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Religious Technology Center v. Netcom On-Line Communication Servs., Inc., 907 F. Supp. 1361 (N.D. Cal. 1995).
Factual Background Edit
The Religious Technology Center (RTC), an affiliate of the Church of Scientology sued Dennis Erlich, a former Scientology Minister who had allegedly posted copyrighted and confidential church materials on the Internet. Plaintiff also named the California bulletin board service ("BBS") on which the statements were published and Netcom On-Line Services, one of the largest providers of Internet access in the United States and the service through which the BBS accessed the Internet. RTC sued Netcom for both direct and indirect copyright infringement.
Trial Court Proceedings Edit
Direct Infringement Edit
Judge Whyte granted the BBS' and Netcom's motions for summary judgment on the issue of direct infringement of plaintiff's reproduction right because the actual copies made by their computers were not caused by any volitional acts on the part of Netcom or the BBS, but rather by Ehrlich's posting. Before RTC provided notice to Netcom about the possibility of its system containing infringing materials, Netcom did not know about the alleged infringements. For the court to impose liability on such facts would have constituted a form of “strict” liability in the conventional sense — liability without knowledge or fault. Instead, the court refused to impose direct infringement liability at all, noting instead that
- the mere fact that [defendant] Netcom's system incidentally makes temporary copies of plaintiffs' works does not mean Netcom has caused the copying. The court believes that Netcom's act of designing or implementing a system that automatically and uniformly creates temporary copies of all data sent through it is not unlike that of the owner of a copying machine who lets the public make copies with it. Although some of the people using the machine may directly infringe copyrights, courts analyze the machine owner's liability under the rubric of contributory infringement, not direct infringement.
The court also rejected the argument that the storage of the works on Netcom's system for up to eleven days violated the plaintiffs' right to publicly distribute and display their works. The court found that there were the same causation and volition problems that infected the reproduction claim. The actions of the system provider were automatic and indiscriminate.  Moreover, the court pointed to the fact that Netcom did not maintain an archive of files for its users, thus it could not be said to be supplying a product to users. This contrasted with some of its competitors that created or controlled content available to their subscribers. The failure to establish any violation of the plaintiffs' reproduction, distribution or display rights by Netcom thus defeated plaintiffs' direct infringement theory.
Vicarious Infringement Edit
In addition, the court found that neither defendant was liable for vicarious infringement. Although plaintiff had raised a triable issue of fact with regard to the right and ability to control as to both defendants, it failed to show that Netcom enjoyed a direct financial benefit as a result of the infringement, and failed to plead that the BBS did.
Contributory Infringement Edit
The Court denied defendants' motions for summary judgment, however, on the contributory infringement claims finding that plaintiff had raised a triable issue of fact as to: (1) whether Netcom and the BBS knew or should have known Erlich was infringing plaintiff's copyrights after receiving a letter from plaintiff and if so, (2) whether defendants substantially participated in the infringement after receiving notice, and (3) whether defendants have a valid fair use defense.