unauthorized sampling as "theft"37 have noted this
 lack of specificity in the statute.38
      Congress circumscribed the scope of exclusive rights in sound re-
 cordings later in the Act.39 In part, the statute reads:
     The exclusive right of the owner of copyright in a sound recording
     under clause (2) of section 106 [i.e., preparation of derivative works]
     is limited to the right to prepare a derivative work in which the actual
     sounds fixed in the sound recording are rearranged, remixed or oth-
     erwise altered in sequence or quality.40
     The statutory language has been read to preclude any de minimis
 analysis in sampling cases.41 However, when the statute is read in con-
 junction with the omission of protection for individual portions of the
 sound recording under � 106(4), it raises a question of Congressional
 intent: did Congress intend to extend protection to every individual
 part of a sound recording under � 114(b) when the language refers to
 rearrangement, remixing or sequential or qualitative alteration of the
 actual sounds fixed in a sound recording, or is the plural form of "fixed
 sounds" an operative component of the statute? In other words, is the
 protected right only applicable to situations where the entire sound re-
 cording is rearranged, remixed or sequentially or qualitatively altered?
      Furthermore, a "derivative work" is a term of art, defined in the
 statute as "a work based upon one or more preexisting works, such as a
 ... sound recording.., in which a work may be recast, transformed, or
 adapted."'42 If a new sound recording borrows a two-second fragment
 from a preexisting recording to use as a part of its mosaic,43 is the new
 work still "based" on that preexisting work? Is such a new sound re-
   36 Accord Sanjek, supra note 19, at 619 ("[T]he 1971 Sound Recording Act] is meant to
 protect the reproduction of a whole recording, not the appropriation of separate sounds on
 that recording which digital technology permits.").
   37 Baroni, supra note 4, at 93.
   38 Id. at 79 ("[T]here is considerable controversy and ambiguity over the extent to which
 [sound recordings] are protected.... Even if the Act's language does not expressly protect
 against sampling, the Act should be amended to do so.").
   31 17 U.S.C. � 114 (2003).
   40 Id. � 114(b).
   41 Bridgeport, 383 F.3d at 399; rearticulated on rehearing, 410 F.3d at 801.
   42 17 U.S.C. � 101 (2003).
   43 VAIDHYANATHAN, supra note 8, at 65 (using the term "mosaic" to describe some ap-
 proaches to sampling, and finding a 19th-century precedent in a description by Mark Twain
 of the creative process).
 8           UCLA ENTERTAINMENT LAW REVIEW                    [Vol. 13:1
 cording actually recasting, transforming or adapting the preexisting
      Fortunately, the legislative history of the Act offers guidance on
 these questions. Despite court findings to the contrary,44 copyright
 protection under � 114(b) of the Act is not absolute and Congress
 never intended to afford such a broad scope of protection to sound
 recordings.45 As stated in the House of Representatives Report, "In-
 fringement takes place whenever all or any substantial portion of the
 actual sounds that go to make up a copyrighted sound recording are
 reproduced."'46 The language used is key because it forestalls a narrow
 reading of the statute; Congress does not state that any taking consti-
 tutes infringement. This legislative history implicitly supports the appli-
 cability of a de minimis analysis in the context of sampling of
 preexisting recordings.47
 A. Distinguishing the Two Doctrines
      De minimis use in the context of copyright law has been defined as
  "copying [which] has occurred to such a trivial extent as to fall below [a
  finding of] substantial similarity."a48 It is important to note that this is a
  threshold consideration and is not a part of a fair use analysis. Fair use
  is an affirmative defense which only need be raised if a prima facie case
  has been made that copyright infringement has indeed occurred. Al-
  though a de minimis analysis should be a mixture of law and of fact, by
  definition, a de minimis finding means that the use is non- infringing.
  Should a court determine a use of protected material is de minimis,
  then the plaintiff has not satisfied the initial burden of proof and the
  suit must be dismissed.49
      However, if a court determines that a use is not de minimis, then
  the court may find that infringement has occurred. It is at this point in
  44 Bridgeport, 383 F.3d at 399; rearticulated on rehearing, 410 F.3d at 801.
  45 H.R. REP. No. 94-1476 at 106 (1976).
  46 Id. (emphasis added).
  47 See Recent Case, supra note 26, at 1359-60.
  48 Ringgold v. Black Entm't Television, Inc., 126 F.3d 70, 74 (2d Cir. 1997).
  49 Susan J. Latham, Newton v. Diamond: Measuring the Legitimacy of Unauthorized Com-
  positional Sampling - A Clue Illuminated and Obscured, 26 HASTINGS COMM. & ENT. L.J.
  119, 141-45 (2003). Additionally, a court may also determine as a threshold matter of law
  that the material used is not copyrightable in the first place and therefore not protected at
  all. See, e.g., Newton v. Diamond, 204 F. Supp. 2d 1244, 1256 (C.D. Cal. 2002), affd on other
 grounds, Newton v. Diamond, 349 F.3d 591 (9th Cir. 2003) ("six-second, three-note sequence
 with a single background note ... cannot be protected as a matter of law").
 2005]     COMPOSITION, RECORDINGS & SAMPLING                           9
 the analytical process that a fair use analysis may be undertaken.50 The
 fair use analysis generally involves questions of law and fact to be de-
 termined by the court and the fact-finder.51 In other words, when a
 defendant is answering a claim of copyright infringement, if appropri-
 ate, it would be wise to argue in the alternative:
      (a) the material claimed as protected is not copyrightable as a
 matter of law (and therefore the use is not an infringement), or
      (b) if the material is copyrightable and protected, the use is de
 minimis (and thus no infringement has occurred); or
      (c) if the material is copyrightable and protected and the use is not
 de minimis (and therefore infringement may have occurred), the use is
 still one which satisfies the four-factor fair use test, and thus there is no
 infringement under copyright law.52
      Unfortunately, some writers confuse these two individual doctrines
 and conflate the threshold analysis of de minimis use with the affirma-
 tive defense of fair use.53 It is important to keep these doctrines dis-
 tinct, for they provide different safe harbors for creators who may
 make use of protected material.
 B. De Minimis Use and Current Analytical Standards
      Before examining fair use more closely, it is important to under-
 stand the general analytical standards courts employ in attempting to
 determine whether a use may be declared de minimis. Any such analy-
 sis attempts to find whether or not a substantial similarity exists be-
 tween the source material and the claimed infringing use.54 Substantial
 similarity may be found when either (i) the two works as a whole are
 similar, but not identical;55 or (ii) only a small fragment of the two
   50 See Sandoval v. New Line Cinema, Corp., 147 F.3d 215, 217 (2d Cir 1998) (finding use
 of photographs in background of scenes of film not an infringement) ("[I]t was error [for the
 District Court] to resolve the fair use claim without first determining whether the alleged
 infringement was de minimis.").
 [B][4], 193 (Matthew Bender & Co. 2004) (but if a case only requires a conclusion based on
 a set of undisputed facts, a court "may resolve the fair use defense as a matter of law on
 summary judgment").
   52 17 U.S.C. � 107 (2003).
   3 See, e.g., Charles E. Maier, Note, A Sample for Pay Keeps the Lawyers Away: A Pro-
 posed Solution for Artists Who Sample and Artists Who Are Sampled, 5 VAND. J. ENT. L. &
 PRAC. 100 (2003).
   54 See NIMMER, � 13.03 [A] at 33-36.
   55 Id. (This circumstance is described by Nimmer with the unfortunate phrase "compre-
 hensive nonliteral similarity.").
 10           UCLA ENTERTAINMENT LAW REVIEW                     [Vol. 13:1
 works is identical.56 In pursuing this analysis, courts examine the dis-
 puted use from both a quantitative and a qualitative perspective.57
 When undertaking the inquiry courts "must balance the interests pro-
 tected by the copyright laws against the stifling effect that overly rigid
 enforcement of these laws may have on the artistic development of new
      A quantitative analysis considers the amount of material in-
  volved,59 but this evaluation is not determinative. "[E]ven if a copied
  portion [is] relatively small in proportion to the entire work, if qualita-
  tively important, the finder of fact may properly find substantial simi-
  larity."'60 Many of the cited cases in which de minimis analysis has
  evolved into tests or guidelines have been cases concerning the visual
  C. Real Time v. Fixed Time: Aural and Visual Arts Distinguished
      Discussions of de minimis analysis have been somewhat muddied
  by commentators who hypothetically apply tests and guidelines gener-
  ated by cases involving the visual arts or visual media (e.g., television
  and film) to sound recordings and sampling.62 Such applications by
  analogy are not a good fit. The tests that have evolved for the visual
  arts utilize an "observability" factor.63 Some writers have taken this
  notion of the "ordinary observer" and turned such an observer into the
  "ordinary listener."'64 This transformation raises a problem because vis-
  ual art is distinguishable from the aural art form of music, particularly
  as realized in sound recordings that use sampling.
      The visual arts and the individual frames of a film or video may be
  examined in fixed time; like the pages of a novel or a printed musical
  56 Id. at 53; Nimmer describes the second situation with an equally tortuous phrase: "frag-
  mented literal similarity." It is this second situation which is most often raised in cases of
  57 See Jarvis v. A&M Records, 827 F. Supp. 282, 291 (D.N.J. 1993).
  58 Bridgeport Music, Inc. v. Dimension Films, 230 F. Supp. 2d 830, 840 (M.D. Tenn. 2002),
  rev'd on other grounds, 383 F.3d at 406.
  '9 See Ringgold, 126 F.3d at 75.
  60 Cybermedia, Inc. v. Symantec Corp., 19 F. Supp. 2d 1070, 1077 (N.D. Cal. 1998).
  61 See Blessing, supra note 11, at 2415 ("no court has applied this [visual arts] test for de
  minimis use in the music sampling arena").
  62 See, e.g., Brett I. Kaplicer, Note, Rap Music and De Minimis Copying: Applying the
  Ringgold and Sandoval Approach to Digital Samples, 18 CARDOZO ARTS & ENT. L.J. 227,
  252 (2000).
  63 See Ringgold, 126 F.3d at 75; accord Sandoval, 147 F.3d at 217.
  6 See Stephen R. Wilson, Music Sampling Lawsuits: Does Looping Music Samples Defeat
  the De Minimis Defense?, 1 HIGH TECH. L.J. 179, 185 (2002) (conflating standards from a
  case involving an ornamental design by citing the case as if the court had invoked a "lis-
 tener" as opposed to an "observer").
 2005]     COMPOSITION, RECORDINGS & SAMPLING                         11
 score, visual images may be studied in minute detail due to their immo-
 bility.65 In stark contrast, sound recordings, and any sampling therein,
 may only be examined in real time. How many times would a fact
 finder need to listen in real time to a pair of recordings in order to
 analyze them? Would such incessant repetition - and the resulting fa-
 miliarity - present a greater risk of finding infringement? These ques-
 tions have not been addressed by the writers who introduce theories
 derived from the visual arts into hypotheticals that involve sampling.
      Further, in disputed uses relating to the visual arts, fixed time al-
 lows comparisons by the fact finder to be made simultaneously (i.e.,
 side by side). Even in disputes involving the real time presentation of
 film, comparisons may be made side by side on two screens. Such an
 approach is not available for comparing sound recordings; it is doubtful
 that even a highly-trained musician would be able to listen simultane-
 ously to two individual sound recordings and come to any sort of a
 reasonable analytical conclusion. The hypothetical application of de
 minimis standards derived from cases involving the visual arts is simply
 inappropriate, for this application negates the very nature of aural art
 forms - they exist in real time.66
      "Fair use" may be defined as "an equitable defense [creating] a
 limited privilege in those other than the owner of a copyright to use the
 copyrighted material in a reasonable manner without the owner's con-
 sent.''67 This affirmative defense need be addressed only after a plain-
 tiff has presented a prima facie case for infringement.68 A successful
 defense will abrogate the claim and the defendant will avoid liability.69
      The statute itself indicates some uses which may invoke this de-
 fense, including "criticism, comment, news reporting, teaching . . .
 scholarship, or research."'70 It is important to note that this list is illus-
 trative and not restrictive.71
   65 While motion pictures may be observed by the fact finder in real time, when a film or
 video is paused individual frames may be studied in fixed time; this opportunity for analysis
 is not available when a sound recording is so paused. Cases involving television and film
 such as Ringgold and Sandoval do not indicate whether the analysis involved only real time
 observation or a combination of real time and fixed time.
   66 Other art forms which exist in real time include any live performances (musical or the-
 atrical) as well as readings, lectures or debates.
   67 Fisher, 794 F.2d at 435.
   68 See NIMMER, � 13.05 at 149-52.
   69 Johnson, supra note 9, at 143.
   70 17 U.S.C. � 107 (2003).
   71 Id. ("for purposes such as").
 12           UCLA ENTERTAINMENT LAW REVIEW                    [Vol. 13:1
      In Campbell v. Acuff-Rose Music, Inc., the rap group 2 Live Crew
 contended that its commercial parody of Roy Orbison's song Oh, Pretty
 Woman, entitled Pretty Woman, was not infringement because it was
 protected by fair use.72 In addressing this argument, the Supreme
 Court stated that the "task [of fair use analysis] is not to be simplified
 with bright-line rules, for the statute, like the doctrine it recognizes,
 calls for case-by-case analysis."73
      Any analysis of fair use involves four statutory factors:
      (1) the purpose and character of the use, including whether such use
      is of a commercial nature or is for nonprofit educational purposes;
      (2) the nature of the copyrighted work;
      (3) the amount and substantiality of the portion used in relation to
      the copyrighted work as a whole; and
      (4) the effect of the use upon the potential market for or value of the
      copyrighted work.74
      These four factors are not to be viewed in isolation; they are to be
  explored and weighed together.75 This integrated approach to the anal-
  ysis is critical, for most composers who utilize sampling do so in a com-
  mercial context (i.e., to sell recordings). In the prior appeal of the
  Campbell case, the Sixth Circuit had reversed the district court's finding
  of no infringement, concluding that the commercial nature of 2 Live
  Crew's use of Orbison's song under the first factor of the fair use analy-
  sis created a presumption of infringement that barred a finding of fair
  use.76 The Supreme Court found this error to be a fundamental misun-
  derstanding of the law and of Congressional intent.77
  72 Campbell, 510 U.S. at 571-72.
  73 Id. at 577. While the central focus of this case asks whether or not sampling in the
  context of the genre of parody constitutes fair use, the underlying analysis need not be so
  74 17 U.S.C. � 107 (2003).
  75 Campbell, 510 U.S. at 578.
  76 Acuff-Rose Music, Inc. v. Campbell, 972 F.2d 1429, 1435-37 (6th Cir. 1992).
  77 Campbell, 510 U.S. at 584. Unfortunately, other writers have mistakenly made similar
  presumptions in looking at the four-factor analysis of fair use. See Maier, supra note 53, at
  101 ("[factors] 1 and 2 will almost always ... weigh against a finding of fair use"); see also
  Bruce J. McGiverin, Note, Digital Sound Sampling, Copyright and Publicity: Protecting
 Against The Electronic Appropriation of Sounds, 87 COLUm. L. REV. 1723, 1745 (1987) ("[A]
 plaintiff whose work has been sampled for commercial purposes should withstand a defense
 of fair use.").
 2005]     COMPOSITION, RECORDINGS & SAMPLING                          13
 A. An Unfortunate Development: De Minimis Use Rejected
      In the recent case which was heard on appeal by the Sixth Circuit,
 Westbound Records claimed that one of its sound recordings (Get Off
 Your Ass and Jam by George Clinton, Jr. and the Funkadelics) had
 been digitally sampled for use in another recording (100 Miles and Run-
 nin') and that this constituted infringement.78 The recording was in-
 cluded in the soundtrack to the film I Got the Hook Up, produced by
 No Limit Films.79 The actual sample involved was a "two-second sam-
 ple from [a] guitar solo [where] the pitch was lowered and the copied
 piece looped and extended to 16 beats."8'0 Utilizing a de minimis analy-
 sis, the district court found that the sampling involved did not "rise to
 the level of a legally cognizable appropriation" and granted summary
 judgment to the defendant.81
      On appeal and again on rehearing, the Sixth Circuit rejected the
 court's de minimis analysis and found that any use of preexisting sound
 recordings constituted an infringement per se according to the statute.82
 This recent holding, where the court admittedly "followed no existing
 judicial precedent,"83 has already drawn criticism.84
      The court further concluded that "The music industry, as well as
 the courts, are best served if something approximating a bright-line test
 can be established."'85 This statement is questionable not only given the
 Supreme Court's admonition in Campbell,86 but also in light of the rea-
   78 Bridgeport, 383 F.3d at 393.
   79 Id. (stating that Dimension Films is the lead co-defendant with No Limit Films).
   '0 Id. at 394.
   81 Bridgeport, 230 F. Supp. 2d at 841.
   82 Bridgeport, 383 F.3d at 399; affd on rehearing, 410 F.3d at 801-02; contra United States
 v. Taxe, 540 F.2d 961, 965 (9th Cir. 1976) (holding that district court's jury instruction that
 any unauthorized copying of a sound recording constitutes infringement was erroneous and
 that substantial similarity required to find infringement).
   83 Bridgeport, 383 F.3d at 400; rearticulated on rehearing, 410 F.3d at 802.
   84 Kenneth M. Achenbach, Comment, Grey Area: How Recent Developments in Digital
 Music Production Have Necessitated the Reexamination of Compulsory Licensing for Sam-
 pie-Based Works, 6 N.C. J.L. & TECH. 187, 199 (2004) ("[T]he court made its decision on an
 incomplete and fundamentally biased set of facts."); see also Recent Case, supra note 26, at
 1359 ("a purely textual analysis of the statute proves this interpretation misguided"); accord
 Steve Seidenberg, George Clinton's Record Label Takes On Music Samplers - Sixth Circuit
 Takes Aim At Recording Industry's Copyright Practices CORP. LEGAL TIMES, Dec. 2004, at
 26 (quoting an anonymous intellectual property attorney, "The court turns the statute upside
 down - it gives more protection for sound recordings when the statute is intended to give
 them less protection.").
   85 Bridgeport, 383 F.3d at 397; rearticulated on rehearing, 410 F.3d at 802.
   86 Campbell, 510 U.S. at 577.
 14           UCLA ENTERTAINMENT LAW REVIEW                   [Vol. 13:1
 sonable consideration that "[s]ampling jurisprudence incorporates
 cases involving both widely ranging fact patterns and a continually
 evolving technological landscape.,,87 In this regard, Learned Hand ex-
 pressed the view that analysis of copyright infringement should rely on
 a judge's instinctual impression of the totality of the works involved,
 and that a judge should use common sense on a case-by-case basis
 while guided by some general principles.88
      Moreover, in dismissing the possibility of a de minimis analysis in
 sampling cases by stating "even when a small part of a sound recording
 is sampled, the part taken is something of value," the Sixth Circuit in-
 troduces a policy statement that swerves dangerously close to reintro-
 ducing the "sweat of the brow" doctrine.89 This doctrine, which held
 that "copyright was a reward" for "hard work,"90 was explicitly rejected
 by the Supreme Court in Feist Publ., Inc. v. Rural Tel. Serv. Co., Inc.
 because "[t]he primary objective of copyright is not to reward the labor
 of authors, but '[t]o promote the Progress of Science and useful
 Arts."'91 The doctrine was further criticized by the Court because "the
 only defense to infringement [would be] independent creation."'92
 Other courts have subsequently held that "the underlying tenets of
 Feist inform the entire body of copyright jurisprudence."'93 Seen in this
 light, the Sixth Circuit's economic analysis is inapposite.
      Further, the court attempts to distinguish sampling from other
  types of uses by focusing on it as a "physical taking."'94 However, sam-
  pling is no more a "physical taking" than the photocopying of a musical
  score;95 nothing has been literally removed from the original sound re-
  cording (i.e., there is no resultant gap in the source recording). Such a
  misapprehension of sampling is not isolated. The singer James Brown
  has criticized sampling by asking rhetorically "Is it all right if I take
  some paint off your house and put it on mine? Can I take a button off
  your shirt and put it on mine? Can I take a toenail off your foot-is
  that all right with you?"'96 While the emotion behind these analogies
  87 Achenbach, supra note 84, at 200.
  88 Nichols v. Universal Pictures Corp., 45 F.2d 119 (2d Cir. 1930) as discussed in VAIDHY-
  ANATHAN, supra note 8, at 107 (discussing the comparison of a play and a motion picture);
 accord Achenbach, supra note 84, at 200 ("While a bright-line rule can be convenient at
 times, it is not the most appropriate approach to sampling cases.").
   8' Bridgeport, 383 F.3d at 399; rearticulated on rehearing, 410 F.3d at 802.
   90 Feist Publ., Inc. v. Rural Tel. Serv. Co., Inc., 499 U.S. 340, 352 (1991).
   91 Id. at 349 (quoting U.S. CONST. art. I, � 8, cl. 8; internal bracket included in original).
   92 Id. at 353.
   93 Earth Flag, Ltd. v. Alamo Flag Co., 153 F. Supp. 2d 349, 355 (S.D.N.Y. 2001).
   9 Bridgeport, 383 F.3d at 399; rearticulated on rehearing, 410 F.3d at 802.
   95 Recent Case, supra note 26, at 1360.
   96 McGraw, supra note 7, at 152.
 2005]     COMPOSITION, RECORDINGS & SAMPLING                        15
 may be heartfelt, it reflects a fundamental misunderstanding of the
 technique and its application. And even if sampling did constitute
 some sort of "physical taking," courts have applied a de minimis analy-
 sis "even when actual, physical artwork [has been] used in a movie,
 television show, or play."'97
 B. Might Fair Use Be Applicable in Bridgeport?
      If, in the absence of a de minimis analysis, a defendant has the
 opportunity to claim fair use, why was that defense not raised in this
      In Bridgeport, the fair use defense was not raised because the dis-
 trict court had ruled there was no infringement.98 By holding that the
 plaintiff had not satisfied the initial burden of proof, the appropriate
 result was summary judgment for the defendant.99 Because the Sixth
 Circuit reversed and remanded this ruling on appeal and on rehearing,
 the defense has yet to be addressed.100 Without the possibility of a de
 minimis analysis, the fair use defense becomes even more critical for
 the protection of those creative artists who work with the technique of
 sampling. Significantly, the Sixth Circuit comes very close to making
 this point themselves.
 C. The Amended Opinion
      The final paragraph of Part II of the Sixth Circuit's opinion in
 Bridgeport simply stated "These conclusions require us to reverse the
 entry of summary judgment on Westbound's claims against No Limit
 Films."101 It is noteworthy that only three months later the Sixth Cir-
 cuit amended this one-sentence paragraph to hold:
     These conclusions require us to reverse the entry of summary judg-
     ment in favor of No Limit Films on Westbound's claims of copyright
     infringement. Since the district judge found no infringement, there
     was no necessity to consider the affirmative defense of "fair use." On
   97 Recent Case, supra note 26, at 1360 (referencing Ringgold, 126 F.3d at 77 (holding that
 the use of a poster reproduction of artist's painting in several scenes of a television show was
 not de minimis)).
   98 Bridgeport, 230 F. Supp. 2d at 842.
   99 Id. at 842-43.
   100 The broad claim by Joseph Salvo, senior counsel for Sony BMG Music Entertainment
 that "this ruling has swept the fair-use defense away" is questionable. Quoted in Steve Sei-
 denberg, A Few Notes Play A Wrongful Tune: Court Comes Down on Unlawful Sampling in
 Rap Song, 3 No. 37 A.B.A. J. E-Rep. 2 (Sept. 17, 2004).
   1o' Bridgeport, 383 F.3d at 402.
 16            UCLA ENTERTAINMENT LAW REVIEW                        [Vol. 13:1
      remand, the trial judge is free to consider this defense and we express
      no opinion on its applicability to these facts.102
      Did the court feel it was necessary to suggest a safe harbor in order
 to mitigate the effects of its new bright-line rule? Certainly it is the
 intent of Congress that the applicability of fair use be construed
 broadly ("there is no disposition to freeze the doctrine in the statute,
 especially during a period of rapid technological change.")103
 D. The Purpose of Fair Use
       The defense of fair use is a bulwark against the "copyright-rich,"'104
  those who have attempted to circumvent the primary purpose of copy-
  right under the Constitution by demanding ever-greater protection for
  existing copyrights.105 These owner-creators subvert the very reason
  the Founders included a limited monopoly in the Copyright Clause of
  the Constitution: to benefit the public good.106 This view has been con-
  sistently upheld by federal courts as the principal focus of the Clause,107
  and the Supreme Court has clearly stated that "the primary object in
  conferring the monopoly lie[s] in the general benefits derived by the
  public from the labors of authors."'108
       Although some commentators would disagree, seen in terms of the
  above, the defense of fair use is particularly applicable to sampling.109
    102 Bridgeport Music, Inc. v. Dimension Films, 401 F.3d 647, 651 (2004); rearticulated on
  rehearing, 410 F.3d at 805; accord Recent Case, supra note 26, at 1357 n.18. See also Stan
  Soocher, Bit Parts, 20 No. 10 ENT. L. & FIN. 8 (Jan. 10, 2005).
    103 H.R. REP. No. 94-1476, at 66 (1976); accord McGraw, supra note 7, at 166 ("Congress
  intended the defense [of fair use] to be a flexible doctrine to accommodate rapid technologi-
  cal change.").
    104 VAIDHYANATHAN, supra note 8, at 82 (contrasting the evolution of the motion picture
 industry from being "copyright-poor" at the beginning of the twentieth century (adapting
 literary works by writers such as Mark Twain and Jack London without compensation) to
 becoming "copyright-rich" by the 1970's).
   101 Id. at 116 ("[T]wentieth-century copyright law has been a battle of strong interested
 parties seeking to control a market, not a concerted effort to maximize creativity and con-
 tent for the benefit of the public."); accord Eldred v. Ashcroft, 537 U.S. 186, 266 (2003)
 (Breyer, J., dissenting) ("I cannot find any constitutionally legitimate, copyright-related way
 in which the statute [extending the duration of basic copyright protection by 20 years] will
 benefit the public.").
   106 JAMES MADISON, WRITINGS 756-57 (Jack N. Rakove ed., Penguin Putnam 1999).
   107 See, e.g., Berlin v. E.C. Publications, Inc., 329 F.2d 541, 543-44 (2d Cir. 1964) (uphold-
 ing parody of lyrics as fair use) ("[T]he financial reward guaranteed to the copyright holder
 is but an incident of [the] general objective [to benefit the public], rather than an end in
   108 Fox Film Corp. v. Doyal, 286 U.S. 123, 127 (1932).
   109 VAIDHYANATHAN, supra note 8, at 145 ("[Sampling] could and should be considered
 fair use .... if copyright law is to conform to its constitutional charge ... it should allow
 transgressive and satirical sampling without having to clear permission from original copy-
 right owners."); contra Robert M. Szymanski, Audio Pastiche: Digital Sampling, Intermediate
 2005]     COMPOSITION, RECORDINGS & SAMPLING                            17
 The Supreme Court has observed, it is "an equitable rule of reason that
 permits courts to avoid rigid application of copyright statute when, on
 occasion, such application would stifle the very creativity which that
 law is designed to foster."110 Such rigid applications, as notably repre-
 sented by the decision in Grand Upright Music and perpetuated by the
 Sixth Circuit's holdings in Bridgeport, have already had a negative ef-
 fect on the development of hip-hop music.11'
 A.   "Mash-Ups"
      Outside of any moral condemnation of sampling as "theft,"'12
 some writers have expressed legitimate concern about the possible eco-
 nomic harm sampling may cause.113 While free dissemination of ideas
 is essential, it is equally important in some circumstances to protect the
 preexisting work of other creative artists. There may well be situations
 where a composer decides to use a larger portion or more significant
 portion of a source recording rather than a mere two seconds or so
 which would render the "quantitative" and "qualitative" analyses su-
 perfluous."z4 For example, an artist who samples may wish to blend an
 entire preexisting recording with original material or with other preex-
 isting recordings, creating a new transformative work through this jux-
 taposition. The resulting works are called "mash-ups.""115
 Copying, Fair Use, 3 UCLA ENr. L. REV. 271, 329 (1996) ("While the fair use defense has
 some appeal, it is unlikely that it will be upheld by courts outside the context of parody.").
   110 Stewart v. Abend, 495 U.S. 207, 236 (1990).
   111 "Public Enemy's music was affected more than anybody's [by lawsuits and enforce-
 ment of copyright laws in the early 1990's] because we were taking thousands of sounds. If
 you separated the sounds, they wouldn't have been anything-they were unrecognizable.
 The sounds were all collaged together to make a sonic wall. Public Enemy was affected
 because it is too expensive to defend against a claim. So we had to change our whole style."
 Kembrew McLeod, How Copyright Law Changed Hip Hop, STAY FREE! MAGAZINE (inter-
 view with Public Enemy's Chuck D.) at http://www.alternet.org/story/18830 (last accessed
 Mar. 8, 2005; on file with author).
   112 Grand Upright Music, 780 F. Supp. at 183 ("Thou shalt not steal" was the judge's
 opening statement in this opinion); that quote was noted with approval in Bridgeport upon
 its rehearing, 410 F.3d at 801, n.12.
   113 See Szymanski, supra note 109, at 322 ("In the absence of a market mechanism to
 rationally allocate the samples of popular artists [such as the Isley Brothers], it is conceivable
 that these signature sounds would be wasted by a scramble to use them up as quickly as
   114 For a discussion of quantitative and qualitative analyses, review supra notes 54-60 and
 the accompanying text.
   115 Annalee Newitz, Protest Music, http://www.alternet.org/columnists/story/19164 (July 7,
 2004) ("Mash-ups [are] digitally knitted-together compositions made up of two or more pop-
 ular songs.") (last visited Mar. 8, 2005; on file with author).
 18          UCLA ENTERTAINMENT LAW REVIEW                    [Vol. 13:1
      One recent, controversial example of a mash-up involves the work
 of record producer Brian Burton in Los Angeles.116 Burton, known as
 "DJ Danger Mouse," layered tracks from The Beatles critically-ac-
 claimed White Album (1968) with vocal tracks from rapper Jay-Z's
 more recent Black Album.117 Calling the resulting CD      The Grey Al-
 bum, Burton began sending out copies of his recording until EMI, the
 Beatles' record company, stopped the distribution.1"8 In response to
 EMI's cease-and-desist action, the activist group Downhill Battle facili-
 tated a one-day download of 100,000 illegal copies of The Grey Album
 over the Internet."19 While at least one reviewer calls Burton's mash-
 up "brilliant,"'20 criticism also has been levied that "[i]t's the Beatles'
 musicianship, songwriting and performing that you're benefiting from.
 It's the actual recording. That's what they own. They own the masters.
 You can't take something someone else owns."'2'
      If a new recording like The Grey Album exceeds the bounds of fair
  use, might there be another mechanism which could still facilitate its
  creation and release?
  B. The Byzantine Landscape of Legal Sampling
       "Get a license or do not sample" admonished the Sixth Circuit.122
  But some groups, like the Beatles, never give approval for sampling
  requests,123 so even if DJ Danger Mouse had sought to sample the
  White Album through legitimate channels, he never would have re-
  ceived permission to do S0.124 This situation highlights only one of the
  many problems artists may encounter when seeking to legally sample
  another artist's preexisting work.125
    116 See Jon Healey & Richard Cromelin, Pop Music; When copyright law meets the 'mash-
  up'; Sampling has spawned new art forms - and a complex battle over how to treat them, L.A.
  TimEs, Mar. 21, 2004, at El.
    117 Id.
    118 Id.
    119 See John Soeder, Listen Up, CLEVELAND PLAIN DEALER, Mar. 7, 2004, at J6 (the date
  of the group download, February 24, 2004, was therefore dubbed "Grey Tuesday").
    120 Id.
    121 See Healey & Cromelin, supra note 116 (quoting Chris Carter, host of "Breakfast with
  the Beatles" on Los Angeles radio station KLSX-FM).
    122 Bridgeport, 383 F.3d at 399; rearticulated on rehearing, 410 F.3d at 801.
    123 Healey & Cromelin, supra note 116.
    124 One wonders what either of the two deceased members of the Beatles (John Lennon
    and George Harrison) would have thought about the practice of sampling.
    125 Some commentators do not see these issues as problems; rather they are seen as
  merely aspects of a functioning free market. See, e.g., Szymanski, supra note 109, at 294-98
  ("The music industry's private ordering system, while imperfect, is preferable to a compul-
  sory licensing scheme.").
 2005]     COMPOSITION, RECORDINGS & SAMPLING                            19
      Because the sampling licensing scheme currently utilized in the
 music industry is ad hoc,126 as noted above, a copyright owner may sim-
 ply refuse the use of the requested material.127 Such a refusal could
 occur whether or not there is unequal bargaining power between the
 parties.128 An owner could deny the proposed use if he or she believes
 it to be controversial (for example, if a new song addresses sex, drugs or
 violence).129 Would a refusal like this be a form of censorship or
 merely an artist choosing to exert control over the integrity of his or her
 work? Seen from another perspective, although potentially one that is
 just as troubling, an owner might agree to a proposed use, but then
 charge an outrageous licensing fee that is disproportionate to the mate-
 rial requested.130 In a struggle between the haves and the have-nots in
 the world of copyright, the inequities in bargaining power can have del-
 eterious results.131
      Further, an artist who samples is under a burden which affects no
 other type of art form: anyone seeking a license to sample must actually
 seek two licenses: one from the owner of the copyright in the sound
 recording and one from the owner of the copyright in the underlying
 musical composition which is embodied in that recording.132 The
 owner of one copyright is rarely the owner of both;133 artists could find
   126 Id. at 290.
   127 VAIDHYANATHAN, supra note 8, at 140 ("When the Beastie Boys wanted to sample the
 Beatles song I'm Down, Michael Jackson informed them that he owned the rights to the
 song and denied them permission to use it.").
   128 See, e.g., Evans C. Anyanwu, Note and Comment, Let's Keep It on the Download: Why
 the Educational Use Factor of the Fair Use Exception Should Shield Rap Music from Infringe-
 ment Claims, 30 RUTGERS COMPUTER & TECH. L.J. 179, 189 (2004) (making the point that
 rap artists generally have weaker bargaining power in licensing negotiations).
   129 VAIDHYANATHAN, supra note 8, at 143; accord Healey & Cromelin, supra note 116
 (David Bowie states, "I would not give permission if I felt the work to be morally or politi-
 cally repugnant.").
   130 See Baroni, supra note 4, at 91 ("[Tlhe rap group 2 Live Crew paid roughly $100,000 to
 use sampled dialogue from the 1987 movie FULL METAL JACKET in their single Me So
   131 See Anyanwu, supra note 128, at 199 ("licensing fees ... financially burden rap artists
 and frustrate the creative nature of rap music"); accord VAIDHYANATHAN, supra note 8, at
 140 ("the potential costs of sampling ... retard[ ] the creative process"); see also Madeleine
 Baran, Copyright and Music: A History Told in MP3's, http://www.illegal-art.org/audio/his-
 toric.html (noting that The Verve, having sampled four bars of the Rolling Stones song The
 Last Time (which became only one track out of 48), was forced by the Rolling Stones' pub-
 lisher ABKCO "to cede the song's copyright to ABKCO owner Allan Klein, and to give all
 royalties to Mick Jagger and Keith Richards.") (last visited Mar. 8, 2005; on file with author).
   132 See Szymanski, supra note 109, at 290-91.
   133 See Baroni, supra note 4, at 97 ("Most often, the record company that produces the
 sound recording has exclusive rights to it, and the artist retains the composition rights.").
 20          UCLA ENTERTAINMENT LAW REVIEW                   [Vol. 13:1
 that they might receive permission and a license from one source but a
 rejection from the other.134
 C. What About Compulsory Licenses?
      To address the roadblocks an artist might encounter in seeking
 permission to sample a preexisting work, some writers have suggested
 that sampling be incorporated into the current statutory mechanical li-
 censing scheme.135 This mechanical licensing scheme enables a new
 artist to record another artist's work once the latter's recording has
 been released. In doing so, the new artist need only pay the proper
 licensing fee; there is no need to seek permission to make the new re-
 cording.136 This licensing scheme was initially devised by Congress as a
 part of the 1909 Copyright Act to protect against monopolistic practices
 in the music industry.137 Such an approach might well work to break
 similar types of monopolistic practices currently employed in the digital
 world.138 However, attractive as this solution might sound, it does not
 address the economic hardship imposed on new artists if they are re-
 quired to pay for two licenses to sample.139
 D. The Dual Licensing Puzzle
      The dual licensing problem was created by the 1976 Copyright Act;
  when Congress drafted it, no one could have foreseen the development
  of sampling in a future digital world of composition. Copyright law
  provides protection, and separate ownership, for music compositions
  and sound recordings.140 The challenge that this structure creates for
  artists seeking licenses to sample has been recognized and addressed by
  numerous scholars, though other writers make no mention of such a
      One compromise would be to define the sampling license as a sin-
 gle license wherein the license to the music composition and the license
   134 See Latham, supra note 49, at 146.
   "' 17 U.S.C. � 115 (2003); see, e.g., Achenbach, supra note 84, at 206-21.
   136 17 U.S.C. � 115(a)-(c) (2003).
   131 See Achenbach, supra note 84, at 207.
   138 Id. at 210-11; accord Randy S. Kravis, Comment, Does a Song by Any Other Name
 Sound as Sweet?: Digital Sampling and its Copyright Implications, 43 AM. U. L. REv. 231,
 273-75 (1993).
   139 See McLeod, supra note 111 (interview with Public Enemy's Hank Shocklee) ("[Price
 structures for samples on] one song [can cost] you more than half of what you would make
 on your album.").
   140 17 U.S.C. �� 102(a)(2) & (7) (2003).
   141 Compare, e.g., Szymanski, supra note 109, at 292-95 (discussing the two licenses) with,
 e.g., Maier, supra note 53, at 102 (no acknowledgement of two fees).
 2005]     COMPOSITION, RECORDINGS & SAMPLING                          21
 to the sound recording are merged.142 The statutory scheme could then
 divide the rate between the two copyright owners, simplifying the pro-
 cess of application and collection so that the only split would occur on
 distribution.143 However, exploring any modification of the statutory
 license may prove moot. In a recent statement before the Subcommit-
 tee on Courts, The Internet and Intellectual Property of the House
 Committee on the Judiciary, The Register of Copyrights, Marybeth Pe-
 ters suggested that the � 115 statutory license "should be repealed and
 that licensing of rights should be left to the marketplace."144
 E. And What About Musicians' Rights?
      Finally, some writers have expressed concern that the practice of
 sampling is taking away the livelihood of musicians and that therefore
 musicians who have played on sampled recordings also should be com-
 pensated by licenses.145 While the former may be true, the conclusion
 is misguided. When musicians are owners or part-owners of the sound
 recording on which they have participated, then the above proposed
 licensing scheme would fairly address any compensation that they
 might be due. A musician who is not a participant in the ownership of
 the copyright (which is more often the case) does not need the same
 statutory protection since he or she is compensated for the work at the
 time of the recording session. Musicians concerned about the possibil-
 ity of their work being sampled certainly can negotiate that considera-
 tion into their fee, or the American Federation of Musicians can do it
 for them, which, in fact, it has.146 While musicians might ask why they
 should not be compensated for the sampled use of their playing, one
 might equally ask why those musicians should be compensated for not
 having to do anything at all.147 A sound recording should not be
   142 Some writers contend that only the copyright holder of the sound recording should be
 compensated; that the copyright holder of the underlying musical composition should have
 no claim on the use of a recording. See Baroni, supra note 4, at 98 ("sampling does not
 violate composition rights at all").
   143 But see Johnson, supra note 9, at 425 ("The benefits of simplification afforded by a
 compulsory scheme along the lines of section 115 are purely illusory.").
   144 Section 115 Compulsory License: Hearing Before the Subcomm. on Courts, the Internet
 and Intellectual Property of the House Comm. On the Judiciary, 108th Cong. (Mar. 11, 2004)
 (statement of Marybeth Peters, The Register of Copyrights), available at http://www.copy
 right.gov/docs/regstat03llO4.html (last accessed Mar. 8, 2005).
   145 Christopher D. Abramson, Note, Digital Sampling and the Recording Musician: A Pro-
 posal for Legislative Protection, 74 N.Y.U. L. REV. 1660, 1662 (1999).
   146 Id. at 1674-76; Abramson later claims that the "current agreement between the AFM
 and the record companies is inadequate." Id. at 1683. Even if this were true, it is unclear
 why Congress should intervene in the contract negotiations.
   147 The line must be drawn somewhere. Should recording engineers who are non-owners
 be legislatively compensated? How about the technicians who set up the recording session?
 22           UCLA ENTERTAINMENT LAW REVIEW                     [Vol. 13:1
 equated with a share of stock, the value and dividends of which may be
 a perpetual source of future income. Such a view does little to support
 the primary aim of copyright: to further the dissemination of new works
 for the general public good.
      Much has been written about sampling, in both legal journals and
 the popular press. An unfortunately large selection of this writing dem-
 onstrates little, if any, perspective or knowledge of the larger history
 and methodology of musical composition as it has existed in Western
 practice for over a thousand years.148 Sampling is merely a recent tech-
 nological development that continues underlying concepts found in that
 practice. As noted above, sampling is the compositional technique of
 manipulating a recorded fragment of sound from a preexisting record-
 ing and then using that fragment as a part of a new composition, real-
 ized as another recording.149 While the technological methodology that
 enables digital sampling is new, the underlying compositional concepts
 of borrowing, quotation, commentary and collage are not; these ideas
 are collectively referred to as "eclecticism."'150
      Eclecticism has been a significant element of the art of music since
  its early history. J.S. Bach, for example, "was notably eclectic, both for
  quoting and for manipulating different styles."'151 Further, many of the
  techniques now associated with sampling (e.g., looping)152 preexist the
  development of the technology which enabled their application in a
  digital context, having been introduced by composers during the forma-
  Those getting pizza for the band? Significantly, the AFM represents musicians, but excludes
  composers, who are generally left to fend for themselves in the marketplace. Why shouldn't
  similar legislation be required to address any inadequate agreements between this latter
  group of musicians and record companies? Abramson is silent on this matter.
  148 For a welcome and informed exception, see Hampel, supra note 1.
  149 See generally Houle, supra note 2, at 880-82.
  150 Bryan R. Simms, Music of the Twentieth Century - Style and Structure 383 (2d ed.,
  Schirmer Books 1996) (1986).
  151 Id. Some writers trace the history of sampling solely in the context of African-Ameri-
  can and African-Caribbean culture. See, e.g., Henry Self, Comment, Digital Sampling: A
  Cultural Perspective, 9 UCLA ENr. L. REv. 347 (2002) ("The conceptual-though not tech-
  nological-roots of sampling originate primarily in the rich musical tradition of Jamaica.").
  Such an analysis is accurate but unnecessarily limiting; it belies the larger reach and impor-
  tance of the underlying concepts, and how these are shared by composers across time, space
  and culture. The latter perspective in no way disparages the stream of influence from those
  more specific generative sources.
  152 "Looping" is the technique of duplicating a short fragment of sound multiple times to
  create a continuous stream of that sound's particular pattern or content.
 2005]      COMPOSITION, RECORDINGS & SAMPLING                            23
 tive years of electronic music composition.153 For example, one of the
 earliest organizations of composers devoted solely to the composition
 of electronic music (using tape machines) was formed in Paris in
 1951.154 Out of this association "emerged tape techniques that became
 standard for decades to follow [including] ... continuous sound loops,
 and intercutting (splicing together unrelated or reordered fragments of
 sound)."155 Certain of these techniques were developed further by
 other composers in the 1960's who found parallels to the techniques in
 other world cultures.156 Additionally, some conceptual ideas incorpo-
 rated in manipulating samples (e.g., elongation of certain musical
 pitches or notes) have antecedents in Western music that are hundreds
 of years old.157 In general, these underlying concepts are often central
 components of music composition, past and present.158 It is unfortu-
 nate that recent technological advances in digital recording media have
 distracted from these historical antecedents.159
 A. Borrowing
      The notion of borrowing musical material to create new works is as
 old as the history of music.160 Beginning in the ninth century, the prac-
 tice of polyphony emerged when composers layered new musical mate-
   154 Id. at 112 (The "Group for Research on Musique Concrete" [translation in original]
 was formed by composers Pierre Schaeffer and Pierre Henri).
   155 Id. A thorough discussion of the development of electronic music composition is
 outside the scope of this article.
   156 See STEVE REICH, WRITINGS ABOUT Music 40 (1974) (West African drumming).
   157 See, e.g., PAUL HENRY LANG, MUSIC IN WESTERN CIVILIZATION 130 (1941) (describ-
 ing how melodies from the earlier part of the Middle Ages [i.e., ninth-century Gregorian
 chant] were used later in that same period as the underlying foundation for new, transforma-
 tive compositions; this foundation is called a "cantus firmus" [fixed song] and in the eleventh
 century it "becomes more and more drawn out while the upper part begins to spin melodies
 over its sluggish line."). For further references to chant, see infra note 161.
   158 See Hampel, supra note 1, at 586 (arguing that sampling is simply a continuation of
 long-standing and accepted practices in music composition, such as the use of quotation). A
 thorough analysis of the general history of music composition is outside the scope of this
   159 There are writers who suggest the reason for this seemingly disparate treatmenit is one
 of cultural bias (or, more strongly, racism). Because sampling lies at the heart of the creative
 work found in hip-hop music, which is itself based in African-American culture, such percep-
 tions may not be unreasonable. See Neela Kartha, Comment, Digital Sampling and Copy-
 right Law in a Social Context: No More Colorblindness!!, 14 U. MIAMI ENT. & SPORTS L.
 REV. 218, 218-19 (1997); accord Anyanwu, supra note 128, at 199. The analysis of this posi-
 tion is outside the scope of this article.
   16' Bridgeport, 230 F. Supp. 2d at 842 ("Since the advent of Western music, musicians
 have freely borrowed themes and ideas from other musicians.").
 24          UCLA ENTERTAINMENT LAW              REVIEW       [Vol. 13:1
 rial on preexisting plainsong melodies.161 The conceptual essence of
 this approach had not changed nearly one thousand years later when
 Beethoven composed sets of variations for the piano, most of which
 were inspired by popular tunes or contemporary operas.162 In our own
 time, the borrowing of musical material from another's work is not only
 unquestioned as an acceptable compositional technique, it is affirma-
 tively included as a pedagogical tool in the education of student com-
 posers, as demonstrated by this assignment in David Cope's Techniques
 of the Contemporary Composer:
     Quote a small segment of your favorite piece of music (other than
     one of your own) in a work for voice and three available instruments.
     Make sure the quotation is generally recognizable, at least in style,
     and set it with an appropriate text so that the quote produces a viable
     and meaningful context for the work as a whole.163
     Note that one point of the assignment is to produce a work
 wherein the quotation is clear and recognizable. In light of that direc-
 tion, it is significant that the assignment makes no mention of any ne-
 cessity to seek permission or a license to quote the source material.
 This is not an instruction to student composers to steal preexisting ma-
 terial; rather, it is indicative of a deep-rooted compositional practice
 that has become accepted over centuries of use.
 B. Distinguishing Borrowing from Adaptation (Derivative Work)
      Borrowing should be distinguished from adaptation. The latter in-
 volves the creation of a new work which is based on a preexisting work.
 Under the statutory definition, a derivative work is one that is based
 upon a copyrighted work.164 Therefore, adaptation, as opposed to bor-
 rowing, is properly seen as the creation of a derivative work. For exam-
 ple, orchestration (or transcription) of a preexisting work is one type of
 compositional adaptation. An arrangement of a preexisting work is an-
   161 "Plainsong" (also known as plainchant or Gregorian chant) connotes single melodies
 sung to Latin texts for liturgical purposes. "Polyphony" is the simultaneous singing (or play-
 ing) of two or more interdependent musical parts. THE HARVARD BRIEF DICTIONARY OF
 Music 228-29 (Willi Apel & Ralph T. Daniel eds., 1960). For the development of poly-
 phony, see generally ALBERT SEAY, MUsic IN THE MEDIEVAL WORLD 78-94 (2d ed. 1975).
 variations are "based on themes ranging from Salieri's Falstaff... to Singspiel tunes by Peter
 Winter and Franz Xaver Siissmayr.").
 added). David Cope is a composer and Professor of Music at the University of California at
 Santa Cruz.
   1'4 17 U.S.C. � 101 (2003).
 2005]     COMPOSITION, RECORDINGS & SAMPLING                           25
 other such type.165 Both of these practices have existed for hundreds of
      For example, Maurice Ravel's Pictures at an Exhibition (1929) for
 orchestra is a complete "retelling" of Modeste Mussorgsky's original
 composition of 1874 for piano solo.167 Other examples include Emer-
 son, Lake and Palmer's 1972 rock arrangement of Aaron Copland's
 Hoedown from his ballet suite Four Dance Episodes from Rodeo
 (1942),168 and Igor Stravinsky's singular arrangement and orchestration
 of the familiar tune Happy Birthday, retitled as Greeting Prelude.169
 These compositions are based entirely upon a preexisting foundational
 source. Unlike borrowing, the totality of these new works is organically
 affixed to the spine of the generative work. Borrowing finds mere in-
 spiration or a symbolic reflection in the preexisting work; such an ap-
 proach should invite courts to use a de minimis analysis rather than
 apply the statutory definition of "derivative work."
 C. Quotation
      The compositional technique of quotation should be seen as a form
 of borrowing, since a composer will generally only be using a small
 fragment of a preexisting work, rather than an entire work.170 The es-
 sence of the concept is that a composer means to evoke an idea, mood
 or correlative thought (or multiple such evocations) via associations a
   165 See, e.g., SAMUEL ADLER, THE STUDY OF ORCHESTRATION 667 (3d ed., W.W. Norton
 2002) (clarifying the difference between transcription and arrangement). The practices of
 orchestration, transcription and arrangement may or may not overlap, depending on the
 circumstances involved. Despite this possibility of overlap, the differences between these
 practices are still more than semantic, but because all three should be considered derivative
 applications, any such difference is irrelevant to this discussion.
   166 Id. at 666 (referring to examples such as Bach's versions of Vivaldi's violin concertos
 and Franz Liszt's transcriptions of all of Beethoven's symphonies, among others).
 score) (Boosey & Hawkes, pocket score, 1942) (translated in the original as "Pictures from
 (Paul Lamm, ed., International Music Co. 1952).
   168 AARON COPLAND, Hoedown, in FOUR DANCE EPISODES FROM RODEO (musical score)
 (Boosey & Hawkes, pocket score, 1942); Emerson, Lake & Palmer, Hoedown, in TRILOGY
 (Cotillion/Atlantic Records 1972) (LP) (re-release, Rhino Records 1996) (CD).
   169 IGOR STRAVINSKY, GREETING PRELUDE (musical score) (Boosey & Hawkes 1956).
 Stravinsky wrote this 45-second piece in 1955 to honor the 80th birthday of conductor Pierre
   170 A notable exception is the third movement of Luciano Berio's SINFONIA (1968) which
 is constructed using the entire Scherzo from Gustav Mahler's SYMPHONY No. 2 (1897). For
 a further discussion of this work in the context of collage, see infra notes 197-99 and the
 accompanying text.
 26           UCLA ENTERTAINMENT LAW REVIEW                    [Vol. 13:1
 listener may have developed with the quoted material.171 By placing
 this material in a new context, the composer uses it not necessarily for
 the inherent properties of the material itself, but for its symbolic nature
 (e.g., borrowing as metaphor).172 While this technique dates back hun-
 dreds of years, its use grew dramatically over the course of the twenti-
 eth century.173
      For example, the early American composer Charles Ives (1874-
 1954) is renowned for his use of quotation, whether for satirical, politi-
 cal or nostalgic purposes.174 One Ives scholar, John Kirkpatrick, com-
 piled an "Index of Tunes" quoted by the composer in his music.175
      This [index] includes over fifty hymns, more than twenty patriotic
      songs and military tunes, some thirty-five popular songs, about a
      dozen popular tunes (primarily instrumental), and the same number
      of college songs, besides 'other music' (quotations from Handel,
      Haydn, Beethoven, Brahms, Tchaikovsky, Debussy - and his own
      Ives' resulting complex of original material synthesized with quota-
 tions from multiple sources has been described as a "combinational"
 approach to composition.'77 Here, the art of composition becomes "a
 matter of balancing and reconciling these divergent elements, and an
 important aspect of the expressive content derives from the unexpected
 associations called up by the conjunction .... [The borrowed materials
 thus] are transformed by their surroundings."'78 Compare this analysis
 to the following description of sampling as a transformational practice
 in hip-hop music:
      [S]amples are more often than not small portions of songs. These
      portions are being used in completely different ways in the new
      songs. Because they are not working in the same way as in the origi-
      nal song, they are inherently different from their sources .... They
   171 See Christopher Ballentine, Charles Ives and the Meaning of Quotation in Music, 65/2
 THE MUSICAL QUARTERLY 167, 168 (Apr. 1979) ("[The purpose of quotation] is the com-
 munication of an attitude toward that original occasion - a way not only of hearing but also of
 responding, feeling, relating, thinking - which is incarnated in the dialectic between, on the
 one hand, the fragment and the association it activates - its role as a symbol - and, on the
 other, the new musical context.") (italics in original).
 CAL STYLE IN MODERN EUROPE AND AMERICA 411 (1991) ("[The evocation] ... placed in
 unfamiliar surroundings ... can be transformed into something new and strange, reinter-
 preted and revitalized through confrontation with the present.").
   173 MORGAN, supra note 172, at 410-11.
   174 Id. at 141.
 2d ed. 1966).
   176 Id. (quotation marks and parentheses in original).
   177 MORGAN, supra note 172, at 143.
   178 Id.
 2005]     COMPOSITION, RECORDINGS & SAMPLING                        27
     are pieces of language that generate new meanings in their new con-
     texts. The new meanings are clear and distinct from their original
 D. Quotation as Comment
      One of the explicit exceptions to copyright infringement under the
 fair use doctrine is the use of quotation for "comment."''80 Whether the
 comment is for a political, historical, ironic or some other purpose (or
 any combination thereof) should be broadly construed in the constitu-
 tional interests of free expression. Often, the use of quotation as com-
 ment involves multiple layers of interpretation. One such example may
 be found in a scene from Stephen Sondheim's musical Merrily We Roll
 Along (1984).181 Based on a 1934 play of the same name,182 the musical
 is broadly about friendship.183 Structured with a reverse chronology,
 the show begins with the principal characters bitter and isolated from
 one another and then leads us back through the various stages of disso-
 lution in their relationships. By the finale of the show we encounter
 three youthful artists and friends, expressing their optimistic hope for
 the future. This expression of hope is poignant and bittersweet, as we
 have already seen the tragic scope of their future, crushed by the vicissi-
 tudes of life and abetted by their own character flaws.
      In a specific scene from Act II, we see a young composer and his
 lyricist partner auditioning one of their songs for a Broadway producer.
 Before the quotation is introduced, Sondheim's scene is already
 layered: the song being auditioned by the characters (Who Wants to
 Live in New York?) is a fragment within the larger musical framework
 of Sondheim's song (Opening Doors), which is ultimately propelling
 the story.184 In the scene, the producer hears the composer play a frag-
 ment of the song while his lyricist partner sings, but the producer soon
 interrupts them and "says" (sings):
   179 VAIDHYANATHAN, supra note 8, at 145. This suggests a more sophisticated use than
 the Sixth Circuit's limited perspective that artists sample merely to "save costs" or "add
 something to the new recording." Bridgeport, 410 F.3d at 802.
   180 17 U.S.C. � 107 (2003).
   181 STEPHEN SONDHEIM (music & lyrics) & GEORGE FURTH (book), MERRILY WE ROLL
 ALONG (musical score) (Revelation Music & Rilting Music 1984).
   183 CRAIG ZADAN, SONDHEIM & Co. 270 (2d ed., Harper & Row 1986) (1974).
   184 SONDHEIM, supra note 181, at 199-224. This structure is itself a reference to the age-
 old theatrical device of a play within a play (see, e.g., WILLIAM SHAKESPEARE, HAMLET, act
 3, sc. 2, 92 (Tucker Brooke & Jack Randall Crawford eds., rev. ed., Yale University Press
 1947) (1917)).
 28           UCLA ENTERTAINMENT LAW             REVIEW       [Vol. 13:1
      Write more, work hard -
      Leave your name with the girl.
      Less avant-garde -
      Leave your name with the girl.
      Just write a plain old melodee-dee-dee-dee-dee-dee..�
      Dee-dee-dee-dee-dee-dee ...185
      The repetition of the last syllable from the word "melody" is sung
 to the signature tune of the Richard Rodgers and Oscar Hammerstein
 II song Some Enchanted Evening from their musical South Pacific
 (1949),186 but it is layered on top of Sondheim's own music, which con-
 tinues as the accompaniment.187 The slightly disharmonious result is
 intended to place what is, by itself, a romantic melodic phrase into a
 somewhat darker context. The commentary associated with this quota-
 tion is subtle, brilliant and amusing in its multiple effects. With one
 phrase of music, Sondheim simultaneously:
      (a) criticizes the conservative nature of Broadway producers who
  only want to hear more of the same, rather than explore the new;
      (b) ironically paints a picture of the way his own work has been
  received and characterized by some producers and critics;188 and
      (c) acknowledges a debt to one of his most significant forebears,
  his early mentor, Oscar Hammerstein 11.189
      By using the quotation in this particular dramatic context,
  Sondheim communicates by symbolic means with those in his audience
  who understand the lingua franca of the American musical theater in
  the late twentieth century - its musical dialect, history and politics.
  Sondheim did not seek, nor did he need to seek, permission to utilize
  this quotation from Rodgers and Hammerstein's musical in order to
  obtain these effects; such a transformation of the musical fragment in-
  volved clearly qualifies as fair use. When rap musicians similarly com-
  municate via comparable uses of preexisting fragments, albeit in the
  185 SONDHEIM, supra note 181, at 215-16.
  cal score) (Williamson Music 1949); Sondheim alters the last note of the tune.
  187 SONDHEIM, supra note 181, at 215-16 (specifically in mm. 164-70).
  258 (updated ed. Da Capo Press 1992).
  gan Press 1993); Sondheim as a teenager lived in Doylestown, Pennsylvania, near the estate
  of Oscar Hammerstein II. Sondheim recounts an afternoon spent with Hammerstein during
 which the successful lyricist criticized some of Sondheim's earliest efforts: "I learned in that
 afternoon more than most people learn about song writing in a lifetime." BANFIELD, supra,
 at 14.
 2005]     COMPOSITION, RECORDINGS & SAMPLING                         29
 context of sampling, how can one reasonably suggest such communica-
 tion is not a fair use?'90
 E. Collage
      In a further examination of this idea, musical works that incorpo-
 rate fragments of other compositions may "serve as commentaries on
 memory, time, history and taste."'91 This approach is one that is gener-
 ally recognized as an accepted aesthetic of postmodern art and cul-
 ture.192 For example, collage technique is one of the central ideas
 behind the work of classical composer Bernd Alois Zimmermann
 (1918-70). In his orchestral work Musique pour les Soupers du Roi Ubu
 (Music for the Repasts of King Ubu, 1966), fragments of music by Paul
 Hindemith, Wagner, Mussorgsky and Beethoven are all linked in a fan-
 tastic mosaic, presented against a background of Renaissance
 dances.193 Zimmermann's entire work is created from these borrowed
 materials, assembled by the composer using a combinational approach
 to composition.'94 Underlying this method is Zimmermann's interest
 in the concept of time. Zimmermann states, "In composition (which is:
 organization of time) time is in a certain sense 'overcome'; it is brought
 to a standstill ... what we call present is only a barrier between past
 and future."'195 Parallels to this re-contextualization of time have been
 drawn in discussions on the use of sampling in rap music, described by
 one writer as "the infusion of urban contemporary styling to classic
   19 See, e.g., Greg Dimitriadis, Hip-Hop: From Live Performance to Mediated Narrative,
 15 No. 2 POPULAR MUSIC 179, 186 (1996) ("[The rap group] Public Enemy envisioned an
 Afro-American community which could be linked together through postmodern media
   191 SCHWARTZ & GODFREY, supra note 153, at 243.
   192 See, e.g., Jonathan D. Kramer, Beyond Unity: Toward an Understanding of Musical
 CAL STUDIES 28 (Elizabeth West Marvin & Richard Hermann eds., 1995) ("Pastiche and
 collage, primary forms of postmodern discourse, encourage the perceiver to make his or her
 own perceptual sense of a work of art."). A closer examination of the aesthetics of
 postmodernism is outside the scope of this article.
   193 SCHWARTZ & GODFREY, supra note 153, at 246; see also MORGAN, supra note 172, at
   194 While the music of Wagner, Mussorgsky, Beethoven and the Renaissance dances
 would all be public domain, the music of Zimmermann's contemporary, Paul Hindemith,
 conceivably would have been protected by copyright.
   195 SCHWARTZ & GODFREY, supra note 153, at 246-47 (parentheses and ellipsis in
   196 Anyanwu, supra note 128, at 191 ("[The use of] samples that are immediately apparent
 [is] a technique that I call creative nostalgia.").
 30           UCLA ENTERTAINMENT LAW              REVIEW       [Vol. 13:1
      Another example of collage is the third movement of Luciano
 Berio's orchestral work Sinfonia (1968).197 Berio utilizes the Scherzo
 from Gustav Mahler's Symphony No. 2 (1897) as the foundation for his
 own assemblage of both musical and spoken material.198 In Berio's
 composition, the Mahler work serves as the primary layer, while other
 fragments are built upon it.199 This compositional concept (the layering
 of materials) harkens back to Medieval polyphony200 but has been a
 central part of the postmodern aesthetic since the late twentieth cen-
 tury. It surely is not a coincidence that such layering appeared in the
 world of hip-hop composition at exactly the same time:
      As it emerged on the American music scene in the late 1970s, hip-
      hop music was composed of two layers of creative raw material. On
      the top was the vocalization, the rap itself; underlying the rap tracks
      is the bed of music.201
      As this brief overview of Western music composition demon-
  strates, the underlying concepts and aesthetics of sampling have long
  been a part of this art form's history. While the recent technological
  development of sampling clearly raises issues in relation to copyright
  law, it should not be seen as some Hydra that will bring about the ruin
  of music and the livelihood of musicians.202 Gradually extending copy-
  right protection in both length and scope is contrary to the growth of a
  healthy creative environment and culture. It is also contrary to consti-
  tutional principles that support the higher purpose of furthering the
  public good, rather than mere profit-taking and near-perpetual control
  of art by "owners." What has been lost in the debate over sampling is
  this simple point: the incentive of copyright protection is not the goal.
  When such a metamorphosis takes place, furthered by ill-considered
  bright-line rules, then we may truly fear the ruin of Music.
  197 LUCIANO BERIO, SINFONIA (musical score) (Universal Edition 1968).
  198 GUSTAV MAHLER, SYMPHONY No. 2 (musical score) (rev. ed., Universal Edition
  1971). The musical references range from Monteverdi to Stockhausen; the spoken text in-
  cludes excerpts from Samuel Beckett's novel THE UNNAMEABLE. See MORGAN, supra note
  172, at 412-13.
  199 Id.
  200 See supra note 161 and the accompanying text.
  201 VAIDHYANATHAN, supra note 8, at 134-35.
  202 See, e.g., Abramson, supra note 145, at 1668; contra, The Norman Lear Center, Ready
  to Share: Fashion and the Ownership of Creativity, http://www.learcenter.org/html/projects/
  overviewl.php?cm=ccc/fashion (this was an event held January 29, 2005, at the USC An-
  nenbergNorman Lear Center in Los Angeles which "explored the fashion industry's enthusi-
  astic embrace of sampling, appropriation and borrowed inspiration, core components of
 every creative process.") (last visited Mar. 8, 2005; on file with author).
 2005]    COMPOSITION, RECORDINGS & SAMPLING                     31
     A balance needs to be struck between copyright holders and cre-
 ators of new work, and Congress and the courts must strive for equity
 in seeking this balance. In doing so, a variety of options should be wo-
 ven into the fabric of the law. Courts should maintain the possibility of
 a de minimis analysis and support the doctrine of fair use if it is applica-
 ble to the circumstances of a given case. Additionally, Congress should
 redesign the compulsory license system to accommodate more signifi-
 cant uses of preexisting recordings. Such a legal and legislative frame-
 work will better address copyright issues within the complex nexus of
 music composition, sound recordings and digital sampling in the
 twenty-first century.
     A rose, carefully preserved and framed under glass, may be a thing
 of beauty and a fascinating object to ponder, but - once taken from the
 garden and so mounted - it becomes incapable of regeneration. While
 part of the basis of its beauty is this timeless perfection, the illusory
 order and calm invites moribundity. When creative musical thought is
 so encased, can the withering of culture, and perhaps its death, be far

Volume 03, Issue 1, pp 1-40, Blumstein

Nine Characters in Search of an Author: The Supreme Court’s Approach to “Falsity” in Defamation and Its Implications for Fiction

Glenn J. Blumstein*


In a 1983 parody, Larry Flynt put words in Jerry
Falwell’s mouth to “assassinate” his reputation.’ Twenty-five
centuries earlier,2 Aristophanes employed the same technique,
but with greater success. Not only was Socrates fatally
poisoned by the playwright’s words,3 but, graciously enough,
never sued for defamation. Socrates was a sport: “I am twitted
in the theater as I would be at a drinking party.”4 Spoken like
a philosopher, perhaps, but again we have Socrates the puppet,
this time with a biographer, Plutarch, at the strings. Plutarch’s
intent here is, of course, quite different. The biographer aims
for his work to be taken as a conscientious reconstruction of

Associate, Davis Wright Tremaine, Seattle, Washington. Stanford Law
School (J.D. 1993) (associate editor, Stanford Law Review); Playwright’s Workshop,
University of Iowa (M.F.A. 1987); Amherst College (B.A. 1981) (magna cum laude).
I Joint Appendix on Appeal 898 (cited in Brief for Respondent, Hustler
Magazine Inc., v. Falwell, 485 U.S. 46 (1988)).
2 423 B.C., THE CLOUDS.
3 This bit of overstatement is drawn from Plato’s Apology where the author
effectively charged Aristophanes with malicious slander that “directly or indirectly,
created the formal accusation brought against Sokrates in 399 B.C.” resulting in his
being put to death. WILLIAM ARROWSMITH, The Clouds 4-5, in THREE COMEDIES
BY ARISTOPHANES (William Arrowsmith, ed., 1969).


historical truth, an accurate portrayal, though informed with an
ineluctable degree of subjectivity. Non-fiction, generally, hopes
to be believed, taken literally, found consistent with the outside
world, its details taken as fact. If fiction asks for belief, it is
certainly not in its details, in its accurate correspondence to
actual events or persons in the world.5
The consistency valued in a work of fiction is a non-
referential consistency, an internal consistency of style,
perspective, or voice. The rules it must live by are of its own
construction and those of its genre. It is, by definition, non-
literal. In our defamation law, however, this divergence of
authorial intention is a distinction without a difference.
Journalistic reporting, “inventive” biography, and works of
fiction are all judged by the same standard: falsity.
How one applies this standard to works which, by self-
definition, do not make descriptive truth claims, is far from
obvious. This past decade saw a rash of law review articles and
notes parsing the divergent approaches of lower courts. As
these cases demonstrate, the chosen analytical approach to
“falsity” has profound consequences. It determines both the
type of speech that will find protection and the cost of that

Fiction may, of course, employ realism as a style to achieve verisimiltude,
but does so to enhance an illusion of reality, not to describe an acutality. This point
is well made by John Barth in his short story “Lost in the Funhouse.” Having
identified one of the characters as “Magda G ” who lived on “B
Street in the town of D , Maryland,” the narrator turns to the reader and
Initials, blanks, or both were often substituted for proper names in
nineteenth-century fiction to enhance the illusion of reality. It is as
if the author felt it necessary to delete the names for reasons of tact
or legal liability. Interestingly, as with other aspects of realism, it
is an illusion that is being enhanced, by purely artificial means.
JOHN BARTH, LOST IN THE FUNHOUSE 69-70 (Bantum Books, 8th prtg. 1978)
(originally appearing in THE ATLANTIC MONTHLY, Nov. 1967).

[Vol. 3:1


protection, financially for the litigation defendant and
"informationally"--in lost (chilled) speech--for society. Though
the Supreme Court has not, to this day, explicitly addressed the
issue of defamation in fiction, two fairly recent cases, Hustler
Magazine, Inc., v. Falwell6 and Milkovich v. Lorain Journal,
Co.7 provide, at minimum, a model of analysis. Despite the
Court's unwillingness to so label it, Flynt's satire of Falwell is,
as a satiric fantasy,s essentially fiction. It makes no descriptive
truth claims.9 The mode of analysis the Court applies in
Hustler, and the Court's more explicit shaping of this "falsity"
analysis in Milkovich, is instructive. Though the analytical
framework, as this Article will argue, fails to adequately
account for the distinctions between fiction and non-fiction, it
likely represents the limit of protection the Supreme Court is
ready to grant fiction.


At common law, the burden of proof fell on the
defendant of a libel action to demonstrate that what he
published was true.'° The Supreme Court's
constitutionalization of libel law has altered this for all but a
small minority of cases. First, in New York Times Co. v.
Sullivan, the Court declared that the constitutional guarantee of

6 485 U.S. 46 (1988).
7 497 U.S. 1 (1990).
See infra note 108, and accompanying text.
See infra Part III.B.2, and accompanying text.
10 Unless, of course, he could find protection in an alternative, merely
"qualified" or "conditional" privilege, such as "fair and accurate report." Truth, on
the other hand, was an absolute privilege and was usually a complete defense to a
libel action even if the defendant thought the statement false at time of publication.
See, e.g., Craig v. Wright, 76 P.2d 248 (Okla. 1938). But see, Hutchins v. Page, 72
A. 689 (N.H. 1909).



“uninhibited, robust, and wide-open” debate on public issues
required that a “public official” alleging defamation prove that
“the statement was made with ‘actual malice’–that is, with
knowledge that it was false or with reckless disregard of
whether it was false or not.”" Public officials, then, as a
threshold matter, have the burden of proving the statement false.
The burden of proving falsity was soon extended to public
figures,12 and then to non-public persons “intimately involved
in the resolution of important public questions or [who], by
reason of their fame, shape events in areas of concern to society
at large.”’13 Finally, it was extended to all plaintiffs seeking
damages for speech of “public concern.”’4 While the Court
has found a limit to what it will consider of “public
concern,”’5 the lower courts have interpreted the phrase
broadly to include such matters as the authenticity of stained
glass windows” and the efficacy of rain repellent.’7

11 376 U.S. 254, 270, 279-80 (1964).
12 Curtis Publishing Co. v. Butts, 388 U.S. 130 (1967).
13 Gertz v. Robert Welch, Inc., 418 U.S. 323, 336-37 (1974) (quoting Butts at
164). The latter category is commonly referred to as a limited-purpose public figure.
14 Phila. Newspapers, Inc. v. Hepps, 475 U.S. 767, 776-77 (1986). Although
Hepps extended the burden of proving the falsity of speech of public concern to
purely private plaintiffs, Justice O’Connor’s majority opinion is limited to media
defendants. Id at 779, n.4. There was no majority, however, to support that
limitation. Id. at 779-80 (Brennan, J., concurring).
is Dun & Bradstreet, Inc. v. Greenmoss Builders, Inc., 472 U.S. 749 (1985)
(holding that a confidential credit report to five subscribers, mistakenly reporting a
business bankruptcy, is not of “public concern”). The Court offered no standard for
judging the question of what constitutes “public concern,” saying only that it must be
“determined by [the expression's] content, form, and context … as revealed by the
whole record.” Id. at 761 (alteration in original) (quoting Connick v. Myers, 461
U.S. 138, 147-48 (1983)).
16 McNally v. Yarnall, 764 F. Supp. 838, 847 (S.D.N.Y. 1991) (generalizing
the issue to one of valuation in the art market and the tax implications of art
17 Unelko Corp. v. Rooney, 912 F.2d 1049, 1056 (9th Cir. 1990), cert denied,
499 U.S. 961 (1991) (generalizing the issue to one of product warranties).

[Vol. 3:1


The Supreme Court has demarked two types of
expression which are, by force of the falsity requirement,
constitutionally immune from liability:
A) statements that do not "contain a provably false
factual connotation;""' and
B) statements that "cannot 'reasonably [be]
interpreted as stating actual facts’ about an
Before looking at how the Court employs these purportedly
distinct categories, whether they can function independently, and
what they might mean, it is important to first note their
profound procedural meaning: uniquely inexpensive summary
judgment for the defendant.

A. Chill of Litigation Costs

How inhibiting a shadow libel law casts on would-be
speakers can be viewed as a function of the likelihood of suit
multiplied by the potential costs of litigating a defense. The
plaintiff’s burden of proving falsity does, generally, reduce the
likelihood of her bringing suit in much the same way as does
her burden of proving fault. For the defendant, however, the
two exemptions to liability borne of the falsity requirement (set
forth in the previous paragraph), is an initial question of law
that is far less expensive to litigate. Compared to “disproving”
fault, these two grounds for summary judgment require de
minimis discovery, and hence minimal time and cost, because
the inquiry focuses on the language of the statement, as opposed

Is Milkovich v. Lorain Journal Co., 497 U.S. 1, at 19-20 (1990) (citing Phila.
Newspapers, Inc. v. Hepps, 475 U.S. 767 (1986)).
19 Milkovich, 497 U.S. at 20 (alteration in original) (emphasis added) (quoting
Hustler Magazine, Inc. v. Falwell, 485 U.S. at 50) (emphasis added).



to author’s state of mind.20 The cost disparity has particularly
widened since the Supreme Court’s holding in Herbert v.
Lando,21 that it is reasonable for a plaintiff to conduct
extensive discovery of the editorial process on the question of
fault, making a defense on that question not only increasingly
costly and time consuming, but a far less fertile ground for
summary judgment.22 The availability of inexpensive
summary judgment on the basis of the two exceptions borne of
the falsity requirement has, accordingly, grown in importance.
Additionally, it is more widely available than defending on
“fault,” for the latter is not available where the plaintiff is a
non-public figure.


The two types of statements that the Court has defined as
immune to falsity claims are best described by the cases from
which they were drawn.

20 See Jeffrey E. Thomas, Comment, Statements ofFact, Statements of Opinion,
and the First Amendment, 74 CAL. L. REv. 1001, 1028 (1986).
21 441 U.S. 153 (1979) (holding that there is no First Amendment privilege
inhibiting extensive pretrial discovery of a defamation defendant’s editorial process,
while recognizing that the mushrooming of litigation costs is commonly traceable to
pretrial discovery). See also Cendali, Of Things to Come–The Actual Impact of
Herbert v. Lando and a Proposed National Correction Statute, 22 HARV. J. ON
LEGIS. 441, 465-72 (1985) (examining the chilling effect on investigative journalism
from Herbert’s boost of discovery costs). See also, Massing, The Libel Chill: How
Cold Is It Out There, COLUM. JOURNALISM REv., 31-43 (May-June 1985).
22 See Hutchinson v. Proxmire, 443 U.S. 111, 120 n.9 (1979) (holding that
actual malice’s fault requirement “does not readily lend itself to summary
disposition”); HENRY R. KAUFMAN, Trends in Damage Awards, Insurance Premiums
and the Cost of Media Libel Litigation, in THE COST OF LIBEL 1, 8 (E. Dennis & E.
Noam eds., 1989) (“[T]here is little question that inquiry into the subjective state of
mind of the journalist or publisher has substantially increased the extent, duration and
cost of libel litigation–not to mention its intrusiveness–even when that litigation can
be disposed of on pretrial motion.”).

[Vol. 3:1


A. Without a "provably false factual connotation ,23

For the sixteen years prior to its decision in Milkovich,
the Supreme Court, and lower state and federal courts, had
employed the term "opinion" to distinguish those statements
that, unlike statements of "fact," were immune from being
found false. This analytical approach grew from the invariably
cited authority of Justice Powell's dictum, writing for the Court
in Gertz v. Robert Welch, Inc.:

Under the First Amendment there is no such thing
as a false idea. However pernicious an opinion
may seem, we depend for its correction not on the
conscience of judges and juries but on the
competition of other ideas. But there is no
constitutional value in false statements of fact.24

"Opinion" came to be used as a conclusory label of immunity
for statements that, either by the qualified manner in which they
were expressed or by the very nature of the assertion made,
implicated little more than the author's subjective view. Typical
of the former were statements qualified by signals of conjecture
such as "I think . ...,,25 Typical of the latter were statements

23 See supra, note 18.
24 418 U.S. 323, 339-340 (1974) (finding it constitutionally required that even
private plaintiffs prove fault, though not "actual malice's" reckless or intentional state
of mind required of public plaintiffs.) This "ha[d] become the opening salvo in all
arguments for protection from defamation actions on the ground of opinion” despite
the fact that Gertz itself in no way raised the question. Milkovich, 497 U.S. at 18
(quoting Cianci v. New Times Publishing Co., 639 F.2d 54, 61 (2d Cir. 1980).
25 See, e.g., Information Control Corp. v. Genesis One Computer Corp., 611
F.2d 781, 784 (9th Cir. 1980) (citing the introductory qualifier “[In] the opinion of
Genesis’ management” as mitigating the statement’s factual nature). But see Cianci,
639 F.2d at 64 (“It would be destructive of the law of libel if a writer could escape
liability for accusations of crime simply by using, explicitly or implicitly, the words



[Vol. 3:1

a) too "loosely definable" or "variously interpretable" to
carry certain meaning;` or
b) expressing only personal preference (e.g. like, dislike,
admiration, contempt).27
In the case of type "a" statements, disproof is frustrated for
want of a fixed meaning.28 In type "b" comments, the only
fact susceptible to disproof is whether the statement accurately
portrays the author's actual preference. Hence the defendant
can only be shown to have lied about himself, not about the
In Milkovich, the Supreme Court declared this approach

'I think'.") (quoted, with the significantly broadening substitution of "defamatory
conduct" for the term "crime," by Justice Rehnquist's majority opinion in Milkovich,
497 U.S. at 19.
26 Buckley v. Littell, 539 F.2d 882, 895 (2d Cir. 1976), cert. denied 429 U.S.
1062 (1977) (declaring the author's description of William F. Buckley as a "fellow
traveler" of "fascists" too imprecise in meaning to support a libel claim). For other
terms whose impression has been found to render them immune to disproof see Fudge
v. Penthouse Int'l Ltd., 840 F.2d 1012, 1015-17 (1st Cir.), cert. denied, 488 U.S. 821
(1988) (holding the word "amazon," even if taken simply to mean "masculine
woman," is too imprecise a term to be provably false); Rinaldi v. Holt, Rinehart &
Winston, Inc., 42 N.Y.2d 369, cert. denied, 434 U.S. 969 (1977) (declaring that in
contrast to the term "corrupt," the adjective "incompetent" when applied to a judge
was insufficiently imprecise). These have been described as "paradigm" opinions for
their merely reflecting "the author's political, moral, or aesthetic views." Oilman v.
Evans, 750 F.2d 970, 978 (D.C. Cir. 1984) (en banc), cert. denied, 471 U.S. 1127
(1985) (offering as the example of such a paradigm opinion--"Mr. Jones is a
despicable politician.").
27 The Ninth Circuit captured the point by citing the old adage, "You should
not say it is not good. You should say you do not like it, and then, you know, you're
perfectly safe." Unelko Corp. v. Rooney, 912 F.2d 1049, 1053 n.2 (9th Cir. 1990),
cert. denied 499 U.S. 961 (1991) (quoting JAMES MACNEIL WHISTLER, WORKMAN
QUOTE-A-DAY CALENDER at June 26, 1990). See also, Mr. Chow of New York v.
Ste. Jour Azur, 759 F.2d 219, 226 (2d Cir. 1985) (finding restaurant reviewer's
derision of dishes incapable of defamatory falsehood).
28 "[W]e do not think plaintiffs are entitled to pick and choose from among the
various possible definitions. . . .” Fudge, 840 F.2d at 1016.


analytically flawed and a misconstruing of Powell’s dictum in
Gertz. That passage was not “intended to create a wholesale
defamation exemption for anything that might be labeled
‘opinion.”"’2 Rather, the Court asserted, the term “opinion”
was meant only in the narrow sense as a synonym for “idea” in
the sentence preceding it. Hence, the passage was “merely a
reiteration of Justice Holmes’ classic ‘marketplace of ideas’
concept”"3 and encompassed only those statements “that could
be corrected by discussion.’
The statements at issue in Milkovich had been published
in a sports column of a daily newspaper32 under author J.
Theodore Diadiun’s photo and caption “TD Says.” Milkovich,
the local high school wrestling coach, had, following a hearing,
been censured and his team suspended from the state tournament
because of a brawl at a recent meet. Milkovich testified at the
hearing, and again in a suit to enjoin the suspension. The
author, having witnessed both the fight and the hearing, wrote
that the coach had taught his students a “sad” lesson: “If you get
in a jam, lie your way out. .. . Anyone who attended the meet
… knows in his heart that Milkovich … lied at the hearing
after . . . having given his solemn oath to tell the truth.”’33
Citing Gertz, the trial court granted the defendants
summary judgment on the grounds that the column was

29 Milkovich, 497 U.S. at 18
30 Id. (citing Abrams v. United States, 250 U.S. 616, 630 (1919) (Holmes, J.,
dissenting) (“[T]he ultimate good desired is better reached by free trade in ideas–that
the best test of truth is the power of the thought to get itself accepted in the
competition of the market …. “)).
31 Id. (quoting Cianci, at 62 n. 10). Implicitly, then, the Court is asserting that
falsefacts are not “correctable,” but fails to explain what it is that makes them more
resistent to counterstatements and proofs. The Court makes no effort to show that
the difficulties inherent in proving a negative are any less present in countering
statements of opinion than statements of fact.
32 The News-Herald, circulating in Lake County, Ohio.
33 See Milkovich, 497 U.S. at 4-5.



constitutionally protected opinion.34 The Ohio Supreme Court
ultimately affirmed,35 analyzing the statements under the “test”
that dominated the lower courts prior to Milkovich, developed,
en banc, by the D.C. Circuit in Oilman v. Evans.36 It
disaggregates the “totality of the circumstances”37 into four
parts, considering: 1) the precision of meaning carried by the
allegedly defamatory words themselves;38 2) the degree to
which the statements are verifiable;39 3) the full textual context
of the statement;40 and 4) the broader social context.4′ This
final factor is sensitive to a reasonable reader’s discriminating
responses to distinct genres of writing: editorial versus
reportage, lampoon versus research monograph.42
Though the Ohio Supreme Court found that factors one
and two favored treating Diadiun’s statements as factual
assertions,43 factors three and four “trumped”44 them to
render the statements protected opinion. The court cited, per
factor three, the column’s caption “TD Says”’45 as signaling to
“even the most gullible reader” that the article was mere
“opinion.”46 Considering factor four, the court referred to the
sports page as “a traditional haven for cajoling, invective, and

34 An unreported opinion summarized at Milkovich, 497 U.S. 1, 8.
35 Scott v. The News-Herald, 25 Ohio St. 3rd 243 (1986).
36 750 F.2d 970 (D.C. Cir. 1984) (en banc), cert. denied, 471 U.S. 1127
37 Id. at 979.
38 Id. at 979-80.
39 Id. at 979, 981.
40 Id. at 979, 982.
41 Id. at 979, 983.
42 Id at 983-84.
43 Scott, Ohio St. 3d at 251.
44 This term, ringing of disapproval, is Milkovich’s. 497 U.S. at 9.
45 Scott, 45 Ohio St. 3d at 252.
46 Id.
47 Id at 253.

[Vol. 3:1



Without specifically addressing either of these last two
considerations, the Supreme Court implicitly disapproved of
both by refusing to broaden the scope of its contextual
considerations any wider than “the general tenor of the
article.”"4 In stark contrast to the dissent,49 it gave absolutely
no effect to the author’s op-ed type self-labeling (“TD says”) or
to any genre signaling (sports columns).5″ The obvious
implication of this approach for works of self-proclaimed fiction
is explored below.
Regarding cautionary or conjectural language generally,
the Court explicitly denied it any weight in construing falsity.
Its analysis on this point constitutes, in fact, Milkovich’s chief
semantic and analytical instruction. Semantically, the Court
made clear the term “opinion” has no constitutional import.5″

48 Milkovich, 497 U.S. at 21.
49 Justice Brennan, joined by Justice Marshall in dissent, gave explicit weight
to the genre of speech as it affects a reasonable reader’s expectations: “Certain
formats-editorials, reviews, political cartoons, letters to the editor-signal to the reader
to anticipate a departure from what is actually known by the author as fact.” Id at
50 In Immuno v. Moor-Jankowski, 497 U.S. 1021 (1990), the Supreme Court
vacated a state appellate court’s granting defendants summary judgment, and
remanded for further consideration in light of Milkovich. On remand, the New York
Court of Appeals read Milkovich to foreclose consideration of Oilman factors three
and four. Immuno v. Moor-Jankowski, 77 N.Y.2d 235, 244-45 (1991), cert. denied
500 U.S. 954 (1991) (“The Supreme Court’s failure to mention either point becomes
particularly telling when its writing is laid against the State court opinion and Justice
Brennan’s dissent.”). The court felt obliged to resort to state constitutional law in
order to consider the mitigating fact that the statements at issue were in a letter to the
editor. But see Phantom Touring, Inc. v. Affiliated Publications, 953 F.2d 724, 729
n.9 (Ist Cir. 1992) (weighing the fact that statements appeared in a theater column
and asserting “[w]e do not understand [Milkovich] to have rejected the relevance of
format, but simply to have discounted it in the circumstances of that case”).
51 After Milkovich, “the threshold question in defamation suits is [no longer]
whether a statement ‘might be labeled ‘opinion,” but rather whether a reasonable
factfinder could conclude that the statement ‘implies an assertion of objective fact.”‘
Unelko Corp. v. Rooney, 912 F.2d 1049, 1053 (9th Cir. 1990), cert. denied, 499 U.S.
961 (1991) (affirming the district court’s grant of summary judgment, and finding


Analytically, the labels “opinion” and “fact” effect “an artificial
dichotomy,”52 because the former often “impl[ies] an assertion
of objective fact.”53 By example, the Court offers the
statement “In my opinion John Jones is a liar,” as implying the
speaker knows facts which make the belief reasonable.54 The
addition of qualifying, conditional language does not diminish
the factual nature of the underlying assertion.”
Applying this analytical approach, the Court gave no
mitigating effect to the column’s conjectural qualifiers, such as
“seemed,” “probably,” or “apparently,” in its finding that the
statements at issue could reasonably be read to imply that

that the comment of the defendant, “60 Minutes” commentator Andy Rooney, that
plaintiff’s product “didn’t work” was protected as “opinion”). One commentator has
gone so far as to characterize Milkovich as affecting solely a semantic change.
41 DUKE L.J. 415, 417 (1992).
52 Milkovich, 497 U.S. at 19. See, White v. Fraternal Order of Police, 909 F.2d
512, 522 (D.C. Cir. 1990) (“[T]he [Milkovich] Court rejected the practice, developed
by lower courts, of applying a strict dichotomy between assertions of fact and
assertions of opinion”) (citing the practice in Oilman, 750 F.2d 970).
53 Milkovich, 497 U.S. at 18. See White, 909 F.2d at 523 (“A defamation by
implication . . . is not treated any differently than a direct defamation once the
publication has been found capable of a defamatory meaning”).
54 Milkovich, 497 U.S. at 18. The Court here takes this a step further than
lower courts which had followed the Restatement Second of Torts on this point.
Where the Restatement found the statement actionable unless it fully stated the fact
on which it was based, the Milkovich Court asserts that, even if the speaker’s
assessment of accurate facts is “erroneous,” the speaker is still liable.
55 “Simply couching such statements in terms of opinion does not dispel these
implications” or mitigate their potential “damage to reputation.” Id at 19. Contrast
the claim in Oilman, which Brennan cites in his Milkovich dissent, Id. at 24, that
“when the reasonable reader encounters cautionary language, he tends to ‘discount
that which follows.”‘ 750 F.2d 970, 983 (quoting Bums v. McGraw-Hill
Broadcasting Co., 659 P.2d 1351, 1360 (Colo. 1983)). Unlike Justice Brennan,
however, the Oilman majority allows that such discounting can be undone by the
nature of the assertion being qualified: “When a statement is as ‘factually laden’ as
the accusation of a crime,.. .cautionary languages is by and large unavailing to dilute
the statement’s factual implications.” Oilman, 750 F.2d at 983.

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Milkovich committed perjury.56
Isolating the factual assertion a statement carries is but
the first step of the two step falsity analysis Milkovich
outlines.57 The court must then look to the nature of that
assertion to determine if it is “susceptible of being proven true
or false.”58 Where, as in Milkovich, a court can characterize
the assertion as charging a crime–here perjury–the answer is
preordained. Perjury, like all crimes, comes with definitional
criteria ready made by the state and familiar to the court.
Hence, Milkovich wasted little time concluding that perjury was
sufficiently disprovable.59 Unfortunately, the Court gives no
guidance beyond contrasting the “objectively verifiable event”
resting on a “core of objective evidence” at issue in this case,
with a merely “subjective assertion.”"6 The most significant
aspect of the Court’s analysis here, given this Article’s
concerns, is that the Court seems to think this second step is
inapplicable to an entire category of speech which it

56 Milkovich, 497 U.S. at 21. In contrast, Justice Brennan, in dissent, while
agreeing that there was no such thing as an “opinion privilege” per se, found the
author’s qualifiers clearly signaled the statements as mere conjecture. Id. at 29-30.
57 It is a step that can been seen as merely an elaboration on the common law
doctrine that requires the court to make, as a question of law, the threshold
determination of whether the statement at issue can reasonably be read to carry the
meaning which the plaintiff ascribes to it. (If so, then it is for the trier of fact to
determine if it does indeed carry that meaning and, if it finds it does, whether that
meaning is defamatory.)
58 Id. at 21. This requirement emanates simply from the plaintiff’s burden of
proving falsity. See Phila. Newspapers, Inc. v. Hepps, 475 U.S. 767, 777 (1986).
This is, in essence, the second Ollman factor: verifiability.
59 Milkovich, 497 U.S. at 21-22.
60 The court offers as an example of such a statement, “In my opinion Mayor
Jones shows his abysmal ignorance by accepting the teaching of Marx and Lenin.”
Id. at 2706. Presumably, the insufficiently disprovable assertion the Court is referring
to is not whether the Mayor accepts the teachings of Marx and Lenin, for which past,
recorded, public statements could counter, but whether this constitutes “abysmal
(4th edition, 1990), (unpublished “Supplemental Materials” at 27 n.2 (1992)).


[Vol. 3:1

characterizes as not stating "actual facts.'

B. Not "reasonably interpreted as stating actual facts"62

In Milkovich, the Court cites Greenbelt Cooperative
Publishing Assoc. v. Bresler,63 Old Dominion Branch No. 496,
National Assoc. of Letter Carriers v. Austin,64 and Hustler
Magazine Inc. v. Falwell65 as comprising a "line of cases''66
providing constitutional protection for a "type of speech'"67 that
cannot "reasonably [be] interpreted as stating actual facts.”,61
The Court goes on to identify such speech as “loose, figurative
or hyperbolic language which. . . negate[s] the impression that
the writer was seriously” asserting the literal meaning of her
statement.6′ At first blush, this seems sensible enough. A
plaintiff cannot satisfy his burden of proving falsity by
disproving an assertion which no reasonable reader took the
statement to be making in the first place.7″ There are,
however, two fundamental problems with this bit of doctrine:

61 Milkovich, 497 U.S. at 20 (quoting Falwell, 485 U.S. at 50) (emphasis
62 Id.
63 398 U.S. 6 (1970).
rA 418 U.S. 264 (1974).
65 485 U.S. 46 (1988).
66 Milkovich, 497 U.S. at 20.
67 Id. at 16 (“We have also recognized constitutional limits on the type of
speech which may be the subject of state defamation actions.”)
68 Id. at 20 (alteration in original) (quoting Falwell, 485 U.S. at 50).
69 Id. at 21 (finding that sports column’s assertion, “Anyone who attended the
[wrestling] meet … knows in his heart that Milkovich and Scott lied at the hearing
after each having given his solemn oath to tell the truth,” was not such a statement).
Id at 5.
70 This can be seen as merely the constitutionalization of the widely accepted
common law doctrine that it is a “question of law” whether the statement at issue can
be reasonably read to bear the meaning which the libel plaintiff alleges. If so, then
it goes to the jury to decide if the statement does indeed bear that meaning and, if so,
whether that meaning is defamatory.


1) it conflates non-literal and non-factual, thereby contradicting
the very logic of Milkovich itself; and 2) by its very breadth, it
fails to distinguish between two discrete types of “non-literal”
speech, hyperbole and fiction, the latter of which cannot be
protected by the First Amendment rationale the Court

1. Non-literal v. Non-factual: The Logic of Milkovich

Milkovich can be said to stand for the proposition that the
particular language used by an author will not blind the court to
implicit assertions of fact lurking within it. The author will be
liable for the meaning a reader can reasonably draw from the
work, where that meaning is of a nature susceptible to disproof.
Inexplicably, however, the Court appears quite willing to
so blind itself when that language is “rhetorical hyperbole.”‘”
Here the Court, having declared it unreasonable to take the
statement at issue literally, fails to subject what meaning it does
reasonably convey to the second analytical step–judging its
susceptibility to disproof.
In Bresler, the defendant had accurately reported that
citizens at a heated city council meeting had referred to the
plaintiffs position in a pending land negotiation as
“blackmail.”72 The Court found that, given the article’s full
portrayal of events, it was “impossible” for a reader to
understand the term “blackmail” as anything “more than
rhetorical hyperbole, a vigorous epithet used by those who
considered Bresler’s negotiating position extremely
unreasonable.”,73 The thrust of the opinion makes clear,
however, that the Court locates this meaning only to

71 Bressler, 398 U.S. at 13-14.
72 Id at 12-14. The plaintiff was seeking zoning variances as a quid pro quo
for agreeing to sell the city other tracts he owned.
73 Id. at 14.



demonstrate what “blackmail” does not connote: the commission
of a crime. This is indeed the point to which it keeps returning
and on which it finally concludes the discussion.74 By
contrast, the Court finds it unnecessary to reach the question of
whether or not “extremely unreasonable” negotiator or some
sharper variant, is itself either non-factual or non-defamatory.75
In Letter Carriers, the conflation of non-literal and non-
factual is clearer still. The defendant, a union publication, had
referred to plaintiffs as “scabs” and followed with Jack
London’s oft quoted definition of a scab as “a traitor to his
God, his country, his family and his class.”76 Citing Bresler,
the Court characterized the quote as “merely rhetorical
hyperbole, a lusty and imaginative expression of… contempt”
that no reader could possibly take as charging the criminal
offense of treason.77 The plaintiffs, however, did not simply
claim the statement literally charged them with being traitors,
but, in the alternative, that it could be more generally read to
characterize them as having “rotten principles” and lacking
“character.”,78 The Court, however, found it necessary only to
discredit the literal charge of a crime. It simply dismisses any
other connotations as expressing mere “opinion,” which it

74 Id. (“Indeed, the record is completely devoid of evidence that anyone in the
city of Greenbelt or anywhere else thought Bresler had been charged with a crime.”).
75 Id Though one might argue that the meaning is implicitly unsusceptible
disproof, Justice Brennan, making a different point, translates “blackmail” to have
meant Bresler was “manipulative and extremely unreasonable.” Milkovich, 497 U.S.
at 25 (Brennan, J., dissenting) (discussing Bressler). The term, in this context, might
just as reasonably be taken to imply Bresler was greedily taking advantage of the
76 Letter Carriers, 418 U.S. at 268.
77 Id. at 285-86.
78 Id. at 283. Indeed, the Court has since described the quote as asserting that
the plaintiffs’ actions were “reprehensible and destructive to the social fabric. … .”
Milkovich, 497 U.S. at 26 (Brennan, J., dissenting) (discussing Bressler). The
question then, per Milkovich’s analysis, should be whether this meaning is sufficiently
factual and susceptible to disproof.

[Vol. 3:1


declares privileged--employing the very reading of Justice
Powell's dictum in Gertz that Milkovich explicitly
In Falwell, the Court most clearly demonstrates its
treatment of "rhetorical hyperbole" as per se non-factual. Here,
it doesn't even bother to derive what defendants' statements do
reasonably connote. At issue was a Hustler magazine ad parody
which "quoted" Jerry Falwell describing how he lost his
virginity to his mother in an outhouse and has had intercourse
with her since."0 Without analyzing what meaning, if any, a
reader could reasonably draw from the parody, the Court simply
quotes the jury's finding that the parody could not "reasonably
be understood as describing actual facts about [respondent] or
actual events in which [he] participated.”‘” This, the Court
takes as dispositive of the question of falsity.
Given that Milkovich found it “destructive of the law of
libel if a writer could escape liability . . . simply by using”
qualifying phrases like “I think,”82 it is inexplicable that the
Court finds it any less “destructive” to grant immunity to
defamatory meaning when it is couched in rhetorical hyperbole.
Playing on Chief Justice Rehnquist’s example in Milkovich,”3
surely the statement “John Jones is the biggest liar in the
world,” just as clearly contains the assertion that “John Jones is

79 Letter Carriers 418 U.S. at 284 (quoting Gertz, 418 U.S. at 339-40). See
supra note 24 and accompanying text.
80 Falwell, 485 U.S. at 46.
81 Falwell, 485 U.S. at 57 (alteration in original) (quoting Appendix to Petition
for Certiorari at Cl).
82 Milkovich, 497 U.S. at 19 (quoting the “aptly stated” observation of Judge
Friendly in Cianci v. New Times Publishing Co., 639 F.2d 54, 64 (2d Cir. 1980).
See supra notes 24-25.
83 Milkovich, 497 U.S. at 26.



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a liar."84 Similarly, in Falwell, if the parody can be
reasonably read to assert that "Jerry Falwell is a hypocrite'"85
the Court should then ask whether this assertion is sufficiently
factual to be capable of being shown to be false.86 As one
commentator put it,

The concept of rhetorical hyperbole requires us to
recognize that even if traditions of satiric
exaggeration do not permit us to read the
assertions of the Hustler parody literally to say
that Falwell actually had intercourse with his
mother in an outhouse, these assertions can
nevertheless be understood to convey a different

84 As then Judge Scalia complained in his Ollman dissent,
[T]o say, as the concurrence [Judge Bork] does, that hyperbole
excuses not merely the exaggeration but the fact sought to be
vividly conveyed by the exaggeration is to mistake a freedom to
enliven discourse for a freedom to destroy reputation. The libel
that “Smith is an incompetent carpenter” is not converted into
harmless and nonactionable word-play by merely embellishing it
into the statement that “Smith is the worst carpenter this side of the
750 F.2d at 1036.
85 This is what respondent Falwell took the brief of the petitioner, Hustler, to
be asserting. Flynt himself, in a variation on this, contended that the parody was
intended to mean “that Falwell’s message is b.s. . . . [and] that his teachings are
nonsense.” Brief for Petitioners, Falwell, at 20.
86 Given that the moral outlines of Falwell’s teachings are fairly clear, the
implied meaning of “hypocrite” in this context might well carry a sufficiently factual
connotation. In a context offering only a vague referent, it might not. See, e.g.,
Hotchner v. Castillo-Puche, 551 F.2d 910 (2d Cir.), cert. denied, 434 U.S. 834 (1977)
(“hypocrite” too vague to be actionable when referring to a generalized personality
trait). An illustration of the importance of having a referent to establish the
concreteness of meaning can be seen by contrasting the vividness of applying the
term “incompetent” to a carpenter (see supra note 83) with the same term as applied
to a profession with less objectively testable skills (e.g. a judge–see Rinaldi v. Holt,
Rinehart & Winston, Inc., 42 N.Y.2d 369, cert. denied, 434 U.S. 969 (1977) (finding
the term “incompetent” too vague to be actionable as applied to a judge).


message. …. [T]he precise question would then
be whether this message is [actionable].”7

But can it really be that Bresler, Letter Carriers, and
Falwell stand for the proposition that “rhetorical hyperbole” is
immune from liability whether or not it can be reasonably read
to implicitly convey an assertion of fact?”8 This misreading
and its anomalous result stems from the gloss Milkovich puts on
these three cases in asserting they define a “line.” Doing so
serves the Court in two ways. It recasts Bresler and Letter
Carriers, which would otherwise have to be repudiated for

87 Robert C. Post, The Constitutional Concept of Public Discourse: Outrageous
Opinion, Democratic Deliberation, and Hustler Magazine v. Faiwell, 103 HARV. L.
REv. 603, 652 (1990). Such was the approach in the pre-Hustler, appellate court
decision of Keller v. Miami Herald Publishing Co., 778 F.2d 711 (1 1th Cir. 1985).
In Keller, defendant’s cartoon depicted gangsters, standing within the crumbling walls
of the nursing home which plaintiff owned, holding bags full of money and talking
of how how their “Boss” can still make money by reopening the place as a haunted
house. The court did not find it dispositive that the cartoon could not be read as a
literal depiction of physical squalor or illegal activity. Rather, having found its only
reasonable meaning to be that plaintiffs profiting on the elderly was objectionable,
it went on to ask, first, whether that meaning was capable of being defamatory, id.
at 716, and then, whether it was susceptible to disproof. Id. at 717 (concluding that
no, “[t]he statement was not capable of verification; ordinarily, an individual’s
morality or immorality is not subject to empirical proof’).
88 See, for example, Hannon v. Timberline Publishing, Inc., 1991 WL 237874
*2 (Colo. Dist. Ct. 1991) (protecting defamatory “fictional” story within an otherwise
factual news article).
Contrary to plaintiff’s position, this type of speech is protected even
if it is apparently based on undisclosedfacts …. In Falwell, the
plaintiff was portrayed as having sex with his mother in an
outhouse. This appears ridiculous on its face but there could be an
implied assertion that the author knows of sexual improprieties by
the plaintiff. However, this parody was held to be protected
Id. at *2 (emphasis added). See also Flip Side, Inc. v. Chicago Tribune Co., 206 Ill.
App. 3d 641, 654, (1990) (citing Falwell and Milkovich in finding comic strip
portrayal precluded finding factual falsity).



resting on the very “opinion privilege” Milkovich discredits.89
It also allows the Court to avoid having to make literary
judgments as to what genres certain speech belongs and what
“falsity” means in those genres. To this end, it inaccurately
treats the Hustler parody as “rhetorical hyperbole” when it is, in
fact, no such thing.

2. Conflating Hyperbole with Fiction

Hyperbole is “overstatement” and, by definition, contains
within it a kernel assertion–that which is being overstated–
which can be put plainly. It is this core assertion that the Court
uncovered and discarded without analysis in Bresler.90
Tellingly, the Falwell Court fails to unveil any such core
meaning. Contrary to its grouping by Milkovich, Falwell cites
neither Bresler nor Letter Carriers as support or authority.
Instead, it simply cites the jury finding that the parody is not
“reasonably interpreted as stating actual facts.”9′ Milkovich
adopts this definition as expressing what has been a
constitutional question of law for the Court, since Bresler.92
Oddly, however, the Falwell Court makes no fmding on this
question; the definition is merely a verbatim lift from the jury
finding.93 The Court cites the jury finding and then, as if it

89 See supra note 51 and accompanying text.
90 See supra notes 71-74 and accompanying text.
91 Falwell, 485 U.S. at 57 (White, J., concurring).
92 Milkovich, 497 U.S. at 7 (“[In Bresler we] recognized constitutional limits
on the type of speech which may be the subject of state defamation actions.”) See
Bresler, 398 U.S. at 13 (“[WMe hold that imposition of liability on such a basis was
constitutionally impermissible--that as a matter of constitutional law, the word
'blackmail' in these circumstances was not slander when spoken, and not libel when
reported .... ."); see also Mr. Chow of New York, 759 F.2d at 224; Oilman, 750
F.2d at 1033.
93 This jury finding was in response to the first interrogatory of the Special
Verdict Form. Joint Appendix on Appeal at 540 (No. 86-1278).

[Vol. 3:1



were a question of fact, and not, as it actually is, a question of
law, concludes by saying it must defer to the jury finding “in
accordance with our custom.”94 This slight of hand allows the
Court to avoid defining what kernel assertion the parody can be
reasonably read to be making. Such a desire is understandable,
because there is no kernel assertion. This is what distinguishes
hyperbole from fiction.95
Hyperbole is the use of exaggeration to amplify a
descriptive truth claim.96 When hyperbole moves from
description to demonstration, it becomes “caricature.”97 At the
core of both lie a claim of descriptive truth.98 Mislabeling the
Hustler piece “caricature,”99 the Court defines the genre as

94 Falwell, 485 U.S. at 57 (White, J., concurring). The Court tries to finesse
this by referring to the Court of Appeals’ interpretation of the jury finding. The
Court of Appeals, however, made no independent finding on this point, but merely
deferred to the jury finding.
95 “Fiction” here is meant not in the narrow sense of the novel, but as that
which can be distinguished from certain discrete types of “non-fiction” along a few,
limited axes germane to libel law. This Article in no way attempts a comprehensive
or stable definition of “fiction.” Such definitions offered by law review articles on
libel have left this author unsatisfied and duly warned. See, e.g., Daniel Smirlock,
Note: “Clear and Convincing” Libel: Fiction and the Law of Defamation, 92 YALE
L. J. 520, 535-36 (1983) (defining fiction as synecdoche–a “slice of life … that
reflects on reality generally by presenting one aspect of reality.”); Isidore Silver, Libel
the ‘Higher Truths’ of Art, and the First Amendment, 126 U. PA. L. REV. 1065, 1069
(fiction as author’s subjective view, author’s higher truth).
96 Often, this “exaggeration” also communicates the author’s personal
preference. The verbal excess at issue in Letter Carriers, see text accompanying
notes 75-78, for instance, is reasonably read as both “Your actions are contemptible,”
and “I hold you in contempt.” The former is unactionable for being too imprecise
for disproof; the latter is merely a preference expression.
97 It is hyperbole to describe an actor in a PBS historical drama as having less
life than the dead figure he portrays. It is caricature to demonstrate this by reenacting
a scene by replacing him with a George Segal sculpture.
98 In the previous note’s example, the descriptive truth claim would be “His
acting was lifeless.”
99 Falwell, 485 U.S. at 55.


“exaggerating features or mannerisms for satirical effect.”’00
The political cartoons cited by the Court illustrate the difference
between caricature and the Hustler piece.’0′ At the core of
the cartoonist’s exaggeration of Lincoln’s height to absurd
proportion102 lies the descriptive truth claim “Lincoln is very
tall.” At the core of one of Thomas Nast’s typical renderings
of “Boss” Tweed and the Tweed Ring, one depicting them as
vultures with the bones of New York taxpayers littering their
roost, lies the truth claim that they are in fact rapacious. In a
more familiar example not cited by the Court, Gary Trudeau’s
rendering of George Bush as forever invisible, contains the
descriptive claim that Bush lacks substance.
By contrast, what quality of Falwell’s can the Hustler
piece be said to be exaggerating? What reasonable inference
lies at its core? Is it reasonable to read it as asserting, perhaps,
that Falwell had intercourse with his mother, but only once and
not in an outhouse? Or, more modestly, that he has fondled
her?103 Or, more modestly still, that he is racked with
Freudian fantasies?
All of these are unsatisfactory descriptions. So are the

100 Id. at 53 (quoting Webster’s New Unabridged Twentieth Century Dictionary
of the English Language 275 (2d ed. 1979)).
101 This is the distinction the Court senses, but can’t quite put its finger on when
it remarks:
There is no doubt that the caricature . . . in Hustler is at best a
distant cousin of the political cartoons described above, and a rather
poor relation at that. If it were possible by laying down a
principled standard to separate the one from the other, public
discourse would probably suffer little or no harm. But we doubt
that there is any such standard, and we are quite sure that the
pejorative “outrageous” does not supply one.
Id. at 55.
102 Id. at 54.
103 See Hannon v. Timberline Publishing, Inc., 1991 WL 237874 *2 (Colo. Dist.
Ct. 1991) (citing Falwell as having been granted immunity despite the Hustler piece
being interpretable as asserting “sexual improprieties”).

[Vol. 3:1


ones that Flynt himself has offered, because the piece contains
no underlying truth claim.'04 This is not to say it is
gratuitous. Rather, the piece employs a literary technique
distinct from hyperbole and caricature. Whatever comic effect
Hustler achieves, it achieves not through exaggeration, but
through incongruity. Such would be operating in a portrayal of
Lincoln as a dwarf, "Boss" Tweed as an ascetic, or George
Bush as standing on principle.'05 The humor of comic
incongruity is relatively witless and quickly dissipates, as the
Hustler piece demonstrates. But its turning reality on its head
is the key to its literary usefulness. In short, it marks the
literature of disorientation known as "satiric fantasy." This is
where we can locate the Hustler piece, and the fiction at issue
in the line of cases in which Falwell truly belongs.'06
The absence of a moral point of view, like the one so
palpable in Nast's cartoon, is fundamental to satiric fantasy.
While other forms of satire may evince a moral standard,107
"satiric fantasy" creates and revels in a sensual world of riotous
chaos. It extinguishes all social conventions and distinctions.
In identifying how this genre functions, the critic Northrope
Frye observed that the preservation of social conventions

104 The Hustler piece clearly invites the reader to enjoy an imagined picture of
Falwell as a grotesque hypocrite. But while this invitation may be most quickly
accepted by readers suspecting Falwell of actual hypocrisy, the piece cannot be fairly
read to assert such an actuality. Of course, the grotesque quality of the piece might
be fairly read to contain a clear assertion of the author's contempt for the subject; see
supra note 27 and accompanying text regarding statements of personal preference.
105 This final incongruity is found in the unintentionally comic effect of much
political advertising.
106 While the brevity of the Hustler piece makes it a rather truncated example
of the genre, classifying it as such is consistent with this Article's use of the term
"fiction" as embracing both narrative and non-narrative works.
107 "The satiric commonly takes a high moral line." Northrope Frye, Anatomy
of Criticism: Four Essays 235 (1957).



… demands that the dignity of some men and the
beauty of some women should be thought of apart
from excretion, copulation, and similar
embarrassments. [This genre's] [c]onstant
reference to these latter [embarrassments] brings
us down to a bodily democracy …. 108

Like the works of Rabelais and Petronius’s Sytiricon, Flynt’s
magazine strips humanity of its social mores to reveal a riot of
sensual appetites.1°9 By including in its portrayals those who,
like Falwell, most strongly symbolize those mores, it can
achieve its effect most economically.”0 This is also true in
the financial sense–drawings like the Falwell satire having
lower production costs than the magazine’s more common
method of: photographing the common man and woman, forever
nude and humping.
“Satirical fantasy’s” only necessary relation to “actual
facts” is that it depends upon and assumes the reader’s
awareness of the common perception of descriptive truth. In
this case, Flynt assumes the reader is familiar with Falwell’s
preachings and personal moral posture–his image as physically
and morally well-scrubbed–a Disney update of Father Caughlin.

108 Id. at 234 (labeling this as the “third phase of satire, the satire of the high
norm). For the protective First Amendment rationale that might value speech
portraying this “bodily democracy,” see infra notes 160-163 and accompanying text.
109 The roots of satiric fantasy are found in the Greek satyr play and the
bacchanal. See OSCAR G. BROCKETr, HISTORY OF THE THEATRE 16-18 (Allyn &
Bacon 1968).
110 See also Hustler’s similar portrayal of Andrea Dworkin which the court
explicitly labels a “satiric fantasy,” Andrea Dworkin v. Hustler Magazine, 668 F.
Supp. 1408, 1416 (C.D. Cal. 1987) aff’d 817 F.2d 1188 (9th Cir. 1989), cert. denied,
493 U.S. 812 (1989), and Penthouse Magazine’s satiric fantasy, turning the Miss
America Pageant’s celebration of wholesomeness into a bacchanal, Pring v. Penthouse
Int’l Ltd., 695 F.2d 438 (10th Cir. 1982), cert. denied, 462 U.S. 1132 (1983). Both
cases are discussed below, beginning at note 117.

[Vol. 3:1


But like fiction generally, it does not itself make truth claims.
While it is clearly on this score that fiction should find
its greatest claim to immunity from libel, it is, ironically, also
its greatest vulnerability to it. That vulnerability comes on two
flanks. First, the absence of descriptive truth can be equated
with "intentional falsity," thereby making all authors of fiction
guilty, per se, of both "falsity" and "actual malice." Second, it
makes rationalizing First Amendment protection more elusive.
The Court's analysis in Falwell and Milkovich can be seen as
exposing the limits of constitutional protection that the Court is
ready to afford fiction on both of these fronts. This is best
demonstrated by locating the line of cases into which Falwell
more properly falls.


Falwell does not grant constitutional immunity from libel
to self-labeled 'fictional' works. Just as Milkovich ignored all
cues exterior to the text itself,"' the Court here gives no
weight to Hustler's disclaimer at the bottom of the page ("ad
parody--not to be taken seriously") or to its listing the piece in
the table of contents as "Fiction: Ad and Personality Parody."
Rather, Falwell stands for the proposition that you can portray
a public plaintiff as engaging in defamatory acts so long as the
acts themselves or the manner of portrayal makes them clearly
unbelievable. Its approach constitutionalizes the Tenth Circuit's
analysis in Pring v. Penthouse."l2
In Pring, the court reversed a twenty-six million dollar
jury verdict against Penthouse Magazine for a satiric fantasy in
which a recent Miss Wyoming could be identified. The story

II See supra notes 48-56 and accompanying text.
112 695 F.2d at 438.



involved a similarly baton twirling Miss Wyoming who
performs fellatio on her baton, and then upon her coach, causing
all to levitate. She performs a final fellatio/levitation on the
Miss America contest stage, bringing the pageant to a halt and
the sight of her coach, lifting off the stage, to a national
television audience. “13
Citing its description of something “physically impossible
in an impossible setting,” the appellate court found the story
was “obviously a complete fantasy.”"’4 The court made its
reasoning clear:

The test is not whether the story is or is not
characterized as “fiction,” “humor,” or anything
else in the publication, but whether the charged
portions in context could be reasonably understood
as describing actual facts about the plaintiff or
actual events in which she participated.15

In Pring, the approach of Falwell and Milkovich is made
explicit. Two principles shape the contour of the protection this
approach offers.
First, not only will the disclaimer “fiction” not grant the
author license to defame, the court will refuse to give it any
weight at all in assessing the reasonable reader’s experience of
the work. The burden must be carried by the writing itself. As
Milkovich put it, either the “language” or “general tenor” of the
work must “negate the impression that the writer was seriously
maintaining petitioner committed” the acts depicted.”16
Second, just as Falwell, as echoed more explicitly by
Milkovich, finds the Hustler piece devoid of any believable

113 Id.
114 Id. at 443.
“5 Id. at 442.
116 Milkovich, 497 U.S. at 21.

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factual assertion, the Pring majority refuses to join its dissent's
disaggregation of the work. "Levitation," the dissent parses, is
fiction, but "[f]ellatio is not.”‘”17 As the quoted passage above
makes clear, the majority requires that the “charged portions” be
read in “context.”"’8 Milkovich affirms this approach, finding
that even where isolated statements are written in language
which fails to negate serious factual inference, that inference
can be negated by the work’s “general tenor.”"’9
If we are willing, then, to narrowly define “fiction,” as
that which by verbal style (“language”) and/or content (“general
tenor”) defeats all factual inference,”2′ we can blithly conclude
that “fiction” will not be equated with the “falsity” Hepps
constitutionally requires for libel.’2 Its intentional,
descriptive “non-truth” will be distinguished from “actual
malice.” This was the rational with which the Southern District
of New York court employed the term “fiction” in Dworkin v.
Hustler Magazine.122 In what the court denoted a “satiric
fantasy,” 12′ Hustler had portrayed the feminist Andrea
Dworkin throwing aside an anti-pornography picketing placard
to join in a violent sexual assault and orgy on the public

17 Pring, 695 F.2d at 443 (Breitenstein, J, dissenting).
118 Id. at 442.
19 497 U.S. at 21.
120 Such a definition converts the absence of “making truth claims,” which this
Article employed as sufficient to identify the Falwell piece as fiction, to a necessary
condition. In short, it constructs a limiting principle. To use the terms fiction and
fact less dichotomously, the proposition would be phrased as whether a work is
sufficiently fictional to render inferences of fact unreasonable.
121 Phila. Newspapers, Inc. v. Hepps, 475 U.S. 767, 777 (1986). See supra note
19 and accompanying text. To use the terms fiction and fact less dichotomously, the
question could be phrased: “What will make the work ‘insufficiently fictional.”‘
Avoiding the terms entirely, the distinction is most clearly drawn by asking, as this
Article has attempted, whether the work can be read to be making descriptive truth
122 668 F. Supp. at 1408.
123 Id. at 1416.



sidewalk. The court found that while the portrayal was, of
course, “untrue,” it was only so “in the sense that it was
fictional.”’124 This, the court held, precluded Dworkin from
showing falsity or actual malice and granted Hustler summary
judgment. 125
The scope of protection this formulation of “falsity”
offers, however, is wildly malleable. It is dependent on the
fundamental question Milkovich and Hustler avoided: What
elements of style or content can an author rely on to negate
factual inference? The only textual clue is Milkovich’s cryptic
reference to “loose, figurative, or hyperbolic” language.’26
The Falwell piece, however, is clearly not an example of
figurative language. Rather, its language is declarative and
concrete–not at all figurative in the literary sense.127 Similarly,
the language in Pring and Dworkin is declarative and not
figurative. What immunizes all three is not their prose, but,
rather, that the events they describe are so incongruous as to be
Must the “general tenor” of a work rise to this level of

124 Id, at 1419, (citing Guglielmi v. Spelling Goldberg Prod., 25 Cal. 3d 860,
871 (1979)). See also Marc A. Franklin, Fiction, Libel, and the First Amendment, 51
BROOK. L. REv. 269, 273 (1985):
Language that does not purport to be reportorial is not
automatically to be deprecated as “false.” Language may properly
be called false, and misleading, if it induces reasonable readers to
believe that it is true when in fact it is not true. The essence of the
matter, however, is misrepresentation, not falsity.”
The term “misrepresentation” here injects an added assumption, however, that “fault”
can automatically be attributed to the writer. Whether or not a reader’s reasonable
inference of factual portrayal satisfies, per se, the fault requirement of Gertz
(negligence) or “actual malice” (intentional or reckless disregard), is a severable
125 668 F. Supp. at 1418, 1419.
126 497 U.S. at 21.
127 Hustler’s claim that the piece amounted to no more than assaulting Falwell
with the figurative epithet “motherfucker,” even if persuasive, does nothing to recast
the prose style actually employed. Brief for Petitioners, Falwell (No. 86-1278).

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fantasy in order to qualify for constitutional protection? The
Supreme Court has failed to provide any clues as to what more
subtle literary forms it might credit. The Court’s eagerness to
avoid playing the role of literary critic and determining
appropriate genre classifications is understandable.’28 But the
present formulation offers so little guidance to lower courts that
they continue, unsurprisingly, to arrive at wildly inconsistent
results. 129
The unpredictability sown here is inevitably chilling.’30
As the Court itself warned, clarity “in the area of free speech [is
particularly essential] for precisely the same reason that the
actual malice standard is itself necessary. Uncertainty as to the
scope of the constitutional protection can only dissuade
protected speech–the more elusive the standard, the less
protection it affords.””
The uncertainty bred of the broad discretion left to lower

128 For an explicit renouncing of this role, see Mitchell v. Globe Int’l
Publishing, 773 F. Supp. 1235, 1239 (W.D. Ark. 1991) (“Nor do we believe the court
should act as a literary critic and determine to what genre a particular publication
129 Cf Welch v. Penguin Books USA, Inc., 1991 N.Y. Misc. LEXIS 225, 9-10
(Sup. Ct. NY, 1991) (granting summary judgment to publisher of naturalistic novel,
as plaintiff unable to “overcome the presumption of invention” by showing that a
reader would be “totally convinced that the book in all its aspects [relating to the
plaintiff) is not fiction at all") (emphasis added) with Ford v. Rowland, 562 So. 2d
731, 734-35 (Fla. Dist. Ct. App. 1990) (vacating summary judgment for poem which,
despite being chiefly "fiction and fantasy" (e.g., describing plaintiff as a witch on a
broomstick riding through the night), contained one description, "hooker," susceptible
to factual inference: "If a publication reasonably asserts a factual charge which is
defamatory, even in a humorous or satirical vein, we are unaware of any first
amendment protection") (distinguishing Falwell and Dworkin).
130 See Smolla, Let the Author Beware: The Rejuvenation of the American Law
of Libel, 132 U. PA. L. REV. 1, 1-5 (1983) (arguing that the level of self-censorship
is directly proportional to the level of uncertainty engendered by the applicable legal
1 Harte-Hanks Communications, Inc. v. Connaughton, 491 U.S. 657, 686


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courts by the Court's "falsity" formulation is compounded by
the lack of guidance offered on the question of "fault." With a
work of fiction employing merely a superficial degree of
realism, a court still could, as it did in Bindrim v. Mitchell,
equate any conscious deviation from known fact, be it a work
of fiction or non-fiction, with "actual malice."'32 Nothing in
Milkovich or Falwell prevents a court from employing the term
"fiction" as narrowly defined above133 and declaring such a
work merely an "alleged novel" that is simply "not fiction."
These are, in fact, the terms the Ninth Circuit recently used to
approvingly characterize the holding in Bindrim.134 This
literal application of "actual malice" to fiction has been roundly
criticized by commentators'35 and eloquently disapproved of
by a number of courts,136 but proffered reformulations offer

132 92 Cal. App. 3d 61, 71-73, cert. denied, 444 U.S. 984 (1979). In Bindrim,
the defendant author had depicted a nude encounter group in her novel Touching after
attending one with the plaintiff/psychologist. The court concluded that, despite their
being no similarity between the psychologist in her novel and the plaintiff, the
author's "reckless disregard for the truth was apparent from her knowledge of the
truth of what transpired at the encounter and the literary portrayals of that encounter."
Id at 72-73.
133 See supra note 120 and accompanying text.
134 Masson v. New Yorker Magazine, Inc., 881 F.2d 1452, 1455 (1990) rev'd
on other grounds, 501 U.S. 496 (1991).
135 See, e.g., R. Bruce Rich & Livia D. Brilliant, Defamation-in-Fiction: The
Limited Viability of Alternative Causes of Action, 52 BROOK. L. REV. 1, 6 (1986)
(literal application of "actual malice" as formulated for non-fiction to fiction produces
the "unintended and perverse result" of depriving all fiction of a fault defense).
136 See, e.g., Mitchell v. Globe International, 773 F. Supp. 1235, 1238 (W.D.
Ark. 1991); Miss America Pageant, Inc. v. Penthouse Int'l, Ltd. (Pring II), 524 F.
Supp. 1280, 1285 (D. N.J. 1981); Hoppe v. The Hearst Corporation, 53 Wash. App.
668 (1989).
In a passage often quoted by courts declining to find "actual malice" in works of
fiction, the Supreme Court of California observed:
[I]n defamation cases, the concern is with defamatory lies
masquerading as truth. In contrast, the author who denotes his
work as fiction proclaims his literary license and indifference to the
“the facts.” There is no pretense. All fiction, by definition,



little added protection.’37 Any work of purported fiction,
then, that satisfies the Falwell-Milkovich falsity formulation, is
left unprotected by the “fault” requirement Sullivan and Gertz
found essential to “wide open and robust debate.’
One obvious solution to all this chilling uncertainty is the
one Falwell and Milkovich rejected: take the author’s disclaimer
at its word. If the work is labeled “fiction,” conclude it
unreasonable to read it as fact. The Court’s unwillingness to do
so likely stems, in part, from a fear of writers employing the
label on works of thinly disguised character assassination.’39
There, the disclaimer might be understood by the reader as a
mere wink, indicating the absence not of factual truth, but of
legal resources. Even accepting for the sake of argument,
however, that such an “understanding” is likely or common

eschews an obligation to be faithful to historical truth. Every
fiction writer knows his creation is in some sense “false.” That is
the nature of the art. Therefore, when fiction is the medium…
it is meaningless to charge that the author “knew” his work was
Guglielmi v. Spelling-Goldberg Productions, 25 Cal. 3d 860, 871 (1979) (en banc)
(Bird, J., concurring) (rejecting contention that fictionalization in film constituted
“actual malice”).
137 One such reformulation adopted in light of Falwell and Milkovich, asks
whether the defendant has recklessly failed to anticipate that readers could construe
the publicized matter as conveying actual facts. See Peoples Bank & Trust Co. of
Mountain Home v. Globe International, Inc., 786 F. Supp. 791 (W.D. Ark. 1992);
Hoppe v. The Hearst Corporation, 53 Wash. App. 668 (1989) (citing SMOLLA, LAW
OF DEFAMATION, Sec. 4.09[7][c] (1988)). Any author of a work satisfying the
Falwell-Milkovich falsity test, who either consciously models a character on an actual
person or explicitly employs a known figure, will certainly satisfy this formulation
of “actual malice” as well.
138 See supra note 11 and accompanying text.
139 See, e.g., Corrigan v. Bobbs-Merril Co., 228 N.Y. 58 (1920) (corrupt judge
in novel sits in same courtroom as plaintiff-judge and the character’s name differs by
only two letters).


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enough to warrant consideration,"4' it fails to justify the
Court's giving the disclaimer no weight at all. The label
"fiction" still proclaims that the author eschews any obligation
to descriptive truth.'41 An ineluctable degree of doubt must
therefore accompany the reading of even the most "believable"
details. "Facts" inferred from fiction are, thereby, qualitatively
attenuated compared to facts explicitly asserted in non-
fiction.142 The greater the specificity of those details,
moreover, the less reasonable it becomes to read them as
effecting anything more than a hypothetical reconstruction.143
The Court has recently acknowledged the effect a
disclaimer can have on the reasonableness of factual inference.
In Masson v. New Yorker Magazine, Inc., the Court noted that,
in contrast to their use in journalism, quotation marks found in
works acknowledged as "historical fiction . . . might indicate
that the quotation should not be interpreted as the actual

140 As a predictive concern, Richard Posner's forecast that if we grant immunity
to works labeled fiction, "[j]oumalists would become novelists and short story
writers,” is itself probably best read as alarmist fiction. RdCHARD A. POSNER, LAW
141 See Guglielmi, 25 Cal.3d at 871 (as quoted at supra note 136).
142 As the “fictional context negates, to a large extent, any possibly defamatory
meaning, there is a reduced potential for damage to reputation occasioned by libelous
fiction as opposed to libelous nonfiction.” Martin Garbus & Richard Kurnit, Libel
Claims Based on Fiction Should be Lightly Dismissed, 51 BROOK. L. REv. 401, 403
(1985) (footnote omitted). See also, Diane Leenheer Zimmerman, Real People in
Fiction: Cautionary Words about Troublesome Old Torts Poured into New Jugs, 51
BROOK. L. REV. 355, 362 (asserting that even in works blurring the line between
fiction and non-fiction, “the denomination of the work as fiction serves to imbue the
reasonable reader with a substantial sense of skepticism about taking the work too
143 Typical of such details are renderings of what the plaintiff privately thought
or said. As Liz Taylor complained, unwittingly undercutting her own argument, of
a planned television docudrama on her life, “The only way this can be accurate is if,
unbeknownst to me, someone’s been hiding under my bed these past 25 years.”
Schwartz, Docudrama Liability, 4 L.A. LAWYER 111 (1985).



statements of the speaker to whom they are attributed.””44
“Writers often use quotation marks, yet no reasonable reader
would assume that such punctuation automatically implies the
truth of the quoted material.”’45 The court, thereby,
distinguishes fiction as a context in which certain intentional
non-truths should not be equated with falsity or “actual malice.”
While this bit of dictum obviously carries limited precedential
weight, it casts doubt generally on the easy equation of a “fact”
inferred from a work of fiction, and one explicitly asserted in
a work of non-fiction. No lesser a light than Judge Learned
Hand recognized the importance, in the First Amendment
context, of distinguishing between words which directly instruct
from those that merely have a “reasonable tendency” to being
similarly understood.’46 In recognition of the distinction, the
Court might at least afford all works disclaimed as fiction a

144 501 U.S. 496 (1991) (addressing the concerns raised in the Amici Curiae
Brief of Home Box Office, Inc. (No. 89-1799), in support of Respondents (The New
Yorker Magazine)). The central holding in Masson, limited to purported non-fiction,
is that “deliberate alteration of the words uttered by a plaintiff does not equate with
knowledge of falsity for purposes of [actual malice] unless the alteration results in a
material change in the meaning conveyed by the statement.” Id. at 517.
145 Id. at 512 (quoting Baker v. Los Angeles Examiner, 42 Cal. 3d 254, 263
(1986) (en banc)).
146 See Masses Publishing Co. v. Patten, 244 Fed. 535 (S.D.N.Y.. 1917)
(distinguishing expression that merely permits the inference of a message, from the
explicit and direct communication of that same message). While recognizing that the
distinction may be genuinely only one of degree, Judge Hand drew the line of first
amendment protection between the two. To do otherwise, he wrote, is to “give to
Tomdickandharry, D.J., so much latitude” as to allow him to mistake “his own fears”
for cognizable harm. Letter from Learned Hand to Zechariah Chafee, Jr. (Jan. 2,
1921) quoted in Gunther, Learned Hand and the Origins of Modern First Amendment
Doctrine: Some Fragments of History, 27 STAN. L. REv. 719, 770 (1975). While
employing Judge Hand’s distinction here brings it quite a distance from the
“incitement” context in which it was enunciated, the broad point here is that First
Amendment doctrine that leaves great discretion to judge and jury risks protecting
speech inadequately. This is borne out in the wildly inconsistent application of the
Falwell-Milkovich falsity formulation by lower courts, as allowed by the broad
discretion that formulation affords.


presumption of non-fact that a libel plaintiff would have to
overcome.’47 The Milkovich-Falwell falsity formulation
presently put the burden on the language or general tenor to
negate reading it as literal truth. Shifting that burden, a court
would ask if the plaintiff has overcome the presumption of
invention afforded fiction.
It is unlikely, however, that even this very modest
proposal would be countenanced by the current Supreme Court.
The Falwell-Milkovich falsity formulation likely represents the
limit of protection it is prepared to grant fiction, in light of the
Court’s having come to rely, more and more exclusively, upon
a single First Amendment rationale: a narrow reading of what
speech is important to “self-governance.”’148 The First
Amendment jurisprudence of the Rehnquist Court maps an
increasingly precipitous drop-off in the value ascribed to speech
as it wanders from making substantive contributions to political
debate. The Falwell opinion itself amply demonstrates this.
In Falwell, the Court finds the type of speech typified by
the Hustler piece to have no, or at most, de minimis value. It
contrasts it to the value of traditional political cartoons, which,
the Court notes, have contributed “considerably” to the “robust
political debate encouraged by the First Amendment.”149 The

147 See Welch v. Penguin Books USA, Inc., 1991 N.Y. Misc. LEXIS 225, 9-10
(N.Y. Sup. Ct.).
149 The rationale is most often associated with Alexander Meiklejohn’s
formulation of it. See, e.g., Meiklejohn, The First Amendment is an Absolute, 1961
SuP. CT. REv. 245, 255 (stating that the First Amendment does not guarantee a
“freedom to speak,” but rather it “protects the freedom of those activities of thought
and communication by which we ‘govern.”‘). Unlike the current Court, however,
Meiklejohn fully included literature and the arts here because, like more explicitly
political speech, they are “forms of thought and expression … from which the voter
derives … the capacity for sane and objective judgment.” Id. at 257.
149 Falwell, 485 U.S. at 51. It is worth noting Rehnquist’s injection of
“political” into Justice Brennan’s Sullivan maxim, and the narrowing it effects.
“From the viewpoint of history it is clear that our political discourse would have been
considerably poorer without [those cartoons].” Id. at 55. See supra note 102 and

[Vol. 3:1


Court continues, "[i]f it were possible by laying down a
principled standard to separate the one from the other, public
discourse would probably suffer little or no harm.”’15 This
confident eye for discriminating what does and does not
contribute to public discourse contrasts sharply with more
inclusive and generous pronouncements from past Courts more
skeptical of their ability to place speech on a divined hierarchy
of First Amendment value. Even in the early, nascent years of
First Amendment jurisprudence the Court cautioned, “[t]he line
between the informing and the entertaining is too elusive for the
protection of the basic right. Everyone is familiar with
instances of propaganda through fiction. What is one man’s
amusement, teaches another doctrine.””
The current Court puts a steep premium on both a
rhetorical manner of expression, and the content of that
expression’s constituting a substantive contribution to social,
especially political, debate. When the speech in question dares
to embody neither, as in Barnes v. Glen Theatre, Inc., it is only
“marginally” within the “outer perimeters of the First
Amendment.”’52 The diminution in constitutional protection

accompanying text.
151 Winters v. New York, 333 U.S. 507, 510 (1948).
152 501 U.S. 560, 565 (1991) (holding constitutional the application of public
indecency statute to enjoin nude bar-room dancing) (emphasis added). The devaluing
of non-rhetorical expression can be seen by contrasting the Court’s holding here with
that in FCC v. Pacifica Foundation, 483 U.S. 726 (1978). In Barnes, the Court held
that banning a few terms from a dancer’s anatomical lexicon by requiring a G-string
and pasties is a de minimis infringement merely making the “message slightly less
graphic.” Barnes, 501 U.S. at 571. By contrast, the Pacifica Court declared that the
“indecent” verbal equivalent of these anatomical terms–”cunt” and “tits”–were
constitutionally regulatable only when communicated by media intrusive into the
home. Pacifica, 483 U.S. at 729. More generally, contrast Barnes with the Burger
Court holding in Schad v. Mt. Ephraim, 452 U.S. 61 (1981) (striking down as
unconstitutional a zoning ordinance effecting a flat ban on nude dancing and all live
entertainment). In Schad, the Court writes, “[e]ntertainment, as well as political and



out on that “perimeter” is profound. Here, “morality” is a
sufficiently substantial state interest.’53 In Falwell, by
contrast, where the speech cannot be “principly distinguished”
from core, political commentary, the state’s interest in
“morality”’154 is declared constitutionally flawed for the
“inherent subjectiveness about it which would allow a jury to
impose liability on the basis of the jurors’ tastes or views.’”"55
The worry about majoritarian impositions of taste 15 seems, for
this Court, confined to speech bearing at least a superficial
similarity to political commentary.”‘
While one can descriptively maintain that “political”
speech is, “by wide agreement, most clearly within the First
Amendment; ” it certainly does not necessarily follow that
the Court should blind itself to the insidious effects of
countenancing certain government interests whenever the speech
sought to be regulated does not make as obvious a contribution
to public debate. In doing so, the Court seems to have
abandoned all alternative protective rationales other than a

ideological speech, is protected. [Nor] may an entertainment program be prohibited
solely because it displays the nude human figure.” Id. at 70.
153 Barnes, 501 U.S. at 569.
154 The second prong of the Virginia law under which Falwell’s suit was
brought, turns on the speech’s offending “generally accepted standards of decency or
morality.” Falwell, 485 U.S. at 50 n.3.
155 Id. at 55.
156 See Steven Shiffrin, Defamatory Non-Media Speech and First Amendment
Methodology, 25 UCLA L. REV. 915, 951 (1978) (“[Ihf offensiveness were the test,
majority rule would replace the first amendment.").
15 Falwell's protection of the Hustler piece is testimony to the talismanic power
even superficially political speech has in this Court's jurisprudence. Were it not for
the Court's additional prudity in the face of graphic sexuality, one might well claim
that constitutional protection would have been found in Barnes if, in lieu of the
pasties and G-strings which the Court suggested, the dancers had simply donned Jerry
Falwell masks.
ed. 1992).

[Vol. 3:1



narrow version of “self-governance.”’59 Alternative rationales
that would more fully value fiction, including those emphasizing
human dignity,”6′ self-fulfillment,161 and the expression of
non-cognitive meaning,162 had found a place in the Court’s
jurisprudence. Such notions, however, have become
conspicuously absent from the current Court’s First Amendment
This is not to say that, perforce of its not making
descriptive truth claims, all fiction is devoid of pointed political
and social statement. There is of course the genre of didactic
fiction which does have a reasonable claim to protection under
the even a narrow “self-governance” rationale.63 The Hustler

159 See supra note 148.
160 See, e.g., Cohen v. California, 403 U.S. 15, 24 (1971), in which the Court
discusses the values of free expression and concludes that “no other approach would
comport with the premise of individual dignity and choice upon which our political
system rests.” See also Thomas I. Emerson, Toward a General Theory of the First
Amendment, 72 YALE L.J. 877, 878-881 (1963) (“[S]upression of belief, opinion and
expression is an affront to the dignity of man, a negation of man’s essential nature”).
161 “Those who won our independence.., valued liberty both as an end and as
a means. They believed liberty to be the secret of happiness and courage to be the
secret of liberty.” Whitney v. California, 274 U.S. 357 (1927) (Brandeis, J.,
concurring). See also, Martin H. Redish, The Value of Free Speech, 130 U. PA. L.
REV. 591, 601 (1982) (“The constitutional guarantee of free speech ultimately serves
only one true value, . . . ‘individual self-realization.”‘
162 As the Court said in Cohen,
[M]uch linguistic expression … conveys not only ideas capable of
relatively precise, detached explication, but otherwise inexpressible
emotions as well . . . We cannot sanction the view that the
Constitution, while solicitous of the cognitive content of individual
speech, has little or no regard for that emotive function which,
practically speaking, may often be the more important element of
the overall message sought to be [communicated].
403 U.S. 15, 19 (1971).
163 Works devoted to pointed political/social commentary can be found running
the spectrum of literary styles. See, e.g., HARRIET BEECHER STOWE, UNCLE TOM’S
CABIN (1852) (slavery/melodrama), ALFRED JARRY, UBu Ro1 (1896)


piece, however, like most fictional works, is not of this type.
Fictional works like the Hustler piece, which incorporate
public and political figures, can be said, though, to make a
significant non-substantive contribution to “self-governance” that
is usually overlooked. They help mitigate the sense of propriety
and fear that can intimidate others from setting up booths at the
marketplace of ideas or from voicing those ideas more
forcefully.164 Judge Wilkinson touched on this when he
wrote, in his dissent from the Fourth Circuit’s denial of
rehearing en banc in Falwell, “By cutting through the
constraints imposed by pomp and ceremony, [such works are]
a form of irreverence as welcome as fresh air . . . Nothing is
more thoroughly democratic than to have the high-and-mighty
lampooned and spoofed.”’165 This is what might be called the
“anti-honorific” function of works that “pointlessly” satirize
public officials and persons.
“Honor” here refers not to either the core of human
respect all can claim (“dignity”) or the regard due for
achievements earned. It refers, rather, to the deference given
solely by virtue of social position.166 This is the near
ceremonial deference given government officials, clergy, and

(1941) (fascism/epic theatre), GEORGE ORWELL, ANIMAL FARM (1946) (Soviet
socialism/allegory), ATHOL FUGARD, SIZWE BANSI IS DEAD (1972)
(apartheid/realism), and MARGARET ATWOOD, THE HANDMAID’S TALE (1985)
(patriarchy/fantasy). See also RICHARD A. POSNER, LAW AND LITERATURE: A
MISUNDERSTOOD RELATION 321-22 (1988) (distinguishing “truth claims” from “social
comment” as relevant to defamation in fiction).
164 The rationale is generally traced to Justice Holmes’ dissent in Abrams v.
United States, 250 U.S. 616, 630 (1919):
[T]he ultimate good desired is better reached by free trade in ideas-
-that the best test of truth is the power of the thought to get itself
accepted in the competition of the market.
165 Falwell v. Flynt, 805 F.2d 484, 487 (4th Cir. 1986).
166 “An individual … claims a right to [honor] by virtue of the status with
which society endows his social role.” Robert C. Post, The Social Foundations of
Defamation Law: Reputation and the Constitution, 74 CAL. L. REv. 691, 700 (1986).

[Vol. 3:1


select others not for who they are, but what they are--their
social status. The notion of "honor" posits and reinforces social
hierarchy and is, in that sense, deeply anti-egalitarian. More
particularly, it is the very dynamic the Court in New York Times
v. Sullivan found incompatible with "uninhibited, robust and
wide open" debate.'67 Sullivan's rejection of seditious libel
"is predicated upon an implicit rejection of the honorific status
of government officials."'68
Satire implicitly attacks that honorific status. It loudly
proclaims the freedom to do so. The particular political
message a satire may carry can be seen as merely incidental to
this central and omnipresent function. In its swift talent at
reminding us what all our little emperors look like without
clothes, it serves the central meaning of New York Times. Satire
invites the more factually minded speakers among us to come
raise their voices.
The "falsity" analysis that the Court has developed in
Falwell and Milkovich fails to take account of the fundamental
distinctions between fiction and non-fiction. The rather modest
alterations to that analysis suggested by this Article are
prompted by the belief that that analysis fails to adequtely
protect works of fiction. While such works, this Article
maintains, do indeed fail to make claims to descriptive truth,
they have no lesser claim to First Amendment protection.

167 376 U.S. 254 (1964).
169 Post, supra note 166, at 724. See also, Kalven, The New York Times Case:
A Note on "The Central Meaning of the First Amendment," 1964 Sup. CT. REV. 191,


Volume 03, Issue 1, pp 41-56, McPherson

Causation: The Forgotten Element of

Conflict Malpractice

Edwin F. McPherson*


In recent times, by far the most popular of all of the

available species of legal malpractice claims has been and will

most likely continue to be malpractice based upon a perceived

conflict of interest. Particularly in the entertainment industry,

such claims often arise from underlying transactional matters

either because the attorney has entered into a business

transaction with his or her client or because the attorney has

represented two or more clients in the same transaction with

competing interests.

Certainly, one could argue that there is nothing inherently

unethical with “doing business with” one’s own client. After

all, many lawyers have clients that are quite educated and

extremely sophisticated. In fact, some clients are often far more

savvy than their attorneys, particularly in the entertainment and

real estate fields, where the vast majority of these cases arise.

This author has argued that it is not necessarily inherently

unethical for an attorney to represent two or more clients in the

same deal, when that “deal” is of a transactional nature and

when the relationships that cause the “conflicts” actually

enhance the deal.’

Partner of the entertainment and ligitigation firm of McPherson &

Kalmansohn, Century City, California.

I      Edwin F. McPherson, Conflicts in the Entertainment Industry.. .Not!, THE

ENTERTAINMENT AND SPORTS LAWYER, Vol. 10, Number 4, Winter 1993; cf J.

Anderson and D. Miller, Professional Responsibility 101 – A Response to “Conflicts



Notwithstanding the relative sophistication of some

entertainment clients, there are rules that protect all clients from

the appearance of gross impropriety that most commentators

agree naturally accompanies such business relationships. Those

guidelines appear in the California Rules of Professional

Conduct, specifically  Rules 3-300 and 3-310.       The Rules

provide standards by which all attorneys who are licensed in

California must govern their conduct. Compliance with the

Rules allows attorneys both to continue the privilege of

practicing law in California and to avoid liability in a legal

malpractice suit.

Of course, some experts maintain that the Rules set forth

only a minimum standard. Strict compliance with the Rules will

absolve attorneys of liability with the State Bar, but will not

necessarily insulate them from legal malpractice liability.2 In

any event, one thing is clear: non-compliance with the express

terms of the Rules will expose an attorney both to disciplinary

action by the State Bar and to malpractice liability.

The first Golden Rule and the best advice in any situation

potentially involving Rule 3-300 is “DO NOT ENGAGE IN


second Golden Rule in dealing with 3-300 is “DO NOT


ENTS.” There is a concomitant Golden Rule with respect to

in the Entertainment Industry . .. Not!,” THE ENTERTAINMENT AND SPORTS

LAWYER, Vol. 11, Number 2, Summer 1993.

2      For instance, some expert witnesses maintain that, notwithstanding the

general consensus that a requirement of a written disclosure has always been

considered the better and more onerous means by which to ensure that a client knows

and understands the nature of the conflict, a separate oral explanation of the nature

of the conflict should also be required. However, there is no support for this

proposition in the Rules of Professional Conduct and little, if any, support in the


[Vol. 3:1

1995]     CAUSATION: THE FORGOTTEN ELEMENT                  43

Rule 3-310. If one insists on violating the Golden Rule (which

is designed only to reduce the likelihood of a malpractice claim,

not to eliminate the possibility completely, which perhaps

nobody can do with any degree of certainty), there are certain

things that must be done before entering into the business

relationship with your client.

Rule 3-300, which deals with attorneys entering into

business transactions with their clients, provides as follows:

An attorney shall not enter into a business

transaction with a client; or knowingly acquire an

ownership, possessory, security, or other pecuniary

interest adverse to a client, unless each of the

following requirements has been satisfied:

(1)    The transaction or acquisition and its

terms are fair and reasonable to the client and are

fully disclosed and transmitted in writing to the

client in a manner which should reasonably have

been understood by the client; and

(2)    The client is advised in writing that

the client may seek the advice of an independent

lawyer of the client’s choice and is given a

reasonable opportunity to seek that advice; and

(3)    The client thereafter consents in

writing to the terms of the transaction or the terms

of the acquisition.3

Rule 3-310, which deals with the representation of two

or more clients with competing, potentially adverse interests,

provides as follows:

3      CAL. RULES OF PROFESSIONAL CONDUCT Rule 3-300 (1994).


A member shall not, without the informed written

consent of each client:

(1)   Accept representation of more than

one client in a matter in which the interests of the

clients potentially conflict; or

(2)   Accept or continue representation of

more than one client in a matter in which the

interests of the clients actually conflict; or

(3)   Represent a client in a matter and at

the same time in a separate matter accept as a

client a person or entity whose interest in the first

matter is adverse to the client in the first matter.4

Make no mistake about it, an attorney who does not do

these things will get sued! There are many lawyers and clients

in the entertainment industry who are conversant in the Rules.

The instant that something goes wrong with a deal, they are

quick to use the Rules to their advantage and to fird a scapegoat

for whatever went wrong. After all, who ever heard of a con-

flict/malpractice case arising out of a hugely successful motion

picture or record that is destined to earn massive profits for

years to come?

However, even the Golden Rules and pristine compliance

with the Rules of Professional Conduct may not be enough to

prevent malpractice suits in the first place, let alone insulate you

from liability. But not to worry, there is still some semblance

of hope, and that hope lies within the definition of malpractice



[Vol. 3:1

1995]     CAUSATION: THE FORGOTTEN ELEMENT                  45


The elements of a cause of action in tort for professional

negligence are “(1) the duty of the professional to use such

skill, prudence and diligence as other members of his profession

commonly possess and exercise; (2) a breach of that duty; (3)

a proximate causal connection between the negligent conduct

and the resulting injury; and (4) actual loss or damage resulting

from the professional’s negligence.”5   In a legal malpractice

action, as in most negligence cases, the lawyer’s liability is

limited to “all damages directly and proximately caused by his


In a simple case of legal malpractice (if there is such a

thing), causation is not hotly disputed. For example, in a case

in which an attorney allows a statute of limitations to run on his

or her client’s claim, it is fairly easy to determine who caused

the client’s damages when a judge grants summary judgment

and dismisses the client’s underlying claim (assuming that the

client had a good case in the first place–which he must also


A conflict/malpractice case, however, is more compli-

cated, by definition. First, it can be extremely difficult to

ascertain particular facts which are normally very easy to

discover.   For example, it is a formidable task to find

information suggesting when the malpractice was or should have

been discovered and when the actual damage occurred, both for

statute of limitations purposes.

5      Williams v. Wraxall, 39 Cal. Rptr. 2d 658, 663 (Ct. App. 1995) (citing

Jackson v. Johnson, 7 Cal. Rptr. 2d 482, 484-85 (Ct. App. 1992)); see also Budd v.

Nixen, 491 P.2d 433, 436 (Cal. 1971); Purdy v. Pacific Auto. Ins. Co., 203 Cal. Rptr.

524, 533 (Ct. App. 1984).

6      Smith v. Lewis, 530 P.2d 589, 597 (Cal. 1975) (citing Pete v. Henderson,

269 P.2d 78, 79 (Cal. Ct. App. 1954)); DiPalma v. Seldman, 33 Cal. Rptr. 2d 219

(Ct. App. 1994).


[Vol. 3:1

In a conflict/malpractice case, as opposed to a standard

malpractice case, causation is equally difficult to ascertain and

equally important. Nevertheless, this overlooked element must

be proven, whether the claim is pled in terms of negligence,

breach of contract, or breach of fiduciary duty; and it must be

proved by a preponderance of the evidence.7 Even a fraud-

based    malpractice    claim    is  not    actionable   without

proximately-caused damage.'

When a claim for legal malpractice has been made, the

operative question is: "What would have happened had the

lawyer acted    otherwise?"9    The parties are compelled      to

conduct a trial within the trial, in order to establish that the

defendant's conduct was a "substantial factor" in causing the

plaintiffs   damages,'"   and   that  "but   for"  the  lawyer's

professional negligence, the client would have prevailed in the

underlying action." This test of causation is something more

than a "50-50 possibility or a mere chance,""2 and must rise to

7      Skopp v. Weaver, 546 P.2d 307, 310 (Cal. 1976); United Community Church

v. Garcin, 282 Cal. Rptr. 368, 373 (Ct. App. 1991); McDonald v. John P. Scripps

Newspaper, 257 Cal. Rptr. 473, 475 (Ct. App. 1989).

Agnew v. Parks, 343 P.2d 118 (Cal. Ct. App. 1959); see also Garcia v.

Superior Court, 50 Cal. 3d 728, 737, 789 P.2d 960 (Cal. 1990); Committee on

Children's Television, Inc. v. General Foods Corp., 673 P.2d 660, 674 (Cal. 1983);

Williams, 39 Cal. Rptr. 2d at 664 ("A 'complete causal relationship' between the

fraud or deceit and the plaintiffs damages is required."); Wallis v. Farmers Group,

Inc., 269 Cal. Rptr. 299, 308 (Ct. App. 1990); Nagy v. Nagy, 258 Cal. Rptr. 787, 790

(Ct. App. 1989) ("Fraudulent representations which work no damage cannot give rise

to an action at law.").

9      United Community Church, 282 Cal Rptr. at 373.

10     Mitchell v. Gonzales, 819 P.2d 872, 878-79 (Cal. 1991); Osborn v. Irwin

Memorial Blood Bank, 7 Cal. Rptr. 2d 101, 107-08 (Ct. App. 1992).

11     Id.; see also Williams, 39 Cal. Rptr. 2d at 658; Sukoff v. Lemkin, 249 Cal.

Rptr. 42, 44 (Ct. App. 1988).

12     Duarte v. Zachariah, 28 Cal. Rptr. 2d 88, 91 (Ct. App. 1994); see also

Bromme v. Pavitt, 7 Cal. Rptr. 2d 608, 614 (Ct. App. 1992); Dumas v. Cooney, 1

Cal. Rptr. 2d 584, 589 (Ct. App. 1991).

1995]     CAUSATION: THE FORGOTTEN ELEMENT                 47

the level of a reasonable probability.”3

Where reasonable minds cannot differ regarding the

causation issue, the question may be considered as a matter of

law.14 A motion for nonsuit may therefore lie when, despite

the presentation of ample evidence of negligence, the plaintiff

cannot prove that the malpractice caused the damages now

sought. In that case, it may be possible to exclude certain

evidence of negligence by a motion in limine.

In a conflict/malpractice case involving an underlying

entertainment transaction, it is not easy to prove that the

plaintiff would not have lost all his money in the deal “but for”

the conflict of interest and the failure to disclose adequately that

conflict. This is not like proving an underlying personal injury

claim after the defendant lawyer let the statute of limitations


As stated by the California Supreme Court in Budd v.


If the allegedly negligent conduct does not cause

damage, it generates no cause of action in tort.

[Citation] The mere breach of a professional duty,

causing only nominal damages, speculative harm,

or the threat of future harm–not yet realized–does

not suffice to create a cause of action for negli-

gence. [Citations] Hence, until the client suffers

appreciable  harm   as a   consequence of    his

attorney’s negligence, the client cannot establish a

13    Budd v. Nixen, 491 P.2d 433, 436 (Cal. 1971); Bromme v. Pavitt, 7 Cal.

Rptr. 2d at 614; Cottle v. Superior Court, 5 Cal. Rptr. 2d 882, 897 (Ct. App. 1992);

Dumas v. Cooney, I Cal. Rptr. 2d at 589.

14    Budd, 491 P.2d at 436.

15    Id. at 433.


cause of action for malpractice.’6

In another case, Sprigg v. Garcin,17 the court held that

even if negligence is conclusively proved by the former client,

that negligence must be shown to have proximately caused the

precise damages of which the plaintiff complains, or the action

will fail as a matter of law. The Court of Appeal concluded

that the trial court erred in denying the defendant lawyers’

motion for judgment notwithstanding the verdict. The court

ruled that there was no evidence whatsoever from which a jury

could determine that the defendants’ activities, albeit negligent,

legally caused the injuries for which the plaintiff sought

redress. ”

After determining that the defendants’ negligence could

be inferred from the facts of the case, the Sprigg court noted:

But the record simply is devoid of any evidence

from which it can be inferred that the defendants’

negligent acts caused any injury to plaintiff. No

statute of limitations ran or affirmative defense

assertable by [the adverse party in the underlying

action] was raised by reasons of defendants’

activities . . . . [The attorney] testified that the

amended complaint which he filed included

allegations sufficient for the plaintiffs’ recovery of

all damages suffered by them, including damages

for loss of use during the restoration period, and

there was no evidence that the settlement which

[the attorney] eventually negotiated with [the other

16    Id. at 436 (emphasis added); see also Alhino v. Starr, 169 Cal. Rptr. 136,

147 (Ct. App. 1980); Commercial Standard Title Co. v. Superior Court, 155 Cal.

Rptr. 393, 398 (Ct. App. 1979).

17    164 Cal. Rptr. 677, 680 (Ct. App. 1980).

I8    1,4

[Vol. 3:1

1995]    CAUSATION: THE FORGOTTEN ELEMENT                  49

side] was in an amount smaller than it would have

been except for defendants’ activities . . .19

The court concluded that, as a matter of law, the absence of

causation precluded any recovery whatsoever by plaintiffs.2°

Similarly, in In re Easterbrook,2′ the plaintiff/client

failed to make “any showing of actual harm.” In that case, the

court ruled that:

[D]amages may not be based on sheer speculation

or surmise, and the mere possibility or even

probability that damage will result from wrongful

conduct does not render it actionable.22

Accordingly, the complaint for legal malpractice was stricken at

the pleading stage for failure to state a cause of action.

A.     Analogous Securities Cases

Bastian   v.  Petren   Resources    Corp.23  discussed

extensively the causation requirement in tort cases where the

loss of an investment has been alleged. This Seventh Circuit

securities case is very instructive–and should be completely

dispositive–with respect to conflict/legal malpractice cases.

In Bastian, the plaintiffs invested $600,000 in oil and gas

limited partnerships that were promoted by the non-lawyer

defendants. The plaintiffs took the position in the trial court

that it was enough to allege under the securities laws that they

would not have invested “but for” the fraud. This is, not

19     Id. (emphasis added).

20     Id.

21     244 Cal. Rptr. 652 (Ct. App. 1988).

22     Id at 654.

23     892 F.2d 680 (7th Cir.), cert. denied, 496 U.S. 906 (1990).


insignificantly, a typical allegation in legal malpractice cases.

The trial court disagreed with the plaintiffs and dismissed

the entire action, holding that the contention that they would not

have invested was irrelevant. The Court of Appeals affirmed,

stating that

. . it is an instance of the common law’s

universal requirement that the tort plaintiff prove

causation. [Citation]. No hurt, no tort ….

The plaintiffs alleged that they invested in the

defendants’ limited partnerships because of the

defendants’ misrepresentations, and that their

investment was wiped out. But they suggest no

reason why the investment was wiped out. They

have alleged the cause of their entering into the

transaction in which they lost money but not the

cause of the transaction’s turning out to be a

losing one. It happens that 1981 was a peak year

for oil prices and that those prices declined

steadily in succeeding years. [Citation.] If the

plaintiffs would have lost their investment regard-

less of the fraud, any award of damages to them

would be a windfall ….

“Loss causation” is an exotic name–perhaps an

unhappy one–for the standard rule of tort law is

that the plaintiff must allege and prove that, but

for the defendant’s wrongdoing, the plaintiff would

not have incurred the harm of which he complains

…. No social purpose would be served by en-

couraging everyone who suffers an investment loss

because of an unanticipated change in market

conditions to pick through offering memoranda

[Vol. 3:1

1995]     CAUSATION: THE FORGOTTEN ELEMENT                   51

with a fine-tooth comb in the hope of uncovering

a misrepresentation. Defrauders are a bad lot and

should be punished, but Rule 1 Ob-5 does not make

them    insurers  against   national    economic


Similarly, McGonigle v. Combs25 involved alleged

securities violations in connection with the private placement of

stock in a company named Spendthrift Farms, Inc. Several

investors sued co-owners of the company, as well as attorneys,

consultants, an investment bank, an accounting fnrm, and a

commercial bank. The trial court dismissed all of the claims

against the “professional defendants,” including the attorneys,

some pursuant to the defendants’ motion for summary judgment

and the rest on a directed verdict.

The Ninth Circuit Court of Appeals affirmed the

judgment in all respects. In its decision, the court engaged in

a lengthy discussion concerning the securities law concept of

“transaction causation” versus “loss causation,” which, without

the labels, is identical to the concept used in legal and other

malpractice cases.

Transaction causation refers to a situation in which,

absent the misrepresentation or omission, the plaintiff would not

have invested in the stock, or that “the violations in question

caused the plaintiff to engage in the transaction.”,26 In order

to show transaction causation:

[A] plaintiff must demonstrate that he relied on

24    892 F.2d at 684-86 (emphasis added).

25    968 F.2d 810 (9th Cir. 1992).

26    Id. at 820 (citing Hatrock v. Edward D. Jones & Co., 750 F.2d 767, 773 (9th

Cir. 1984); see also Securities Investor Protection Corp. v. Vigman, 908 F.2d 1461,

1467 (9th Cir. 1990), rev’d on other grounds sub nom., Holmes v. Securities Investor

Protection Corp., 503 U.S. 258 (1992).


the misrepresentations in question when he entered

into the transaction which caused him harm.27

Loss causation refers to a situation in which the

misrepresentations or omissions actually cause the harm, i.e., the

loss in value of the stock, property, or other investment:

“Loss causation” is simply a label used to describe

the standard rule of tort law that a plaintiff must

allege and prove a sufficient causal connection

between the defendant’s wrongdoing and the

plaintiff’s harm.

“[L]oss causation” is the standard common law

fraud rule (on which see Prosser and Keeton on

the Law of Torts § 110, at p. 767 (5th ed. 1984)),

merely borrowed for use in federal securities fraud


The following jury instruction in the McGonigle case was

later endorsed by the Court of Appeals:

Each plaintiff must show that except for the

misrepresentation or omission the loss would not

have occurred, and the loss was either a direct

result or a reasonably foreseeable result of the

misleading statements or omissions. It is not

enough for the plaintiffs to show that but for the

misrepresentations or concealments they would not

have made their investments. The plaintiffs must

show that the difference in this value of their

27    Vigman, 908 F.2d at 1467.

28    Id. at 1467-68 (citing Bastian, 892 F.2d at 686).

[Vol. 3:1

1995]    CAUSATION: THE FORGOTTEN ELEMENT                 53

investment was connected to and a result of the

misrepresentations   or  concealments  of  the

defendants, and not from some other cause or

causes. In other words, each plaintiff must prove

not   only   that   the  misrepresentations   or

concealments caused him to make his purchase,

but also that they were the reasons why the value

of the stock turned out to be less than the plaintiff

thought it was going to be.29

B.    Practical Application to Legal Malpractice Cases

These principles are applicable to legal malpractice cases

and other negligence cases. If a plaintiff chooses to sue an

attorney  for   malpractice  because   that  attorney  either

misrepresented something to him relative to the deal or because

the attorney had a conflict of interest, that plaintiff must prove

not only that he would not have invested in the deal but for the

misrepresentation or conflict, but also that the value of the deal

was diminished because of the misrepresentation or conflict.

From a defense perspective, the key to these cases is the

last sentence of the previously cited Bastian passage, in which

the court concluded that ethical rules should not make negligent

defendants insurers against adverse market conditions30 That

sentiment should apply to all professionals including attorneys.

An attorney who has been alleged to have a conflict of interest

does not become the defacto insurer of his client’s investment.

This should be true whether or not he failed to give adequate

conflict disclosures and whether or not he failed to advise the

client to seek the advice of independent counsel.

29     McGonigle, 968 F.2d at 820 n.9 (emphasis added).

30     Bastian, 892 F.2d at 686.


The facts of the aforementioned securities cases are not

dissimilar to the facts of conflict/malpractice cases in the

entertainment industry, and the proof requirements in those

cases should equally apply to entertainment cases. However,

unlike securities caselaw, there have been few, if any,

conflict/malpractice cases involving the entertainment industry

that have been reported at the appellate level. This is not

surprising because these cases are extremely expensive to

litigate and they generally engender considerable adverse


Nonetheless, the plaintiff/client must prove that but for

the lawyer’s negligent conduct, the loss in value would not have

occurred. In this particular situation, one could argue that, as

a practical matter, the burden essentially shifts to the plaintiff to

prove that it was not a “bad film” or a “bad record” that caused

the loss of the plaintiffs investment, but the negligence of the

defendant/attomey.3′    This is not much different from      the

requirement of proving the viability or a claim that is ultimately

dismissed on statute of limitations grounds.

Theoretically, a plaintiff/client would have to prove that

the defendant/attorney did something to benefit himself (if he is

also a principal in the deal) or to benefit his other client(s) (if

he is representing more than one client in the deal), or both, to

the detriment of the plaintiff/client, and that this act actually

caused the precise detriment of which the client complains.

In the aforementioned hypothetical situation, the attorney

may have drafted a limited partnership agreement that allocated

99 percent of all of the anticipated profits in a film (or 99

percent of the royalties on a record) to the attorney/principal (or

31     There is support for this in McGonigle, 968 F.2d at 820 n.9, wherein the

trial court’s instruction to the jury was adopted by the Ninth Circuit as follows: “The

plaintiffs must show that the difference in this value . . . was . . . a result of the

misrepresentations . . . of defendants, and not from some other cause or causes.”

(emphasis added).

[Vol. 3:1

1995]    CAUSATION: THE FORGOTTEN ELEMENT                  55

other client) for minimal work and/or capitalization, and one

percent to the plaintiff/client for the majority of the work and/or

capitalization. Most observers would agree that such a deal

would be grossly unfair and a violation of Rule 3-300.

However, while the attorney      may   be subject to

disciplinary action by the State Bar as a result of his violation

of the Rule, he will not be subject to liability for malpractice if

the loss of the client’s investment had nothing to do with the

relative split of the profits from the venture. The client’s loss

may be the result of a poor quality film which therefore

performs poorly at the box office. Thus, where there are no

profits or royalties paid, the issue of who would have received

those profits or royalties if they did exist is irrelevant.

Similarly, an attorney may represent two clients who both

have net profit participations in the same picture. If one of the

clients later sues, claiming that the deal was unfair because she

had fewer points than a lesser-known co-star, she will not

prevail if the picture made no net profits to divide. However,

there are situations in which the attorney might lose. The

attorney might have had something to do with the failure of the

picture, or he might have also represented a gross profit

participant who, by definition, takes money away from the net

profit participants. But as before, if the client’s loss is the result

of forces outside the attorney’s control, the client will lose a

conflict/malpractice suit.


Although nobody likes to admit it, legal malpractice

cases, even in the entertainment industry, are nothing more than

a subset of negligence or fraud cases. They have the same

requirements of pleading and proof. Potential plaintiffs in these

cases must be prepared to play by the same rules that control in

56      UCLA ENTERTAINMENT LAW REVIEW              [Vol. 3:1

generic negligence and fraud cases. In a time when everyone

is overanxious to sue everyone else, over anything, and most

people are especially eager to “blame it all on the lawyer” (or

the personal manager, business manager, or agent), it is

especially useful to learn that entertainment lawyers are held to

the same standards as all other attorneys.

Volume 03, Issue 1, pp 57-108, Sarem

The First Amendment: Broadening the Information Superhighway

Scott A. Sarem*

In Memory of My Brother

David Andrew Sarem

January 1963 – November 1995


For   the  last one-hundred    years,  telephones   have

revolutionized the way in which people communicate. A new

era began in the late 1950s when the advent of cable television

allowed telephone companies to provide more than only two-

way telephone service. However, since that time, Congress and

the Federal Communications Commission (“FCC”) have

severely limited telephone companies’ activity in the cable

industry through pole access laws forcing telephone companies

to share their telephone poles with cable operators’ and laws

preventing telephone companies’ cross-ownership of phone and

cable services.2   These cross-ownership    rules were largely

responsible for the rapid growth of the modem cable television

J.D., UCLA School of Law, 1995; B.A., University of California, Riverside,

1991. Special thanks to Winston Johnson and Charles Bush, who originally inspired

me to write this Comment.

I     Since telephone companies owned all the poles along which telephone

communications were sent, Congress enacted pole access laws to prevent telephone

companies from denying telephone pole access to cable operators.

2     In 1970, the Federal Communications Commission imposed restrictions that

prohibited telephone companies from owning and operating both a telephone service

and a cable service in the same local service area so that they could not develop a

local communications monopoly.


industry. In fact, the original laws prohibiting cross-ownership

between local telephone companies and local cable operators are

still in effect today. This Comment attempts to show that on

both practical and constitutional grounds, the justifications for

these rules no longer exist.  In recent years, telephone

companies have helped develop a technology that enables them

to transmit video signals through telephone lines. This new

technology provides a video dialtone that enables telephone

companies to transmit one-way video programming and

interactive video communication to consumers. Additionally,

the video transmission is served to consumers through a hybrid

of fiber optic telephone lines and coaxial cable. Furthermore,

unlike a traditional telephone server, a video dialtone server has

the capability to control the content of the programming sent

over its communication lines.

The advent of video transmission through telephone lines

has brought with it challenges to existing communications

regulations on First Amendment grounds. One regulation that

has been challenged is Section 533(b) of the 1992 Cable Act

which permits, with some exceptions, telephone companies to

supply video programming to the consumer provided that such

service is not conducted in the telephone company’s local

telephone service area by either the telephone company itself or

by any of its affiliates.3 The FCC’s rationale behind Section

533(b) was to ensure that telephone companies could not cross-

subsidize their video transmission service with their telephone

service. In doing so, they would artificially shift costs from one

service to another in an attempt to lower video transmission

service fees to the consumer and compete unfairly with other

3     See 47 U.S.C. § 533(b) (1995); see also The 1992 Video Dialtone Order, 7

F.C.C.R. 5781 (1992).

[Vol. 3:1

1995]             INFORMATION SUPERHIGHWAY                             59

video transmission service companies.4

The purpose of this Comment is to explore the

constitutionality and subsequent applicability of Section 533(b)

of the 1992 Cable Act, which bans, with certain exceptions,

local cross-ownership between telephone companies and video


The    government       asserts   that   the   cross-ownership

restriction imposed by Section 533(b) promotes the public

4     See, e.g., Chesapeake and Potomac Tel. Co. v. United States, 830 F. Supp.

909, 930 n.31 (E.D. Va. 1993), aft’d, 42 F.3d 181 (D.C. Cir. 1994), cert. granted,

115 S. Ct. 2608 (1995).

Local telephone companies have substantial opportunity to engage

in cross-subsidization when . . . both the competitive video

transmission service and the monopoly service are provided on

common facilities with common costs …. Common costs mean

that cross-subsidization is virtually impossible to detect and

eliminate. It is the existence of significant common costs which

differentiates telephone companies [from other potentially anti-

competitive actors]. . . . One of the most difficult aspects of

telephone regulation is the assignment of costs to their causes.

Cable and telephone systems share a certain amount of capital

equipment; allocating shared costs between these capital accounts

on the basis of actual cost causation will be difficult or impossible.

But see id. at 930 n.32 (“It is difficult to conceive that there could be any substantial

costs common to the transmission of video and other transmission signals, on the one

side, and the creation and packaging of video programming on the other.”).

5     47 U.S.C. § 533(b) provides in pertinent part:

(1) It shall be unlawful for any common carrier … to provide

video programming directly to subscribers in its telephone service

area, either directly or indirectly through an affiliate owned by,

operated by, controlled by, or under common control with the

common carrier.

(2) It shall be unlawful for any common carrier. . . to provide

channels of communication or pole line conduit space, or other

rental arrangements, to any entity which is directly or indirectly

owned by, operated by, controlled by, or under common control

with such common carrier, if such facilities or arrangements are to

be used for, or in connection with, the provision of video

programming directly to subscribers in the telephone service area

of the common carrier.


interest because it prevents unfair competition and encourages

a diversity of ownership of communications outlets.6 This

Comment will argue that Section 533(b) of the 1992 Cable Act

should be repealed because the circumstances that justified its

original enactment no longer exist, and because it violates the

First Amendment of the United States Constitution. Section

533(b) is not narrowly tailored to achieve a significant

governmental interest. Rather, it limits a certain type of speech

when other less restrictive and more effective means are

available to achieve the governmental interest of precluding

anti-competitive behavior by the telephone companies. Several

circuit and   district court decisions, Senate   and   House

subcommittee reports, as well as recommendations by the FCC,

the Antitrust Division of the Department of Justice, and a

branch of the United States Department of Commerce, support

the proposition that Section 533(b) of the Cable Act should be




A.     The 1970 FCC Rule and its Progeny

Section 533(b) of the Cable Act was enacted in 1984.

However, telephone companies have been prohibited, with

certain exceptions, from providing cable television service as

early as 1970.7 When those restrictions were imposed, the

6      H.R. REP. No. 934, 98th Cong., 2d Sess. 56 (1984), reprinted in 1984

U.S.C.C.A.N. 4692.

7      See Application of Telephone Common Carriers for Section 214 Certificates

for Channel Facilities Furnished to Affiliated Community Antenna Television Systems

(Final Report and Order) 21 F.C.C.2d 307 (1970) [hereinafter "1970 Order"],

reconstructed in part, 22 F.C.C.2d 746 (1970); see General Tel. Co. of the Southwest

[Vol. 3:1


cable television industry was in its infancy and was referred to

as Community Antenna Television service ("CATV"). At that

time, CATV providers used large antennas in rural areas and

other places unable to receive clear television signals to deliver

television service to over-the-air customers who would have

otherwise been without television reception. The actual process

involved stringing cables, often on electric utility or telephone

poles, from the central antenna to the CATV customers.

In 1968, the FCC ruled that "telephone companies must

obtain   certification   pursuant   to   section   214    of   the

Communications Act, prior to constructing, acquiring, or

operating facilities to provide 'channel service' to cable

television companies."8    The FCC adopted this rule because

"the monopoly position of the telephone company in the

community [results in] effective control of the pole lines (or

conduit space) required for the construction and operation of

CATV systems. Hence, the telephone company is in an

effective position to preempt the market for this service. . ..”9

The resulting section 214 applications revealed an ownership

structure that consisted of affiliations between telephone

companies and television operators. As a result, the FCC

adopted a rule that precluded telephone companies and their

affiliates, absent an express exemption, from providing cable

v. United States, 449 F.2d 846 (5th Cir. 1971); see Chesapeake and Potomac, 830

F. Supp. at 911.

8    Id. at 912; see General Tel. Co. of California, 13 F.C.C.2d 448 (1968);

General Tel. Co. of California v. FCC, 413 F.2d 390 (D.C. Cir.), cert. denied, 396

U.S. 888 (1969); see also 47 U.S.C. § 214 (stating in pertinent part, “[n]o carrier

shall undertake the construction of a new line or of an extension of any line, or shall

acquire or operate any line, or extension thereof, or shall engage in transmission over

or by means of such additional or extended line, unless and until there shall first have

been obtained from the Commission a certificate that the present or future public

convenience and necessity require or will require the construction or operation, or

construction and operation, of such additional or extended line…

9    Chesapeake and Potomac, 830 F. Supp. at 912.



television service within their local telephone service areas.’0

This ruling was based on the concern that telephone companies

would be in a position to favor their own affiliates over

independent CATV providers and thus create a communications

monopoly in their respective communities.”

In 1978, Congress addressed rate regulation of the

telephone companies in relation to cable operators when it

passed the Pole Attachment Act.         The ensuing legislation

authorized the FCC to “regulate the rates, terms, and conditions

for pole attachments.’,12   The Pole Attachment Act did not

mandate access to the poles owned by the phone company.’3

Thus the Pole Attachment Act “only partially allayed the

Commission’s concerns regarding cable operators’ access to

telephone poles and conduit space.”’4

In 1981 the FCC issued a report that considered

alternatives to its policy regarding telephone company and cable

company local cross-ownership. However, the FCC concluded

that the previous restrictions must be retained because of the

threat of telephone company cross-subsidization and pole access

10   See 1970 Order at 307; see General Tel. Co. of the Southwest v. United

States, 449 F.2d 846 (5th Cir. 1971).

“    See 1970 Order, 21 F.C.C.2d at 324.

12   47 U.S.C. § 224(b)(1) provides in relevant part:

[T]he Commission shall regulate the rates, terms, and conditions for

pole attachments to provide that such rates, terms, and conditions

are just and reasonable, and shall adopt procedures necessary and

appropriate to hear and resolve complaints concerning such rates,

terms, and conditions. For purposes of enforcing any

determinations resulting from complaint procedures established

pursuant to this subsection, the Commission shall take such action

as it deems appropriate and necessary, including issuing cease and

desist orders, as authorized by section 312(b) of this title.

13    See FCC v. Florida Power Corp., 480 U.S. 245, 251 (1987).

14    Chesapeake and Potomac Tel. Co. v. United States, 830 F. Supp. 909, 913

(E.D. Va. 1993), cert. granted, 115 S. Ct. 2608 (1995).

[Vol. 3:1


discrimination.'5 Therefore, the FCC's justification for the

retention of the original local telephone company and cable

company cross-ownership rules was economic.16

B.     The 1984 Enactment of the Cable Act

By the 1980s the cable industry was experiencing

substantial growth and Congress adopted the Cable Act in 1984.

Section 533(b) of the 1984 Cable Act, the subject of this

Comment, was adapted directly from the earlier regulations

established by the FCC's 1970 Order, with the exception that

where the FCC had prohibited telephone company provision of

"CATV service," the new law prohibited telephone provision of

"video programming."'7 The Code defines video programming

as   "programming     provided    by, or   generally   considered

comparable to programming provided by, a television broadcast

station."      This   seemingly    stringent  rule  provided    for

exemptions, which included a rural exemption and a waiver

authority by the FCC.19 That the FCC was given the power to

15   Id.

16   Id. at 158, which states:

If telephone companies are able to cross-subsidize, the result could

very well lead to higher telephone rates and supra-competitive

profits for them. These profits could easily be used to under price

competing cable television operators, forcing them out of business,

thereby enabling the telephone companies to leverage their

regulated local exchange monopoly into an additional monopoly of

video transmitted services.

The fear of telephone company cross-subsidization is the main reason that

47 U.S.C. §533(b) still prevails. As will be discussed below, the FCC, Department

of Justice, as well as Senate and House subcommittees, have recommended that §

533(b) be repealed because the FCC now believes that it can control the cross-

subsidization threat through rate regulations and channel allotments.

17   Chesapeake and Potomac, 830 F. Supp at 913.

18   47 U.S.C. § 522(16).

,9   See 47 U.S.C. § 533(b)(3)-(4).



[Vol. 3:1

grant a waiver seems to suggest that Congress trusted it to

decide competently when cross-ownership will benefit the


No legislative findings of fact accompanied the enactment

of Section 533(b). However, it is not hard to ascertain the

congressional intent behind Section 533(b)'s enactment because

the   House   Committee     Report,   which    accompanied     the

legislation, indicated that the provision's intent was "to codify

current   FCC    rules  concerning    the   provision   of  video

programming over cable systems by common carriers .... ,,21

Section 533, as a whole, was intended to "prevent the

development of local media monopolies, and to encourage a

diversity of ownership of communications outlets.",22 Congress

must now decide whether Section 533(b) still works to further

these goals.23

C.     The Recommendations for Repeal of 47 US. C. § 533(b)

Since the enactment of the 1984 Cable Act, there have

been several recommendations for repeal of 47 U.S.C. § 533(b).

20     See, e.g., Chesapeake and Potomac, 830 F. Supp. at 913. The waiver

provision of § 533 suggests that the FCC is competent to regulate any video

programming transmitted by telephone companies to prevent any anti-competitive

behavior on behalf of the telephone companies. The FCC's ability to regulate a

cross-ownership case is one of the main reasons that the FCC itself has recommended

repeal of § 533(b).

21     See id. at 913 (quoting H.R. REP. No. 934, 98th Cong., 2d Sess. 56 (1984),

reprinted in 1984 U.S.C.C.A.N. 4655, 4693.

22      H.R. REP. No. 934, 98th Cong., 2d Sess. 55 (1984), reprinted in 1984

U.S.C.C.A.N 4655, 4692.

23     The FCC has stated that "any remaining risk of anti competitive conduct by

the local telephone companies is outweighed by the potential public interest benefits

their entry would bring." Video Dialtone Order, 7 F.C.C.R. 5781, 5849 ¶ 137

(1992). Also, any concern of anti-competitive behavior by the local telephone

companies has been attenuated by the enormous growth of the cable television

industry. Id. at 5848 ¶ 136.


Several House and Senate committees have considered bills that

would repeal Section 533(b). In fact, both the House and the

Senate have drafted communications legislation this year that

eliminates the local cross-ownership ban provided by Section

533(b).24 However, this proposed legislation will not eliminate

Section 533(b) until both the House and Senate agree on

communications legislation.25

1.     The FCC's Recommendations of Repeal and the Resultant

1992 "Video Dialtone Order"

In 1986, the FCC directed its Common Carrier Bureau to

prepare a notice of inquiry "on the question of the restriction on

cable   ownership    placed   on  local   exchange   telephone

companies."'26  In In re Telephone Company--Cable Television

Cross Ownership Rules (Notice of Inquiry),27 as well as In re

Telephone Company--Cable Television Cross Ownership Rules

(Further Notice of Inquiry and Notice of Proposed Rule

Making),28 the FCC      tentatively concluded   that it should

recommend to Congress that 47 U.S.C. § 533(b) be repealed.

The FCC finally acted on these conclusions in August of 1992,

when it recommended that Congress

[a]mend the Cable Act to permit the local

telephone    companies     to    provide    video

24   SeeS. 652, 104th Cong., 1st Sess. 203 (1995); see also H.R. REP. NO. 1555,

104th Cong., Reg. Sess. (1995). The new communications legislation is significant

because in 1992 Congress adopted a new version of the Cable Act in which Section

533(b) remained intact. Until recently, it seemed unlikely that Congress would act

to repeal the cross-ownership ban that has existed since the early 1970s.

25   This assumes President Clinton will not veto the Telecommunications Act

of 1995.

26   Id at 914 (quoting 1 F.C.C.R. 864, 897 (1986)).

27   2 F.C.C.R. 5092 (1987).

28   3 F.C.C.R. 5849 (1988).



programming directly to subscribers in their

telephone service areas, subject to appropriate

safeguards. We find that such an amendment

would further promote our overarching goals…

by   increasing   competition    in  the   video

marketplace, spurring the investment necessary to

deploy an advanced infrastructure, and increasing

the diversity of services made available to the

public .. . .”    The FCC noted that when it

adopted the cross-ownership ban in 1970 the

Commission intended to prevent local telephone

companies from using their poles and conduits to

disadvantage    independent     cable   operator

competitors. Therefore, by precluding telephone

companies from providing video programming

directly to  subscribers, the  ban   gave   cable

television operators an opportunity to firmly

establish themselves as viable competitors.3″

After at least five years of research, the FCC concluded in 1992

that the cable industry’s enormous growth had attenuated the

risks of anti-competitive conduct by the local telephone

companies in connection with the direct provision of video


The tremendous growth of the modem-day cable industry

has all but eliminated the rationales that supported the 1970

Cross-Ownership Rule and its progeny. The FCC supported the

29     US West, Inc. v. FCC, 855 F. Supp. 1184, 1187 (W.D. Wash. 1994)

(quoting In re Telephone Company–Cable Television Cross Ownership Rules, 7

F.C.C.R. 5781, 5847 ¶ 135 (1992) [hereinafter Video Dialtone Order](second report

and order, recommendation to Congress, and second further notice of proposed

rulemaking, “the Video Dialtone Order”).

30     Id. (quoting 7 F.C.C.R. at 5848 ¶ 136 (footnote omitted)).

31     Id. (quoting 7 F.C.C.R. 5781, 5848 ¶ 137).

[Vol. 3:1


above assertion in its 1992 Video Dialtone Order when it stated


[w]hen the cross-ownership rules were adopted,

cable television (then called CATV) reached

approximately 9% of all homes and largely

consisted of small, limited capacity systems in

remote communities. Today, cable offers over 90

percent of American homes multichannel service

and is now a $20 billion industry. Rather than a

fledgling industry unable to compete, the cable

industry holds a leading position in the delivery

and provision of video programming to the

American   public.    In this sense, the cross-

ownership ban has fulfilled its purpose of ensuring

that the cable industry is able to thrive. Given this

widely changed competitive situation, we find it

reasonable to conclude that, with appropriate

safeguards on their entry, there is little threat that

the local telephone companies could preemptively

eliminate competition and monopolize the market

for video programming services.32

Despite congressional attempts to promote competition in

the cable television provider market, Section 533(b) has helped

cable television operators grow into virtual monopolies in

several communities.     In fact, cable operators have faced

competition from other cable operators in less than 1% of the

communities served by cable.33 In other words, it is not cost-

32   Id. at 1188 (emphasis added) (quoting 7 F.C.C.R. at 5848-49 ¶ 137

(footnotes omitted)).

33   Chesapeake and Potomac Tel. Co. v. United States, 830 F. Supp. 909, 915

(E.D. Va. 1993) (“Companies operating cable television systems have grown rapidly,

commensurate with growth in the industry. . . Despite Congressional efforts to



effective for two cable operators to compete in the same local

service area.

If local telephone companies are allowed to enter the

video programming market, the FCC should be able to regulate

their entry in a way that will allow companies other than

telephone companies to enter the local video service market and

become competitive.34 The Department of Justice asserts that

as long as telephone companies monopolize the phone service,

their incentive and ability to cross-subsidize and discriminate

will continue.     However, the anti-competitive     risks are

nonetheless outweighed by the pro-competitive benefits of

allowing telephone companies to provide video programming.5

Nevertheless, it has been argued that there are no pro-

competitive benefits for the consumer if telephone companies

are allowed to provide video programming in their local service

area. In support of this assertion, Bradley Stillman, legislative

counsel for the Washington-based Consumer Federation of

America, stated that “‘ [t]he FCC has failed to establish rules for

the road to protect consumers … while granting the telephone

companies the authority to build. . . .       Using the most

conservative numbers we are talking about an additional $16 per

month on the phone bill of every American household for the

next twenty years to pay for video dialtone. ,,36 Additionally,

he noted the difficulty the FCC’s staff of 26 auditors will face

trying to determine how much of a new network’s cost should

be attributed to the video carrying capability and how much to

promote competition in the cable industry, the provision of cable television has

remained a monopoly service in virtually every community. In 1991 cable system

operators faced competition from another operator in less than 1% of the localities

served by cable.”).

34     See Ameritech Corp. v. United States, 867 F. Supp. 721, 727 (N.D. I11.


35     Id.

36     Jube Shiver Jr., Phone Systems Get Permission To Compete With Cable, L.A.

TIMES, Oct. 21, 1994, at DI, D2.

[Vol. 3:1


the more traditional function of handling phone calls.37 If

Stillman is correct, it is possible that telephone companies will

be able to cross-subsidize and unfairly compete, which could

lead to a telephone company monopoly in video programming

through the video dialtone.  However, since local cable

programmers already have a natural monopoly over cable

service, both local telephone company video providers and cable

providers should be allowed to compete because one form of

monopoly should not be preferred over another.

Section 533(b) is outdated. It was originally enacted to

enhance the growth of cable television providers. Telephone

companies were precluded from competing with cable operators

because they were perceived to be monopolistic in nature and

predisposed to anti-competitive behavior. Because the majority

of local cable television operators are operating in a natural

monopoly, it is time to allow local telephone companies to

compete for the same business.   Additionally, the most

appealing aspect of allowing telephone companies to provide

video programming is that it may create more choices for

consumers (absent a natural monopoly like the present cable

system) as well as completely upgrade the United States'

telecommunications infrastructure.  The threshold question

seems to be whether the FCC will be able to prevent cross-

subsidization to avoid a telephone company monopoly over

video programming, and if so, whether the pro-competitive

benefits from allowing telephone companies to provide video

programming outweigh any residual anti-competitive risks


37   Id. at D2.



2.    Department      of   Justice,   Antitrust   Division’s

Recommendation to Repeal 47 U.S.C. § 533(b).

The Communications and Finance Section of the Antitrust

Division of the United States Department of Justice (“DOJ”)

recommended that telephone companies, referred to as local

exchange carriers, be permitted to own and directly provide

video programming.3s This was in response to a proposed

rulemaking by the FCC, which led to the Video Dialtone Order.

The DOJ has stated that it believes that the pro-competitive

benefits of allowing local exchange carriers to provide video

programming outweigh any anti-competitive risks involved.39

The DOJ enumerates those pro-competitive benefits by stating

that “it will allow another competitor to enter the video

programming market, . . . entry will increase the [local

exchange carriers'] willingness to take the financial risk of

developing broadband integrated networks[, and] . . . vertical

integration  will allow   them   to  achieve   efficiencies.”"4

Additionally, with regard to vertical integration, the DOJ finds

it unlikely that allowing telephone companies to vertically

integrate will have anti-competitive result because the cable

industry is already vertically integrated.4″ Instead, the DOJ

believes it will create more effective competitors and will

provide an alternative player with whom third parties may

bargain to carry their programming.42 The DOJ’s findings

assume that cable programmers will be able to keep up with

3s    See US West, Inc. v. United States, 855 F. Supp. 1184, 1188 (W.D. Wash.

1994) (quoting In re Telephone Company–Cable Television Cross Ownership Rules,

“DOJ Cross-Ownership Rules Reply,” CC Docket No. 87-266, 44-45 (Mar. 13,


39    Id.

40    Id

41    Id.

42    Id. at 45.

[Vol. 3:1


telephone companies. This is a suspect assumption merely

because telephone companies are much bigger than cable

programmers and can conceivably cross-subsidize their video

programming     service  with  their telephone    service  and

effectively price out cable companies.

The DOJ has shown a remarkable willingness to evolve

its standards as competitive environments evolve. For example,

in the above-cited DOJ reply on cross-ownership rules, the DOJ

stated that its current position is consistent with its prior

position regarding the necessity of the cross-ownership

restrictions because the cable market has changed and the prior

restrictions should be modified or removed to permit the market

place to function freely.43 In contrast to the DOJ's willingness

to repeal 47 U.S.C. § 533(b), Congress has consistently fought

the   telephone   companies'    attempts  to   become    video

programmers     in  their  local  telephone   service  areas.44

Consequently, there exists a tension because the administrative

branches of government are advocating one position and then

are compelled by Congress to enforce another.

This tension may indicate that significant change in the

existing law is pending. The DOJ and Congress both recognize

that, on the one hand, telephone company participation in video

programming will help spur competition and may benefit the

consumer, while on the other hand, that the telephone

companies' history is deeply rooted in monopolistic behavior.45

While    government    administrative  agencies   are   almost

43     Id.

44     See, e.g., Chesapeake and Potomac Tel. Co v. United States, 830 F. Supp.

909 (E.D. Va. 1993); see GTE California, Inc. v. FCC, 39 F.3d 940 (9th Cir. 1994);

see Ameritech Corp. v. United States, 867 F. Supp. 721 (N.D. I11. 1994).

45     The DOJ's apparent waffling may very well be the manifestation of the

government's suspicions that the telephone companies are predatory by nature and

therefore once they get established in the video programming business they will make

it next to impossible for cable programmers to compete.



universally calling for Section 533(b)'s repeal, Congress has

hesitated to act because there may not be other existing means

of regulating this emerging industry effectively.46 The DOJ's

arguments for the repeal of Section 533(b) will become more

persuasive when the FCC has a regulatory scheme in place that

will prevent a telephone company monopoly in the local video

programming business. At present, the FCC has decided to

regulate  telephone  company    entry  into  the  local video

programming market on a case by case basis in an attempt to

eliminate the possibility of cross-subsidization and resultant

monopolistic behavior.47

3.     Recommendation to Repeal 47 U.S.C. § 533(b) by the

United States Department of Commerce

Like   the   FCC    and    the   DOJ,   the   National

Telecommunications and Information Administration ("NTIA"),

a branch of the Department of Commerce, recommended in

1991 that 47 U.S.C. § 533(b) be repealed. However, the NTIA

recommended that Section 533(b) be repealed only if proper

safeguards are put in its place to eliminate the possibility of

anti-competitive behavior by telephone companies.48 However,

the NTIA's report seems to go a step further than the FCC and

DOJ proposals to repeal 47 U.S.C. § 533(b) by suggesting ways

to control the threat of cross-subsidization and discrimination.4

The NTIA suggests that the FCC already possesses the means

46     Because both the House and Senate have proposed legislation in which

Section 533(b) will be repealed, it is assumed that a satisfactory regulatory scheme


47     See In re the Application of New Jersey Bell Tel. Co., 9 F.C.C.R. 3677


48     US West, Inc., v. United States, 855 F. Supp. 1184, 1189 (W.D. Wash.

1994); see also National Telecommunications and Information Administration's

Infrastructure Report at 233 (October 1991).

49     US West, 855 F. Supp. at 1189.

[Vol. 3:1


to control telephone company cross-subsidization in their

accounting and cost allocation rules.   The FCC's existing

accounting and cost allocation rules have proven to effectively

control communication companies that try to cross-subsidize and

compete unfairly."     Regarding discrimination, the NTIA

concluded that the FCC should again look inward at existing

regulatory schemes and adapt them to this new technology.5'

For example, the NTIA has suggested that the earlier pole

access concerns "should be less serious than in the past, since

nearly 90 percent of U.S. homes have access to cable television

today."52     The   NTIA     additionally  noted   that  the

"antidiscrimination and pro-efficiency requirements of [current

FCC rules concerning the] provision of enhanced services would

be an effective way to satisfy” anti-discrimination goals.53

The NTIA has come up with a seemingly simple answer.

The FCC does not tend to embrace hard and fast rules that try

to deal with the problems associated with telephone company

cross-ownership of video dialtone and programming services.

The FCC has recommended that it decide each cross-ownership

case on an individual basis. By considering the merits of each

case, the FCC can achieve the government’s overarching goals

of increasing competition in the video marketplace, spurring the

investment necessary to deploy an advanced infrastructure, and

increasing the diversity of services made available to the

public.54 A standard that takes into account the likelihood of

cross-subsidization and predatory pricing by the telephone

companies and then attempts to minimize that threat will likely

achieve the government’s overarching goals of promoting

competition and encouraging diversity of ownership in the video

so     Id.

51     Id.

52     Id.

53     Id.

54     See Video Dialtone Order, 7 F.C.C.R. 5781, 5847 (1992).


74       UCLA ENTERTAINMENT LAW REVIEW                         [Vol. 3:1

programming industry."

4.      House and Senate Subcommittee Reports

Throughout the last five years, House and Senate

subcommittees have considered several bills that would repeal

47 U.S.C. § 533(b)56 and until recently, no such bill has passed

through either house.57 As mentioned earlier, both the Senate

55    This proposed standard would also try to minimize, as much as possible, the

threat of cross-subsidization by telephone companies from their phone service to their

video programming service so that they will be forced to fairly compete with rival

cable television programmers.

56    See, e.g., H.R. 1504, 103d Cong., 1st Sess. (1993); S. 1200, 102d Cong.,

1st Sess. (1991); H.R. 2546, 102d Cong., 1st Sess. (1991); S. 2800, 101st Cong.,

2d Sess. (1990); S. 1068, 101st Cong., 1st Sess. (1989); H.R. 2437, 101st Cong.,

1st Sess. (1989).

57    See S. 652, 104th Cong., 1st Sess. § 203 (1995); see also H.B. 1555, 104th

Cong., Reg. Sess. (1995). On several separate occasions the issue of whether or not

to repeal 47 U.S.C. § 533(b) has been considered in Congressional hearings. See,

e.g., Cable - Instructional TV and S. 1200 Communications Competitiveness and

Infrastructure Modernization Act of 1991: Hearings Before the Subcomm. on

Communications of the Senate Comm. on Commerce, Science and Transportation,

102d Cong., 2d Sess. (1992); Cable TV Consumer Protection Act of 1991: Hearings

Before the Subcomm. on Communications of the Senate Comm. on Commerce, Science

and Transportation, 102d Cong., 1st Sess. (1991); Cable Television Regulation:

Hearings Before the Subcomm. on Telecommunications and Finance of the House

Comm. on Energy and Commerce, 102d Cong., 1st Sess. (1991); Communications

Competitiveness and Infrastructure Modernization Act of 1990: Hearings Before the

Subcomm. on Communications of the Senate Comm. on Commerce, Science, and

Transportation, 101st Cong., 2d Sess. (1990); Cable TV Consumer Protection Act

of 1989: Hearings Before the Subcomm. on Communications of the Senate Comm.

on Commerce, Science, and Transportation, 101st Cong., 2d Sess. (1990); Cable

Television Regulation: Hearings Before the Subcomm. on Telecommunications and

Finance of the House Comm. on Energy and Commerce, 101st Cong., 2d Sess.

(1990); Oversight of Cable TV: Hearings Before the Subcomm. on Communications

of the Senate Comm. on Commerce, Science and Transportation, 101st Cong., 1st

Sess. (1989); Competitive Issues in the Cable Television Industry: Hearings Before

the Subcomm. on Antitrust, Monopolies and Business Rights of the Senate Comm. on

the Judiciary, 100th Cong., 2d Sess. (1988).


and the House have approved communications bills that would

repeal the telephone company and cable company cross-

ownership ban. However, Section 533(b) is still the prevailing

law until Congress agrees on a final form, notwithstanding a

Presidential veto.

Until 1995, both the House and the Senate have refused

to repeal Section 533(b). Congress' previous refusal to repeal

or modify Section 533(b) is thought-provoking in light of the

fact that it passed the Cable Television Consumer Protection and

Competition Act of 1992, which comprehensively revised the

previous regulations contained in the 1984 Cable Act.5" It is

interesting to point out that Congress has been advised by its

own subcommittees as well as other governmental agencies that

Section 533(b) should be repealed so that competition between

telephone companies and cable operators will be enhanced and

diversity of ownership will be achieved. In support of these

recommendations, "Congress specifically found that 'most cable

television subscribers have no opportunity to select between

competing cable systems,' resulting in 'undue market power for

the cable operator as compared to that of consumers and video

programmers. "'"9 Furthermore, Congress discovered that the

"cable industry has become highly concentrated" and that the

potential effects of such concentration are barriers to entry for

new programmers and a reduction in the number of media

voices available to consumers.",60 Additionally, in 1992, the

five largest cable system operators served over forty percent of

58     The Senate Committee on Commerce, Science, and Transportation's Report

accompanying the 1992 Cable Act expressly affirmed the viewpoint that repealing 47

U.S.C. § 533(b) would enhance competition. See S. REP. No. 92, 102d Cong., 1st

Sess. 18 (1991), reprinted in 1992 U.S.C.C.A.N. 1133, 1150.

59     US West, Inc. v. United States, 855 F. Supp. 1184 (W.D. Wash. 1994)

(citing Pub. L. No. 102-385, § 2(a)(2), 106 Stat. 1460, 1460 (1992)).

60     Id., citing Pub. L. No. 102-385, 106 Stat. 1460 § 2(a)(4) (1992)).



America’s   cable  subscribers.6′   Still after  all of this

information, Congress has refused to repeal or modify Section


A substantial governmental and First Amendment interest

exists in promoting a diversity of views through various types

of media. “The 1992 Cable Act attempted to address these

concerns by prohibiting exclusive local franchises, regulating or

limiting the rates cable providers may charge consumers and

unaffiliated programmers, and prohibiting cable providers from

owning wireless cable systems.’62 Curiously, the 1992 Cable

Act did not repeal Section 533(b) or otherwise open the cable

market to telephone companies. Does this represent the notion

that cable television operators as a whole may have a monopoly

as long as they compete among themselves, or that telephone

companies are so large that they will be able to somehow price

out cable operators and create their own monopolies?63 It is

clear that Congress needs to act swiftly so that these questions

may be resolved and a regulatory scheme may be put into action

to monitor the growth of this new emerging technology. There

is a very serious problem in government when the law espouses

one policy through an outdated statute and those regulatory

agencies appointed to enforce the law see its defects and

publicly comment on them. The government should be trusted

to augment the laws as needed to further the interest of the


In November 1994, an historic national election took

place in which the balance of power in both the House and

61    Id; see also Chesapeake and Potomac Tel. Co. v. United States, 830 F.

Supp. 909, 915 (E.D. Va. 1993).

62    Ameritech Corp. v. United States, 867 F. Supp. 721, 726 (N.D. I11. 1994).

63    See, e.g., Chesapeake and Potomac, 830 F. Supp. at 915; see GTE

California, Inc. v. FCC, 39 F.3d 940, 950 (9th Cir. 1994) (Nunan, J., dissenting).

[Vol. 3:1


Senate shifted to the right.'     Both legislative bodies have

currently proposed communications legislation which, if enacted,

would repeal Section 533(b).      If the 104th Congress moves

forward in the communications area it will help spur the

investment    necessary   to   upgrade    the   United    States'

telecommunications     infrastructure,  ultimately   benefitting

consumers. However, if the 104th Congress drags its feet, as

did its predecessor, Section 533(b)'s overturn by the courts as

violating  the  First Amendment seems        imminent.66    The

implications of a judicial solution are not yet apparent, but an

invalidation of Section 533(b) by the courts could result in the

telephone companies being allowed to compete in the video

programming industry with fewer restraints than if Congress had

enacted a regulatory scheme to comport with its overarching

goals of increasing competition and promoting diversity of


III.   DOES    47   U.S.C.   §  533(B)   VIOLATE    THE    FIRST


Because     Congress    has    been    slow    to   adapt

telecommunications law to rapidly changing technological and

economic circumstances, several telephone companies have

64   Victories in the 1994 midterm elections resulted in Republican control of

both the House and the Senate.

65   Given 47 U.S.C. § 533(b)'s history, it seems likely that Congress will have

to strike a delicate balance between the pro-competitive benefits of allowing

telephone companies to compete with local exchange carriers in video programming

with the very real threat of monopolistic behavior by those companies.

66   The First Amendment concerns surrounding 47 U.S.C. § 533(b) will be

discussed infra part III.

67   The United States Supreme Court will decide whether or not to reinstate §

533(b) sometime within the next six months. See Chesapeake and Potomac Tel. Co.,

830 F. Supp. at 909, cert. granted, 115 S. Ct. 2608 (1995).



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challenged 47 U.S.C. § 533(b) as violative of the First

Amendment.68      The First Amendment provides that "Congress

shall make no law . . . abridging the freedom of speech or of

the press .        "...,,69  The Supreme Court has held that cable

operators and programmers "engage in and transmit speech, and

they are entitled to the protection of the speech and press

provisions of the First Amendment."70            Courts have applied

three levels of scrutiny to statutes or other restrictions that

burden speech protected        by the First Amendment.71          These

levels are strict scrutiny,72 intermediate level or "heightened"

scrutiny,73 and rational basis scrutiny.74 The next section of

68    See GTE California, Inc. v. FCC, 39 F.3d 940 (9th Cir. 1994); see US West,

Inc. v. United States, 855 F. Supp. 1184 (W.D. Wash. 1994); see Chesapeake and

Potomac Tel. Co. v. United States, 830 F. Supp. at 909.

69    U.S. CONST. amend. I.

70    Turner Broadcasting Sys., Inc. v. FCC, 114 S. Ct. 2445, 2456 (1994) (citing

Leathers v. Medlock, 499 U.S. 439, 444 (1991); see also City of Los Angeles v.

Preferred Communications, Inc., 476 U.S. 488, 494 (1986) (holding that, where a

municipality had refused to lease utility pole space to respondent cable company, "the

activities in which respondent allegedly seeks to engage plainly implicate First

Amendment interests").

71    Ameritech Corp. v. United States, 867 F. Supp. 721, 729 (N.D. Ill. 1994).

72    A restriction that burdens speech according to its content, or that affects so

small a group of speakers as to be directed at the content of their speech, is

presumptively invalid and will be upheld only if it is "necessary to serve a

compelling state interest." R.A.V. v. City of St. Paul, 112 S. Ct. 2538, 2554 (1992)

(White, J., concurring).

73    Intermediate scrutiny is applied to regulations or restrictions on speech-

related conduct or on the time, place, or manner of speech. See Ameritech, 867 F.

Supp. at 729. The relevant standard is set forth in United States v. O'Brien, 391 U.S.

367, 377 (1968), which held that when a governmental regulation of conduct has an

incidental effect on speech the regulation will be upheld (1) if it is within the

constitutional power of the government; (2) if it furthers an important or substantial

governmental interest; (3) if the governmental interest is unrelated to the suppression

of free expression; and (4) if the burden on speech is no greater than is essential to

the furtherance of the governmental interest. Id. Governmental restrictions on time,

place, and manner of speech are valid so long as (1) they are content-neutral; (2) they

are narrowly tailored to serve a significant governmental interest; and (3) they leave

open ample alternative channels for communication of the information. Id. (citing


this Comment will discuss the strict scrutiny and rational basis

standards of review first because, in the view of the D.C.

Circuit, several district courts, and the author, those standards

do not apply to the regulation       in  question.   Finally, this

Comment explores the intermediate level of scrutiny and its

relation to 47 U.S.C. § 533(b).

A.     Strict Scrutiny Analysis

A restriction that burdens speech based on its content is

presumptively invalid and will be upheld only if it is "necessary

to serve a compelling state interest.",75    In other words, the

strict scrutiny standard applies to content-based regulations.

This is the First Amendment's most stringent standard and

"generally prevents government from proscribing speech, or

even expressive conduct, because of disapproval of the ideas

expressed.",76    As a result, content-based      restrictions  are

presumptively invalid and can only survive if they are necessary

to serve a compelling state interest.77

Parties that have taken the position that 47 U.S.C. §

533(b) is content-based and targets a special class of speaker

have argued that the statute is a presumptively invalid restriction

Ward v. Rock Against Racism, 491 U.S. 781, 791 (1989)); Clark v. Community for

Creative Non-Violence, 468 U.S. 288, 293 (1984); Graff v. City of Chicago, 9 F.3d

1309, 1319 (7th Cir. 1993), cert. denied, 114 S. Ct. 1837 (1994). "The O'Brien Test

is 'little, if any, different,' from the Ward test." Ward, 491 U.S. at 798.

74   "In an analysis akin to rational basis scrutiny, courts uphold regulations

affecting broadcast television if the regulations are a 'reasonable means' of promoting

a 'permissible' public interest, such as the interest [of] diversified mass

communications.” Id. (citing FCC v. National Citizens Comm. for Broadcasting, 436

U.S. 775, 796, 892 (1978)).

75   RA.V, 112 S. Ct. at 2542.

76   Chesapeake and Potomac Tel. Co. v. United States, 830 F. Supp. 909, 917

(E.D. Va. 1993) (citations omitted).

77    7,4



on free speech.7s While this argument has not been accepted

by several district and circuit courts, those same courts have

decided that Section 533(b) violates the First Amendment under

an intermediate scrutiny standard of review.79 The various

district and circuit courts that have held that 47 U.S.C. § 533(b)

violates the First Amendment agree that the statute is content-

neutral and fails to trigger strict scrutiny. However, these courts

differ in their reasons for finding Section 533(b) to be content-


1.     Is 47 U.S.C § 533(b) Content-Based?

It has been argued that Section 533(b) is content-based

because of the definition of video programming found in the

1992 Cable Act.80 “Video programming” is defined at 47

U.S.C. § 522(19) as “programming provided by, or generally

considered comparable to programming provided by, a

television broadcast station.”8′ The FCC has interpreted this

definition to require reference to what constituted broadcast

television programming in 1984.82 Several courts have agreed

that the content of the video programming offered by telephone

companies is implicated     by this forced   comparison.83    It

necessarily follows that, because Section 533(b) regulates

telephone company provision of video programming in their

78     Id; US West, Inc. v. United States, 855 F. Supp. 1184 (W.D. Wash. 1994);

GTE California, Inc. v. FCC, 39 F.3d 940 (9th Cir. 1994) (Nunan, J., dissenting);

Ameritech Corp. v. United States, 867 F. Supp. 721 (N.D. Ill. 1994).

79     See Chesapeake and Potomac, 830 F. Supp at 909; see US West, 855 F.

Supp. at 1184; see Ameritech Corp., 867 F. Supp. at 721.

80     “Video Programming” as stated in § 533(b) and defined in § 522(19) of the

Cable Act means “programming comparable to that provided by broadcast television

stations in 1984.” Video Dialtone Order, 7 F.C.C.R. at 5280.

SI     Video Dialtone Order, 7 F.C.C.R. 5781 ¶ 74.

82     See id

83     Id.

[Vol. 3:1


local service areas by referencing television programming as it

existed in 1984, the statute is not content-neutral. However, the

fact that Section 533(b) regulates video programming by

reference to its content does not mean that Section 533(b) must

be constitutionally reviewed under a strict scrutiny standard.

Government regulation of expressive conduct is not

always subject to strict scrutiny as long as it is justified without

reference to the content of the regulated speech.84 In fact, the

government's justification for enacting a speech restrictive

regulation is the controlling consideration when deciding

whether or not strict scrutiny is triggered.85     Therefore, a

government regulation that is not content-neutral may still

survive strict scrutiny so long as the government's justification

for curtailing free speech is unrelated to the suppression of free


For example, in 1986, the Supreme Court in Renton v.

Playtime Theaters decided that a municipal ordinance imposing

zoning limitations on the location of adult theaters did not

violate the First Amendment under a strict scrutiny test because

the ordinance was unrelated to the suppression of free

expression.87  Although the ordinance clearly focused on the

content of the films being shown at local theaters, it passed

strict scrutiny because the purpose of the ordinance was to help

prevent the harmful secondary effects associated with adult

theaters.18 The government and several cable operators have

adopted the Renton Court's reasoning in trying to establish that

Section 533(b) does not violate the First Amendment. To date,

84   Ward v. Rock Against Racism, 491 U.S. 781, 791 (1989).

85   Id.

86   Renton v. Playtime Theaters, Inc., 475 U.S. 41, 48 (1986).

87   1d.

98   Id. at 475 (noting that the ordinance has been justified as a means of

preventing various "secondary effects" of adult theaters such as crime, devaluation

of adjacent properties, and alienation of retail establishments).




only one court has accepted this argument.

Recently, the district court in Chesapeake and Potomac

Tel. Co. v. United States relied on the Supreme Court’s

reasoning in Renton in deciding that Section 533(b) survived

strict scrutiny even though it targeted a certain type of

speech.9° The government, in Chesapeake and Potomac,

asserted two justifications for Section 533(b)’s ban on cross-

ownership; namely, (1) to protect the “diversity of ownership of

communications outlets,” and (2) to promote “competition in the

video programming market.”91     The district court recognized

that the government’s two justifications for Section 533(b)’s ban

on cross-ownership were “unrelated to the suppression of free

expression . . . on the ground that the prevention of these

secondary effects will be advanced by the restriction.”’92 While

the district court in Chesapeake and Potomac used Renton to

allow Section 533(b) to escape strict scrutiny, the court has

suggested that Renton is an isolated decision and should only be

referenced in the context of sexually explicit speech.93

a.    Is Renton v. Playtime Theaters a Proper Standard to Use

in the Evaluation of Section 533(b)?

Renton remains the only case to date in which a majority

of the Supreme Court has found that the government’s asserted

content-neutral justification for a statute can overcome the fact

that the statute, on its face, draws a content-based distinction.

The Renton decision represents the notion that a legislative act

curtailing First Amendment rights is to be evaluated on its

89    Chesapeake and Potomac Tel. Co. v. United States, 830 F. Supp. 909 (E.D.

Va. 1993).

90    Id. at 924-25.

91    Id.

92    Id.

93    City of Cincinnati v. Discovery Network, 113 S. Ct. 1505 (1993).

[Vol. 3:1


justification rather than its operation.94 In essence, the Renton

decision seems to give legislatures an open door to restrict

disfavored speech as long as it can justify the limitation on free

speech, without reference to the speech.95 The Supreme Court

showed that it was aware of this problem in Boos v. Barry when

Justice Brennan stated in his concurring opinion that "the best

protection against governmental attempts to squelch opposition

has never lain in [the Supreme Court's] ability to assess the

purity of legislative motive but rather in the requirement that the

government act through content-neutral means that restrict

expression that government favors as well as expression it

disfavors.”96      Therefore,   “any    speech   restriction,  the

application of which depends on the message’s content, has

traditionally, and appropriately, been treated with suspicion by

the courts as a potential vehicle for the conscious or

unconscious prejudices of the legislature.”97        The Renton

standard will be satisfied as long as the government can justify

its reasons for restricting speech independent of the content of

that speech.

It has been argued that the Renton secondary effects

doctrine hinders the judiciary’s ability to strike down

content-based regulations and places too much faith in the

motives of lawmakers.98 For example, if legislators passed a

law limiting a certain type of speech that was disliked by the

94    Chesapeake and Potomac, 830 F. Supp. at 924.

95    See Geoffrey R. Stone, Content-Neutral Restrictions, 54 U. CHI. L. REv. 46


96    Boos v. Barry, 485 U.S. 312, 336-37 (1988) (Brennan, J., concurring).

97    Chesapeake and Potomac, 830 F. Supp. at 925.

99    See, e.g., id, (noting that the Renton “secondary effects” doctrine abandons

the “healthy mistrust” of the judiciary’s ability to detect content-based regulations’

distorting effects in favor of”a misplaced confidence that either: (a) legislatures will

always acknowledge any viewpoint distortion likely to result from a regulation or (b)

courts will consistently be able to predict which content-based regulations will be

devoid of distorting effects”).



majority of the population and then justified that restriction

without reference to the speech, the law would pass

constitutional muster.     It is unlikely   this approach    will

adequately protect First Amendment values because speech-

restrictive  laws  will   be  undetected    and, therefore,    go

unchallenged.99 The Supreme Court understands this problem

and can be expected to act with great caution when posed with

a Renton type of case.

In 1993, the Supreme Court had an opportunity to limit

the Renton decision to the context of sexually explicit speech

but declined to do so.°00 This means that the Renton analysis

can be used to justify content-based restriction on speech.

However, the Supreme Court seems to exercise discretion when

given the opportunity to use Renton to uphold a speech-

restrictive law. In Discovery Network, the Supreme Court

utilized the Renton analysis when it decided that a municipal

ordinance that banned newsracks purveying commercial

publications from being placed on public property violated the

First Amendment.”” Discovery Network is similar to Renton

and to Section 533(b) cases because the applicability of the

statute in question turned on a content-based      distinction.’02

However, the Supreme Court struck down the statute in

Discovery Network and distinguished it from Renton by stating,

“[i]n contrast to the speech at issue in Renton, there are no

secondary    effects  attributable  to  respondent    publishers’

99     Id; see also Boos, 485 U.S. at 336 (Brennan, J., concurring) (“[Tlhe

inherently ill-defined nature of the Renton analysis certainly exacerbates the risk that

many laws designed to suppress disfavored speech will go undetected.").

100  City of Cincinnati v. Discovery Network, 113 S. Ct. 1505 (1993).

101  Id.

102  See Chesapeake and Potomac, 830 F. Supp. at 925 ("In Discovery Network,

as in Renton and the present case, the applicability of the relevant ordinance turned

on a content-based distinction--in that case, between commercial and non-commercial

publications. Cincinnati attempted to rationalize its ordinance, as in Renton and the

present case, with content-neutral justifications--in that case, safety and aesthetics.").

[Vol. 3:1


newsracks that distinguish them from the newsracks Cincinnati

permits to   remain   on  its sidewalks."'°3    In essence, the

secondary effects the City of Cincinnati asserted to justify

squelching free speech were not adequate. Discovery Network

represents the notions that Renton is not limited to cases

involving sexually explicit speech and that the government's

justification for limiting free speech must be compelling for the

Court to restrict free speech. It is also important to note that

since Renton, the Supreme Court has not validated a speech-

restrictive statute under the secondary effects doctrine.

A plurality of Supreme Court justices have indicated a

willingness to apply the Renton secondary effects doctrine to

political speech.'04 The district court in Chesapeake and

Potomac read that willingness to mean that Renton should

generally  apply to Section    533(b) cases.'05    Therefore, if

Renton is applied to Section 533(b) cases, the two interests

advanced by the government in support of Section 533(b),

diversity in the ownership of communications outlets and

competition in the video programming market, are justifications

which are made "without reference to the content of the

regulated speech."'016  Thus, even if Section 533(b) is found

to be content-based, any Section 533(b) case that is analyzed

under a "Renton-like" secondary effects test will, more likely

than not, pass constitutional muster.'07

103  Discovery Network, 113 S. Ct. at 1517.

104  Boos, 485 U.S. at 312.

105  Chesapeake and Potomac, 830 F. Supp. at 926 ("This apparent general

applicability of Renton compels the holding here that § 533(b) is a content-neutral

restriction, despite the fact that the determination of whether the statute applies to any

particular message may only be accomplished by reference to the content of that


106  Id. (quoting Ward v. Rock Against Racism, 491 U.S. 781, 782 (1989)).

107  See, e.g., Chesapeake and Potomac Tel. Co. v. United States, 42 F.3d 181,

195 (4th Cir. 1994):

We determine whether a speech regulation partial to certain



[Vol. 3:1

2.     Is 47 U.S.C    § 533(b) Content-Neutral?

Section 533(b) will only be subject to strict scrutiny if it

regulates speech based on its content. The Fourth and Ninth

Circuits looked to the Supreme Court's recent decision in

Turner Broadcasting v. FCC to determine whether or not

Section   533(b) is content-neutral.108        The   Court noted     in

Turner     that    the    principal     inquiry     in   determining

content-neutrality "is whether the government has adopted a

regulation of speech because of [agreement or] disagreement

with   the  message    it conveys.”’09      To   determine    content-

neutrality, the Turner Court provided a two-pronged test which

provided that one first consider the suspect statute’s design, then

look to its operation.”l

speakers is content-based mindful of the “physical characteristics”

and “economic incentives” inherent to the particular type of speech

regulated. Here . . . the FCC and Congress have regulated the

telephone companies’ provision of cable service in light of the

physical “bottleneck,” peculiar to cable communications, and the

perception that the telephone companies, absent regulation, would

have the incentive and ability to dominate that bottleneck and

establish themselves as sole “gatekeeper[s]” . . . thereof. Because

Section 533(b) ‘s speaker distinction is thus justifiable entirely on

the basis of the peculiar economic and physical venue inherent to

cable communications, we conclude that it is not an improper

content-based distinction.

(citations omitted) (emphasis added).

108   Id at 192; US West, Inc. v. United States, 48 F.3d 1092, 1097 (9th Cir.


109   Turner Broadcasting Sys., Inc. v. FCC, 114 S. Ct. 2445, 2459 (1994)

(quoting Ward, 491 U.S. at 791).

110   Chesapeake and Potomac, 42 F.3d at 193 (citing Turner Broadcasting Sys.,

Inc., 114 S. Ct. at 2459-61) (The court in Chesapeake and Potomac read Turner

Broadcasting Sys., Inc. to instruct that it must first “examine the plain terms of the

regulation to see whether, on its face, the regulation confers benefits or imposes

burdens based upon the content of the speech it regulates,” and second, “[i]f the

regulation’s plain language does not, itself, mandate a finding of content

discrimination, [they] then must determine whether, nevertheless there are indications



Section 533(b) prohibits telephone companies from

directly providing video programming to customers in their

local telephone service areas.”‘ As discussed earlier, the FCC

has defined video programming as broadcast television

programming as it existed in 1984.112 Based on the definition

of video programming, the district court in Chesapeake and

Potomac decided that “Section 533(b) regulated speech

differently according to its content because the determination of

whether ‘video programming’ is being provided requires

reference to the content of the programming.”‘”13          However,

the circuit court in Chesapeake and Potomac and the district

court in Ameritech Corp. v. United States disagreed with the

Turner court and decided that Section 533(b) is content-neutral

because it regulates the manner in which speech may be

delivered rather than the content of the speech.”4

that the regulation’s ‘manifest purpose is to regulate speech because of the message

it conveys.”‘); see also US West, 48 F.3d at 1099.

III  See 47 U.S.C. § 533(b).

112  See 47 U.S.C. § 522(19).

113 Chesapeake and Potomac, 42 F.3d at 193; see also Chesapeake and Potomac

Tel. Co. v. United States, 830 F. Supp. 909, 923 (E.D. Va. 1993) (The district court

based its decision on the notion “that the cognitive process necessary to apply the

video programming definition cannot be accomplished without comparing the content

of the image being tested with the content of 1984 broadcast television programming.

… [T]here is simply no way that § 533(b), incorporating as it does the § 522(19)

definition, can be applied without reference to the content of the message being


14   See Chesapeake and Potomac, 42 F.3d at 193 (“While a content-based

distinction necessarily involves consideration of the nature of the message sought to

be conveyed, the converse is not true in all cases, i.e., that a regulation requires some

examination of the speech upon which it has impact does not make the regulation

content-based. In particular, the government may validly examine the mode of

delivery of speech to determine whether it is delivered in conformity with a ‘manner’

restriction, provided that the restriction does not discriminate based upon the content

of speech.”); see also Ameritech Corp. v. United States, 867 F. Supp. 721, 732 (N.D.

I11. 1994).


a.    Section 533(b) Regulates the Manner in Which Speech

May be Conveyed and Not the Speech Itself

In Regan v. Time, Inc., the Supreme Court upheld the

validity of a statute that regulated the size and color of

permissible copying of United States currency.”5   The Court

concluded that the size and color restrictions did not

discriminate based on speech content. Time’s compliance with

the size and color requirements did not in any way prevent them

“from expressing any view on any subject or from using

illustrations of currency in expressing those views.  More

importantly, the Government does not need to evaluate the

nature of the message being imparted in order to enforce the

color and size limitations.”‘”16 The limitations imposed by the

relevant statute in Regan only restrict the manner by which the

illustrations may be presented and not the content of the

message being conveyed. The court upheld the color and size

restrictions, analogizing them to valid noise level restrictions

that can be placed on announcements in residential areas and

size and height limitations that can be placed on outdoor


The circuit court in Chesapeake and Potomac referenced

the Supreme Court’s decision in Regan to establish Section

533(b) as content-neutral.”‘ The Fourth Circuit came to that

conclusion because they determined that Section 533(b) does not

regulate speech differently based upon its content, but rather

distinguishes speech solely based on whether the speech is in the

form of video programming, that is, based on the speech’s mode

115   Regan v. Time, Inc., 468 U.S. 641 (1984), superseded by statute as stated

in Boggs v. Bowron, 842 F. Supp. 542 (D.D.C. 1993).

116   Regan, 468 U.S. at 655-56.

17    Chesapeake and Potomac, 42 F.3d at 194 (citing Regan, 468 U.S. at 656).

118  i.4

[Vol. 3:1


of delivery."9    In other words, Section      533(b) is content-

neutral because the government need not "evaluate the nature of

the message being imparted" to determine whether "video

programming is being transmitted."'20

In a second case, rather than justifying the suppression of

free speech, the court in Ameritech Corp v. United States

decided that Section 533(b) was content-neutral by the FCC's

own distinction between one-way video programming and

interactive programming."' In determining content-neutrality,

the Ameritech court looked to the Supreme Court's decision in

Ward v. Rock Against Racism for guidance.'22 In Ward, the

Supreme     Court   stated  that   "[t]he  principal   inquiry   in

determining content-neutrality, in speech cases generally and in

time, place, or manner cases in particular, is whether the

government has adopted a regulation of speech because of

disagreement with the message it conveys.”’123

The    court   in  Ameritech    recognized    that  a   key

characteristic of broadcast television as it existed in 1984 was

that it was a one-way transmission.124    In 1984, the television

119  Id; see also Ameritech Corp. v. United States, 867 F. Supp. 721, 732 (N.D.

I11. 1994) (“There can be no doubt that interactive programming is a form of

communication or mode of expression of ideas, but as such it differs from

noninteractive video only in the form or manner of speech, rather than in


120  Chesapeake and Potomac, 42 F.3d. at 194-95 (citing Regan, 468 U.S. at

656); see Turner Broadcasting Sys., Inc. v. FCC, 114 S. Ct. 2445, 2460 (1994)

(finding that the “must-carry” rules are not content-based because they “distinguish

between speakers in the television programming market . .. based only upon the

manner in which speakers transmit their messages, and not upon the messages they

carry” (emphasis added)); cf City of Cincinnati v. Discovery Network, Inc., 113 S.

Ct. 1505, 1516 (1993) (holding that a sweeping ban on newsracks’ use to distribute

commercial handbills, but not newspapers, is content-based).

121  Ameritech, 867 F. Supp. at 732.

122  Id.

123  Ward v. Rock Against Racism, 491 U.S. 781, 791 (1989).

124  Ameritech, 867 F. Supp. at 731 (citing Video Dialtone Order, 7 F.C.C.R.

5781, 5821 (1992)).



viewer could not manipulate or interact with the video

image.”25 In its Video Dialtone Order, the FCC deemed

interactive programming to be something other than video

programming, because it was not comparable to the one-way

programming broadcast television stations provided in 1984.126

The FCC went on to explain that “two-way” or “interactive

programming” allows the viewer to “tailor the video images to

his or her specific requests.”’127 Based on this information, the

Ameritech court, unlike the district court in Chesapeake and

Potomac, decided that it did not need to look to video

programming as it existed in 1984 to determine whether Section

533(b) is content-based.’28      Instead, the Ameritech     court

decided that it must determine whether the FCC’s distinction

between interactive and non-interactive video programming is


According to the Ameritech court, the proper means to

determine if the above distinction is content-based is whether

the distinction favors some speech over another based on the

ideas or views expressed.’31    Therefore, the Ameritech court

decided that the distinction is content-neutral because non-

interactive and interactive video differ only in form and not

125  Ameritech, 867 F. Supp. at 732.

126  Id.

127  Id But see Video Dialtone Order, 7 F.C.C.R. at 5821. The FCC added the

caveat that some elements of “interactive programming” might be deemed video

programming if those elements could be separated from the interactive package and

provided independently as programming comparable to television programming in


128  Ameritech, 867 F. Supp. at 732-33.

129  Id at 732.

130  Id. (citing Turner Broadcasting Sys., Inc. v. FCC, 114 S. Ct 2445, 2459

(1994)); see also Ward v. Rock Against Racism, 491 U.S. 781, 791 (1989) (“The

principal inquiry in determining content-neutrality, in speech cases generally, and in

time, place or manner cases in particular, is whether the government has adopted a

regulation of speech because of disagreement with the message it conveys.”).

[Vol. 3:1



substance.'3' The court stated that its decision would have

been different if Section 533(b) allowed only certain types of

video programming to be broadcast by local telephone

companies.132    Therefore, a statute such as Section 533(b) that

prohibits telephone companies from directly providing any video

programming is a blanket prohibition on the method by which

speech may be transmitted and not on the ideas or views

expressed by that transmission.133       Accordingly, under both

the circuit court's decision in Chesapeake and Potomac and the

district court's decision in Ameritech, Section 533(b) is content-

neutral and, therefore, not subject to strict scrutiny.

3.     47 U.S.C. § 533(b) Distinguishes Between Speakers

It has been argued that because Section 533(b) affects a

small number of speakers by targeting telephone companies, it

should be subject to strict scrutiny. 134   The Supreme Court's

recent decisions only support the above assertion if a distinction

131  Ameritech, 867 F. Supp. at 732, which states:

There can be no doubt that interactive programming is a form of

communication or mode of expression of ideas, but as such it

differs from noninteractive video only in the form or manner of

speech, rather than in substance.  For example, if a local

government told people they could not shout messages through a

bullhorn in residential neighborhoods but could broadcast them on

the radio or television, this rule would not be a content-based

restriction, even though it distinguishes among modes of

communication. But if our hypothetical local government told

people they could not read John Steinbeck or Nelson Algren novels

aloud over the megaphone, but could convey any other message,

this would be a content-based distinction subject to strict scrutiny.

132  Id. at 733.

133  See, e.g., Chesapeake and Potomac Tel. Co. v. United States, 42 F.3d 181,

193 (4th Cir. 1994) ("Because Section 533(b) prohibits telephone company provision

of video programming [in local service areas] regardless of the message it conveys,

the burden it imposes on common carriers is not content-based.”).

134  Ameritech, 867 F. Supp. at 733.


between speakers “is directed at, or presents the danger of

suppressing  particular  ideas.”’135  Thus, in   Leathers   v.

Meadlock, the Supreme Court rejected a First Amendment

challenge to a state tax on cable operators, where the tax was

content-neutral and did not suggest an attempt to censor the

cable  operators or stifle  the  free  exchange   of ideas.136

Furthermore, in Turner Broadcasting, the Supreme Court noted

that the 1992 Cable Act’s “must carry” provisions favored

broadcasters over cable operators but did so “based only upon

the manner in which the speakers transmit their messages to

viewers, and not upon the messages they carry. …. So long as

[the provisions] are not a subtle means of exercising a content

preference, speaker distinctions of this nature are not presumed

invalid under the First Amendment.””3  Section 533(b) favors

cable operators by prohibiting telephone companies from

directly providing video programming to their telephone

customers in their local service     area.138  However, the

Supreme Court’s decision in Turner Broadcasting suggests that

Section 533(b) would survive strict scrutiny because it only

strives to regulate the manner in which speech is transmitted,

not the content.139 Consequently, the fact that Section 533(b)

targets telephone companies, alone, is immaterial, and therefore

insufficient to trigger strict scrutiny.

135  See Leathers v. Medlock, 499 U.S. 439, 452-53 (1991); see also Turner

Broadcasting Sys., Inc. v. FCC, 114 S. Ct. 2445 (1994).

136  Leathers, 499 U.S. at 453.

137  Turner Broadcasting Sys., Inc., 114 S. Ct. at 2460-61.

“3    Ameritech, 867 F. Supp. at 733.

139  Turner Broadcasting Sys., Inc., 114 S. Ct. at 2460-61.

[Vol. 3:1


4.     Does it Matter Whether 47 U.S.C § 533(b) is

Content-Based or Content-Neutral?

If Section 533(b) is determined to be content-based, it

will still pass muster. Renton's secondary effects doctrine will

shield Section 533(b) from a strict scrutiny level of review.140

Alternatively, since Section 533(b) will likely be found content-

neutral,14'  a  review   of  Section   533(b)'s   constitutionality

should focus on either the rational basis test or the intermediate

or heightened scrutiny level of review.142

B.     Rational Basis Analysis

Courts have been reluctant to apply the least stringent

standard of scrutiny, rational basis, when dealing with a 47

U.S.C. §     533(b) challenge.43       The   Supreme    Court has

employed a rational basis test in cases involving the regulation

of over-the-air broadcasting;'" however, the Court recently

ruled   that "broadcast cases"145    are  not applicable    to  the

140  See supra part III.A.1.

141  See supra part III.A.2.

142  See infra part III.C.

143  Ameritech Corp. v. United States, 867 F. Supp. 721, 729 (N.D. I11. 1994).

144  Id., citing FCC v. National Citizens Comm. for Broadcasting, 436 U.S. 775,

798-802 (1977):

In NCCB, the Court rejected a First Amendment challenge to an

FCC rule barring newspapers from owning broadcast stations in the

same community, reasoning that the rule was content-neutral and

served a reasonable means of promoting a "permissible"

governmental interest--the diversification of ownership in the mass

communications media as a whole.

145  See, e.g., FCC v. League of Women Voters, 468 U.S. 364, 377 (1984); see

Red Lion Broadcasting Co. v. FCC, 395 U.S. 367, 388-89 (1969); see National

Broadcasting Co. v. United States, 319 U.S. 190, 226 (1943).



regulation  of cable television.146     The distinction   between

cable regulations and over-the-air regulations rests on the idea

of scarcity. With over-the-air broadcasting, there are a limited

number of broadcast stations, and the government should be

given more leeway to regulate broadcast communications to

ensure that a few speakers do not gain a disproportionate hold

over the medium    as a whole.'47   The technology behind cable

television has brought with it the notion that there "is no

practical limitation on the number of speakers who may use the

cable medium."'148      Therefore, the scarcity    argument that

triggers rational basis scrutiny in the broadcast cases is

inapplicable in cable programming regulation cases.

It has been suggested, however, that the scarcity rationale

is analogous to the theory behind 47 U.S.C. § 533(b).'49 The

goal of 47 U.S.C. § 533(b) is to promote competition and to

diversify ownership in the cable television industry by

preventing the telephone companies from monopolizing it.15°

Even if the cable television industry is free from the same

physical limitations of broadcasting, cable television may still be

susceptible to market forces, such as monopolization, that can

lead to similar undesirable results.'5' However, the Supreme

Court has made it clear that market dysfunction was not at the

146  See Turner Broadcasting Sys., Inc. v. FCC, 114 S. Ct. 2445, 2456-57 (1994)

(employing intermediate level scrutiny when refusing to apply NCCB and other cases

involving over-the-air broadcasting to a situation involving cable television).

147  See Ameritech Corp. v. United States, 867 F. Supp. 721, 730 (N.D. Ill.

1994) ("In light of this physical scarcity, Government allocation and regulation of

broadcast frequencies are essential, as we have often recognized .... Being forced

to 'choose among applicants for the same facilities,' the Commission has chosen on

a 'sensible basis,' one designed to further, rather than contravene, the 'system of

freedom of expression."' (quoting FCC v. National Citizens Comm. for Broadcasting,

436 U.S. at 779, 802).

148  Turner Broadcasting Sys., Inc., 114 S. Ct. at 2457.

149  See Ameritech, 867 F. Supp. at 731.

150  Id

151  Id.

[Vol. 3:1


root of broadcast regulation cases and as such, the Court has

specifically refused to extend the broadcast cases to cable

television.'2    This  refusal  comes   despite  the  Court's

acknowledgment that the cable market is plagued by a

disfunction similiar to the one prevalent in the over-the-air

broadcast market.'53 "[T]he mere assertion of dysfunction or

failure in a speech market, without more, is not sufficient to

shield a speech regulation from the First Amendment standards

applicable to non-broadcast media.”’54 Therefore, regulations

on speech such as 47 U.S.C. § 533(b) cannot be justified under

a rational basis standard and must be analyzed under heightened


C.     Intermediate Level Scrutiny Analysis

In its decision in Turner Broadcasting, the Supreme

Court stated that where a law imposes “special obligations” or

“special burdens” upon cable programmers, a “heightened”

measure    of  First  Amendment     scrutiny   is  required.”‘

Accordingly, because the 1992 Cable Act’s “must carry”

provisions placed a special burden on cable programmers, it

necessarily follows that 47 U.S.C. § 533(b) places a special

burden on telephone companies because it prohibits them from

directly providing video programming to their local telephone

customers.156  Therefore, Section 533(b) will be subject to

intermediate scrutiny and pass constitutional muster if “[(1)] it

furthers an important or substantial governmental interest; [(2)]

152  See id; see also Turner Broadcasting Sys., Inc., 114 S. Ct. at 2457-58.

153  Turner Broadcasting Sys., Inc., 114 S. Ct. at 2458.

154  Id.

155  Id.

156  Ameritech, 867 F. Supp. at 731; see, e.g., US West, Inc., v. United States,

855 F. Supp. 1184, 1190 (W.D. Wash. 1994); see Chesapeake and Potomac Tel. Co.

v. United States, 830 F. Supp. 909, 918-22 (E.D. Va. 1993).



the governmental interest is unrelated to the suppression of free

expression   [content-neutral];  and   [(3)]  if the   incidental

restriction on alleged First Amendment freedoms is no greater

than is essential to the furtherance of that interest.”’57   The

second prong is satisfied because Section 533(b) is content-

neutral; it regulates how telephone companies may or may not

participate  in  video  programming.”’5      This  section   will

concentrate on the first and third prongs of the O’Brien

standard, and will discuss whether 47 U.S.C § 533(b) furthers

a substantial governmental interest and if so, whether the statute

places no more restrictions on telephone companies than

necessary in furtherance of the substantial governmental interest.

1.     Substantial Governmental Interest

The rationale supporting Section 533(b) has diminished

over time.’59    Section  533(b) is in place to prevent the

telephone companies from engaging in monopolistic practices

against the cable industry and to maintain ownership diversity

in communications outlets. However, the same rationale that

was the impetus for Section 533(b) could very well support the

contention that it should be repealed. That contention is that

Section 533(b) promotes anti-competitive behavior on the part

of the cable television programmers by discouraging and, in

157  Turner Broadcasting Sys., Inc., 114 S. Ct at 2469 (quoting United States v.

O’Brien, 391 U.S. 367, 377 (1968)).

158  See supra section III.A.1.

159  See, e.g., supra part II. The history of § 533(b) illustrates how the

regulation was once very much needed and that as the cable television industry has

evolved into a virtual monopoly, how its original mandates may promote anti-

competitive results by sustaining the cable television industry’s monopoly while

prohibiting telephone companies from competing in the video programming market.

[Vol. 3:1



most cases, prohibiting competition          in local service areas.160

To decide whether there is a significant governmental interest,

a court “must look to the face of the [subject] regulation and the

identifiable interests advanced to justify the regulation.”’161 In

addition, the government, “when trenching on First Amendment

interests, … must be able to adduce either empirical support or

at least sound reasoning on behalf of its measures.”’162            On its

160   It has been shown in Section II of this Comment that the cable television

industry is present in most U.S. cities. It has also been shown that approximately

99% of all cable operators are in business in a single market with no competition.

This is probably the case because it would not be cost-effective to have two cable

companies compete in the same market and carry duplicative programming. In fact,

it is quite possible that if two cable companies compete in the same market, they

could cut each other’s business by half, but incur the same amount of overhead. This

would inevitably lead to higher cable television rates for consumers, which by no

means would benefit the cable operator or the consumer.

161   11126 Baltimore Blvd. v. Prince George’s County, MD., 886 F.2d 1415,

1426 (4th Cir. 1989), vacated on other grounds, 496 U.S. 901 (1990); see also Hart

Book Stores, Inc. v. Edmisten, 612 F.2d 821, 829 (4th Cir. 1979), cert. denied, 447

U.S. 929 (1980). But see, e.g., Turner Broadcasting Sys., Inc., 114 S. Ct. at 2471

(citations omitted), which states:

[C]ourts must accord substantial deference to the predictive

judgments of Congress.    Sound policymaking often requires

legislators to forecast future events and to anticipate the likely

impact of these events based on deductions and inferences for

which complete empirical support may be unavailable. …

[However,] [t]hat Congress’ predictive judgments are entitled to

substantial deference does not mean . . . that they are insulated

from meaningful judicial review altogether. [The Supreme Court

has] stressed in First Amendment cases that the deference afforded

to legislative findings does ‘not foreclose [their] independent

judgment of the facts bearing on an issue of constitutional law.’

• . [W]hen First Amendment rights are implicated[, the Supreme

Courts' obligation to exercise independent judgment] is not a

license to reweigh the evidence de novo, or to replace Congress’

factual predictions with [its] own. . . . [I]t is to assure that, in

formulating its judgments, Congress has drawn reasonable

inferences based on substantial evidence.

162   See 11126 Baltimore Blvd., 886 F.2d at 1426 (quoting Century

Communications Corp. v. FCC, 835 F.2d 292, 304 (D.C. Cir. 1987)).


face, 47 U.S.C. § 533(b) was enacted to achieve substantial

governmental interests — to promote competition in the video

programming market and to preserve diversity of ownership in

the communications media.163

“When an individual subscribes to cable, the physical

connection between the television set and the cable network

gives the cable operator bottleneck, or gatekeeper, control over

most, (if not all) of the television programming that is

channeled into the subscriber’s home. Hence, simply by virtue

of its ownership of the essential pathway for cable speech, a

cable operator can prevent its subscribers from obtaining access

to programming it chooses to exclude.”’164     The telephone

companies’ common carrier networks are the primary electronic

means of access to American homes and businesses other than

existing  coaxial cable   wiring   networks   used  by   cable

operators.165   As discussed   previously, the possibility  of

transmitting cable programming over these common carrier

networks is now a reality. Thus, the peculiar positioning of the

local telephone companies makes them natural competitors of

the cable operators.

In light of the telephone companies’ predatory past,

Congress’ past decision to ban telephone companies from

participating in video programming was a reasonable assumption

at the time 47 U.S.C. § 533(b) was originally enacted.

Presumably, Congress believed that this was still a valid interest

because it did not repeal Section 533(b) in 1992. Therefore, it

has been established that 47 U.S.C. § 533(b) comports to

163  See Chesapeake and Potomac Tel. Co. v. United States, 830 F. Supp. 909,

927 (E.D. Va. 1993) (The government is trying to prevent single ownership control

of all electronic communication devices entering and exiting a home.).

16     Chesapeake and Potomac Tel. Co. v. United States, 42 F.3d 181, 189 (4th

Cir. 1994) (citing Turner Broadcasting Sys., Inc., 114 S. Ct. at 2466).

165   Id. at 189-90.

[Vol. 3:1


achieve a substantial governmental interest.'66 The next issue

is whether the statute places no more restrictions on telephone

companies than necessary in furtherance of a substantial

governmental interest.167

2.     Is 47 U.S.C. § 533(b) More Restrictive Than Necessary

to Achieve the Government's Stated Substantial Interest?

Section 533(b) need not be the "least restrictive or least-

intrusive means" of achieving Congress' goal of eliminating

anti-competitive behavior and promoting diversity of ownership

in the area of video programming. 168       The requirement of

narrow tailoring is satisfied if the "regulation promotes a

substantial government interest that would be achieved less

effectively  absent the regulation."'169   The Supreme Court

explained that the regulation need not be the least severe that

will achieve the desired     end.   However, the presence of

numerous and obvious less-burdensome alternatives to the

restriction  is  a  relevant  consideration   in  assessing   the

reasonableness of the "fit" between the means and end.170

Therefore, "if there exists a range of regulatory strategies that

would effectively eliminate the threat of anti-competitive

behavior by the telephone companies in the cable television

industry, then § 533(b) would 'burden substantially more speech

than is necessary to further the government's legitimate

166  See Turner Broadcasting Sys., Inc., 114 S. Ct. at 2470 (citations omitted)

("[Tihe Government's interest in eliminating restraints on fair competition is always

substantial, even when the individuals or entities subject to particular regulations are

engaged in expressive activity protected by the First Amendment.").

167   See City of Cincinnati v. Discovery Network, 113 S. Ct. 1505, 1510(1993).

168  Chesapeake and Potomac, 830 F. Supp. at 928 (quoting Ward v. Rock

Against Racism, 491 U.S. 781, 796-99 (1989)).

169  Id (citations ommitted).

170  Discovery Network, 113 S. Ct at 1510 n.13 (citations omitted) (quoting

Board of Trustees v. Fox, 492 U.S. 469, 480 (1989)).



[Vol. 3:1

interests,'    and    would      therefore     violate    the    First


Any findings of fact Congress makes regarding the

potential effectiveness of the FCC's regulation of the pole

access   and    cross-subsidization    problems     are  entitled   to

considerable deference from the courts.'72 The legislative

record reflects that Section 533(b) "encourages a diversity of

ownership     of   communications      outlets"'73   and   "enhances

competition."'74    Section 533(b) almost certainly would have

passed constitutional muster when it was enacted in 1984. At

that time, the cable television industry as we know it today was

in its infancy. However, within the last ten years, the business

of cable television and video programming has changed both

technologically and economically.'75 Therefore, if ten years

171   Chesapeake and Potomac, 830 F. Supp. at 928.

172  Id at 929 (citing Columbia Broadcasting Sys., Inc. v. Democratic Nat'l

Comm., 412 U.S. 94, 103 (1973) (revealing, curiously, that there is no indication in

any legislative materials "that Congress reached a conclusion which discussed the

effectiveness of less restrictive regulatory measures to combat the potential for anti-

competitive practices by the telephone companies in the cable television market").

173  Id. (quoting H.R. REP. No. 934, 98th Cong., 2d Sess. 56 (1984), reprinted

in 1994 U.S.C.C.A.N. 4693).

174  Id. (quoting S. REP. No. 92, 102d Cong., 1st Sess. 18 (1991), reprinted in

1992 U.S.C.C.A.N. 1150).

175  See, e.g., id, at 915 (citations ommitted), which states:

Companies operating cable television systems have grown rapidly,

commensurate with the growth of the industry. According to the

Census Bureau, annual cable operator revenues were $345 million

in 1970. By 1992, annual revenues of the industry topped $21

billion. Many cable systems serving individual communities are

owned by large, national or regional chains known as multiple

system operators ("MSOs"). The five largest MSOs combined to

serve over 40% of all cable subscribers. The largest MSO, Tele-

Communications, Inc., served 9.6 million cable subscribers in 1991

and had revenues of $3.8 billion. The second largest, Time

Warner, had 6.8 million subscribers and total revenue from all

sources of $12 billion.

Despite Congressional efforts to promote competition in



later there are less speech intrusive means available to achieve

these stated goals, they must be examined.’76 It then logically

follows that Section 533(b) should be analyzed with reference

to conditions as they exist today.’77

As discussed earlier, several government agencies such as

the FCC, the Department of Justice’s Anti-trust Division, the

Department of Commerce, as well as several House and Senate

subcommittees, have formally recommended the repeal of

Section 533(b).’78 These agencies have suggested that Section

533(b) does not promote competition and ownership diversity in

cable television, and in fact, may actually hinder achievement

of those objectives.’79 Congress was apprised of all the

aforementioned recommendations, and nonetheless decided

neither to amend nor to repeal Section 533(b) from the 1992

Cable Act.

the cable industry, the provision of cable television has remained

a monopoly service in virtually every community. In 1991, cable

system operators faced competition from another operator in less

than 1% of the localities served by cable.

176   See supra part II.C; see also Chesapeake and Potomac Tel. Co., 830 F.

Supp. at 929 (“It cannot be law that, whenever Congress passes a statute infringing

on the right to free expression, it will be inferred by reviewing courts that Congress

considered and rejected the effectiveness of all less restrictive alternatives.”); see, e.g.,

Ameritech Corp. v. United States, 867 F. Supp. 721, 734 (N.D. Ill. 1994) (When a

statute’s constitutionality is predicated on a particular state of facts, that

constitutionality “may be challenged by showing to the court that those facts have

ceased to exist.” (quoting United States v. Carolene Prods. Co., 304 U.S. 144, 153

(1938) (citations omitted))).

177   See, e.g., Ameritech, 867 F. Supp. at 734 (“[T]he district court should

determine whether removal of the information-services restriction [in the AT&T

consent decree] as applied to the generation of information would be anti-competitive

under present market conditions.” (citing United States v. Western Elec. Co., 900

F.2d 283, 309 (D.C. Cir. 1990))); see also id. (“If, under present market conditions,

the statute places a greater burden on speech than is necessary to promote the goals

of competitiveness and diversity of ownership in the business of cable television or

video programming, the statute is not ‘narrowly tailored’ to promote those goals.”).

179   See supra part II.C.

179   Ameritech, 867 F. Supp. at 736.


Those that believe that Section 533(b) is narrowly

tailored argue that when Congress failed to repeal or amend it,

they implicitly validated the statute’s original concerns that

telephone companies will act anti-competitively if given the

chance. The Ninth Circuit “observed that because enhanced

competitiveness in the information service markets into which

the telephone companies wished to enter ‘does nothing’ to

decrease their monopoly power in the local telephone market,

‘we fail to see how it can diminish the [telephone companies']

ability to shift costs to their regulated services without detection

in ratemaking proceedings.”’80 This argument is substantiated

by the initial case of United States v. Western Electric Co.181

Based on the fmding that the federal regulatory scheme would

not prevent cross-subsidization and network discrimination, the

court initially refused to lift the portion of the AT&T consent

decree concerning the ban on telephone company provision of

information services.’82 However, that decision was remanded

on the question of whether lifting the ban would be anti-

competitive   under existing   market conditions.’”3     With

considerable reluctance, the ban was ultimately lifted in

deference to the DOJ’s view that doing so would not be anti-

competitive.’84 The above progression represents the fact that

anti-competitive conduct by the telephone companies is a real

concern. However, a statute purporting to eliminate a certain

type of speech in order to prevent anti-competitive behavior and

promote ownership diversity, must do so in a way that does not

place a greater burden than necessary on protected speech.185

180  Id at 735 (citing California v. FCC, 905 F.2d 1217, 1234 (9th Cir. 1990)).

181  673 F. Supp. 525 (D.D.C. 1987).

182  Id. at 567-79.

183  United States v. Western Elec. Co., 900 F.2d 283, 309 (D.C. Cir. 1990).

184  United States v. Western Elec. Co., 767 F. Supp. 308, 327 (D.D.C. 1991),

aft’d, 993 F.2d 1572 (D.C. Cir.), cert. denied, 114 S. Ct. 487 (1993).

185   Ameritech, 867 F. Supp. at 736.

[Vol. 3:1


To sustain Section 533(b), the proponent must show that

less restrictive measures would be ineffective in restraining the

telephone    companies'     monopolistic    tendencies.186      The

government's biggest concern behind enacting Section 533(b)

was that telephone companies would cross-subsidize between

their common carrier telephone service and their video

programming      service, thereby     artificially lowering    cable

programming prices and eventually creating a local cable service

monopoly."i7 Section 533(b)'s flat ban on video programming

by telephone companies in their local service area was designed

to prevent this anti-competitive behavior. Is there a reasonable

fit between Section 533(b) and its stated goals, and if so, is it

narrowly tailored to achieve those goals?

Chesapeake & Potomac suggests "the potential for

telephone companies to act anti-competitively in the video

programming market can be reduced to a level significantly

below the level of risk currently tolerated in relation to cable

operators."'8       For    example,       the    FCC's      current

186  Id.

187  See, e.g., Chesapeake and Potomac Tel. Co. v. United States, 830 F. Supp.

909, 930 n.31 (E.D. Va. 1993), stating that:

Local telephone companies have a substantial opportunity to engage

in cross-subsidization when . . . both the competitive video

transmission service and the monopoly service are provided on

common facilities with common costs .... Common costs mean

that cross-subsidization is virtually impossible to detect and

eliminate. It is the existence of significant common costs which

differentiates telephone companies from [other potentially anti-

competitive actors]. . . . One of the most difficult aspects of

telephone regulation is the assignment of costs to their causes.

Cable and telephone systems share a certain amount of capital

equipment; allocating shared costs between these capital accounts

on the basis of actual cost causation will be difficult or impossible.

But see id. at 930 n.32 (“It is difficult to conceive that there could be any substantial

costs common to the transmission of video and other telephone signals, on the one

side, and the creation and packaging of video programming on the other.”).

188  Id. at 930.



recommendation to Congress for Section 533(b)’s repeal

requires a limit on telephone companyies’ direct provision of

video programming to a specified percentage of the channel

capacity made available by the companies’ video transport

facilities. The channel capacity balance would be leased on a

common carrier basis and the system would have to possess the

capability to accommodate multiple video programmers.’9

The FCC and DOJ have suggested that if telephone companies

are allowed to compete in the local cable programming markets,

the existing FCC accounting and cost allocation rules can help

to curb the threat of cross-subsidization by the telephone

companies.190 Accordingly, the required “fit” between Section

533(b)’s restrictions and its purported purpose of preventing

cross-subsidization is absent. The above stated scenarios seem

less restrictive than a prophylactic ban on telephone company

entry into the local video programming market.’9′

Section 533(b) is content-neutral and was originally

enacted to serve an important or substantial governmental

interest. Although it is only an incidental restriction on speech,

Section 533(b) violates of the First Amendment because its

restriction on protected speech is greater than is essential to

achieve the government’s significant interest.

189  Id. at 930-31 (citing Video Dialtone Order, 7 F.C.C.R. 5781, 5850 (1992)).

This regulatory scheme would take care of the diversity of programming and

ownership prong of the government’s substantial interest.

190  See supra note 13; see also supra part II.C.; see also, e.g., Video Dialtone

Order, 7 F.C.C.R. at 5828-29 (stating that “our existing safeguards with respect to

non regulated [telephone company] services are sufficient at this time to protect

against cross-subsidization concerns . . . . [W]e continue to believe that they

constitute an effective means of preventing cross-subsidization between regulated and

non regulated services”).

191  This conclusion assumes the suggested regulatory scheme can substantially

curtail the problem of cross-subsidization.

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An analysis of the evolution of Section 533(b) of the

1992 Cable Act leads one to believe that it should be repealed

or at least amended to facilitate those goals that inspired its

original adoption.    The very   agencies responsible for its

enforcement have suggested less restrictive ways to deal with

the problems of anti-competitive conduct and diversity of

ownership in the video programming industry. However, until

recently, Congress has been unwilling to repeal or amend the

statute.192  In 1995, during the 104th Congress, both the

House and Senate passed communications legislation that

eliminates Section 533(b). The communications legislation has

not yet been consolidated, but one bill is expected to be voted

on by Congress in November 1995.

The Supreme Court has granted certiorari on the issue of

whether Section 533(b) violates the First Amendment and will

likely hear oral arguments on the issue in December 1995. If

Congress fails to repeal or amend Section 533(b), the Supreme

Court will likely strike it down as violating the First

Amendment under a heightened scrutiny test, following the

mandates of Turner Broadcasting.193     In November of 1994,

the Fourth Circuit in Chesapeake and Potomac Telephone

Company of Virginia v. United States, analyzed Section 533(b)

under an intermediate level of scrutiny and found it violated the

192  Congress may have chosen not to repeal or amend § 533(b) because it was

concerned about the telephone companies' ability to cross-subsidize and eventually

use their financial strength to create another monopoly. However, Congress may

have been lobbied by the Cable Industry to keep § 533(b) in the Cable Act. We

simply do not know what Congress' motivations for deciding not to heed the

recommendations of the FCC, the Department of Justice, and their own subcommittee

reports and repeal or amend § 533(b).

193  Turner Broadcasting Sys., Inc., v. FCC, 114 S. Ct. 2445 (1994).



First Amendment.'94    These developments should alert both

the President and Congress of the necessity to pass a

telecommunications bill discarding 47 U.S.C. § 533(b) and

establishing reasonable safeguards in its place that prevent

telephone companies from unfairly competing via cross-

subsidization between local telephone and video programming

service. Otherwise, if the Supreme Court declares 47 U.S.C. §

533(b) unconstitutional, the regulatory safeguards necessary to

prevent cross-subsidization and to promote ownership diversity

among video programmers may not be provided.

The cable industry has argued that Section 533(b) is

narrowly tailored to facilitate the government's substantial

interest in a content-neutral manner that does not prevent

telephone companies from providing video programming

outright. Section 533(b) allows telephone companies to conduct

a minimal percentage of video programming to areas other than

those they serve with local telephone service, or in their own

locality through an unaffiliated media outlet. The court in

Ameritech Corporation v. FCC rejected this argument stating,

"that [the above] reasoning is akin to telling the Chicago

Tribune that it may distribute a newspaper everywhere but in

Chicago, or that its ability to communicate is not significantly

curtailed by its having to publish its news stories in other

publications.””19 Therefore, it is likely that Section 533(b) is

not a valid time, place, or manner restriction on speech.

Finally, it is interesting to note that the cable industry has

arguably developed into several local monopolies. In an attempt

194  Chesapeake and Potomac Tel. Co. v. United States, 42 F.3d 181 (4th Cir.


195  Ameritech Corp. v. United States, 867 F. Supp. 721, 737 (N.D. Il1. 1994)

(citing Southeastern Promotions v. Conrad, 420 U.S. 546, 556 (1975) (“‘[O]ne is not

to have the exercise of his liberty of expression in appropriate places abridged on the

plea that it may be exercised in some other place.”‘ (quoting Schneider v. State, 308

U.S. 147, 163 (1939)))).

[Vol. 3:1


to preserve the cable industry’s monopolistic posture in modern-

day cable broadcasting, Turner Broadcasting challenged the

constitutionality of the “must carry” provision of the 1992 Cable

Act, arguing that the provision was not narrowly tailored to

achieve a substantial or important governmental interest. The

Supreme Court only ruled that the “must carry” provision be

analyzed under the O’Brien intermediate scrutiny standard. The

cable industry is now using the same First Amendment

arguments television broadcasters were utilizing against them in

an attempt to uphold Section 533(b) of the Cable Act.

If appearances hold true, the cable television industry has

grown fond of its virtual monopoly over local video

programming and is reluctant to give it up. It argues that it

should not be compelled to carry local network television

broadcasters because that violates its First Amendment rights,

but then advocate violation of telephone companies’ First

Amendment rights because those companies would have an

unfair advantage in competition. The FCC has stated that it

believes it can prevent cross-subsidization and promote diversity

of ownership among video programmers if telephone companies

are allowed to compete.196   Furthermore, there is no valid

reason to prefer one form of monopoly over the other. If

Congress’ true goals are to promote competition and encourage

ownership diversity, it should repeal Section 533(b) before the

Supreme Court does to ensure that these goals are met.

196  See Video Dialtone Order, 7 F.C.C.R. 5781, 5847 (1992).