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The General Economic and Technological Situation in Malaysia Today
The issue: Copyright Liability of Online and Internet Service Providers
Cyberspace-Law Seminar
Prof. Nicholas Johnson
Spring 1997
Final Draft
© Alexander Klett 1997 All rights reserved
This paper examines some of the legal implications of setting up an online service provider in Malaysia.
The proposal for the imaginary corporation called Global Telecommunications, Media and Electronics, Inc. is to set up a company called “Malaysiaserve Online, Inc.“ which will offer both an online service with content provided by the company itself and access to the global Internet.
The legal questions to be examined in this context concern the copyright liability of online and Internet service providers in Malaysia and the U.S.
1.) Some general and economic facts about Malaysia:
Malaysia, with its territory of 329,750 sq km -- more than twice the size of Iowa -- has a population of almost 20 million people of which 59 % are Malays, 32 % are Chinese and 9 % are Indian. It has a very young population; 37 % of Malaysians are under 15 years of age.[1] Malaysia is one of the southeast Asian nations which try very hard (and sucessfully so) to utilize new technology generally and to attract foreign investment. This has now become true for all kinds of cyberspace technology as well.
Between 1988 and 1994 the average annual growth rate of the Malaysian economy was 9 %. In 1994 the GDP was $ 166.8 billion, which is a per capita GDP of $ 8,650. Industrial production increased 12% in 1994.[2]
2.) Malaysia and the Internet:
As far as the Internet is concerned, the Malaysian Government is no longer taking the position it took until late 1996. In the fall of 1996 the official Government position was that Internet content needed to be filtered to ensure that none of it contravened “Malaysian culture, policy and religion.“[3] Within just four months this position has changed completely. The Prime Minister stated in mid-January that censorship was difficult, since it would not only be inefficient but also erroneous. To illustrate this he gave the example of blocking every Internet site containing “sex,“ which would lead to items on Essex and Middlesex being censored.[4]
The Malaysian government now believes that, despite some negative aspects, modern communications including the Internet can be good for this mainly Islamic nation. The Deputy Prime Minister said recently: “Through the Internet, we can find Islamic homepages, whole verses of Al-Quran and their interpretations, all of Shakespeare’s literary works and vast amounts of other information.“[5]
3.) Some recent Cyberspace developments in Malaysia:
a) The Malaysian Government now actively promotes Cyberspace technology. Malaysia is currently creating a kind of Asian Mini-Silicon Valley called the Multimedia Super Corridor (MSC), which measures 50 by 15 km (about 290 sq miles), and encompasses the centre of Kuala Lumpur and the new international airport which will be built in Sepang outside of Kuala Lumpur.[6] The MSC is intended to consist of the following: electronic government, telemedicine, a worldwide manufacturing web, a borderless marketing centre, research and development clusters and a multimedia funds haven.[7] The advisory panel consists of representatives of some of the most important multinational hi-tech companies.[8] According to the latest reports, companies have started applying for permission to set up businesses in the MSC area. Twelve major companies have been accepted so far.[9]
b) On the legal side, a new set of cyberlaws has been drafted and now awaits submission to the Prime Minister. This includes a Digital Signature Act, a Multimedia Intellectual Property Protection Act and a Computer Crime Act.[10]
c) Malaysia’s link to eight Asian countries with a 11,840 km (7,400 m) submarine telecommunications cable was completed on January 9, 1997. This cable can handle 786,240 simultaneous telephone calls and it is vital for the MSC.[11]
d) Both AltaVista <http://altavista.digital.com> and Yahoo! <http://www.yahoo.com> are establishing mirror sites for their guides and search engines in Malaysia to provide faster responses to search requests from users in Malaysia.[12]
These are just some examples of the “Cyberspace events“ taking place in Malaysia at the moment.
1.) Introduction to the problem:
Since the Internet[13] has become a widely popular medium for communication and information, a wide range of legal problems created by this network of networks have begun to arise. The legal implications are by no means restricted to copyright law; almost every area of the law is in some way affected by the Internet.[14] However, since the Internet serves to transmit text, photos, sound and video clips (and soon entire movies)[15] copyright implications seem obvious. This paper will address the question of whether and how online and Internet service providers are liable under existing copyright law for infringement by third parties using their online or Internet access service.
2.) The situation in the U.S.:
Creators of literary and artistic works in the U.S. are protected under the federal Copyright Act of 1976[16] (“the Act“) which replaced the old act of 1909.[17] The constitutional basis for the Copyright Act is Art. I, sec. 8, cl. 8 of the U.S. Constitution, giving Congress the power to “promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.“[18] While the terms “copyrights“ and “patents“ are not mentioned, both forms of intellectual property are covered by this constitutional clause.[19]
Section 106 of the Act <http://www.law.cornell.edu/uscode/17/106.html> gives the copyright owner the exclusive rights to reproduce the work, to prepare derivative works from it, to distribute copies to the public, to perform the work publicly, to display the work publicly and, for sound recordings, to perform the work publicly through a digital audio transmission. Since this analysis is going to be based on statutory interpretation, and since the rights enumerated in § 106 of the Act overlap somewhat, it should be pointed out that one infringing act might violate one or more of the exclusive rights of the copyright owner protected under § 106 of the Act. For an action to constitute infringement, however, it is obviously not necessary to violate more than one single exclusive right.
Furthermore, § 106 A of the Act <http://www.law.cornell.edu/uscode/17/106a.html> grants rights to attribution and integrity, limited, however, to authors of works of visual art.[20] These exclusive rights are not unlimited. There are important limitations to them in §§ 107-120 of the Act, the most important of which is the “fair use“ provision in § 107, which permits the use of copyrighted material within certain limits and under certain circumstances.
With regard to the Internet, and especially the question of copyright liability of service providers, the situations which need to be examined are the following:
• A subscriber uploads copyrighted material onto his or her homepage located at the service provider’s server.
• A third person downloads copyrighted material from the server after it was stored there by one of the service provider’s customers.
• The service provider stores copyrighted material on its Web site, or as content of its online service.
• One of the service provider’s customers downloads copyrighted material from the Internet.
a) Uploading copyrighted material onto Web sites: As part of the usual contract between a service provider and its users, a user may maintain a “home page“ on the service provider’s server. Suppose the user then uploads copyrighted material, the copyright to which she does not own, onto her “home page“ without authorization from the copyright owner. According to § 501 (a) of the Act <http://www.law.cornell.edu/uscode/17/501.html> infringement of a copyright requires violation of one of the exclusive rights of the copyright owner as protected in §§ 106-118 of the Act. United States courts generally rephrase this by saying that a successful infringement claim requires proof of ownership of copyright and copying.[21]
aa) Section 106 (1) of the Act <http://www.law.cornell.edu/uscode/17/106.html> gives the copyright owner the exclusive right to reproduce the copyrighted work “in copies.“ In order to be directly liable under this provision the service provider must have reproduced the work in a copy. Section 101 of the Act <http://www.law.cornell.edu/uscode/17/101.html> defines “copies“ as material objects in which a work is fixed by any method and from which the work can be perceived, reproduced or otherwise communicated directly or indirectly. And a work is “fixed,“ according to § 101 of the Act <http://www.law.cornell.edu/uscode/17/101.html>, when it is sufficiently permanent or stable to permit it to be perceived, reproduced or otherwise communicated for a period of more than transitory duration. While live TV braodcasts are thus not “fixed“ according to § 101, the way to get copyright protection for them under the definition in § 101 is to make sure that the broadcast is being recorded simultaneously with the transmission.[22]
As far as copying in connection with computers is concerned, U.S. courts have at least recently been very strict. Since the decision in MAI v. Peak[23] U.S. courts have consistently held that the mere loading of software into RAM is a “fixation“ of the work and thus a “reproduction“ under the Act.[24] The report by the National Commission on New Technological Uses of Copyrighted Works (CONTU), which had been set up by Congress to analyse the copyright implications of the use of computers and photocopiers and to make legislative suggestions, headed in this direction as well.[25] Likewise the report by President Clinton’s Information Infrastructure Task Force (IITF), the so-called NII White Paper[26], which was also intended to make recommendations for legislative change, states in very clear words that “[i]t has long been clear under U.S. law that the placement of copyrighted material into a computer’s memory is a reproduction.“[27] As Litman[28] pointed out with regard to the preceding Green Paper (meant to invite the public to comment on the issue) by the IITF, however, the two papers are advocacy documents which at times misrepresent the state of current law. Indeed, a look at the statutory history reveals that the situation as far as storing data in RAM is concerned might not be all that clear.[29]
It has been argued by some commentators that loading a work into RAM is too transient to fall within § 106 (1) of the Act <http://www.law.cornell.edu/17/106.html>.[30] However, courts have held over and over again that loading into RAM is a fixation of the work for purposes of § 106 (1). And some important voices in the literature share this view.[31] Currently in the U.S. there is a majority of experts who believe that loading into RAM is a fixation. There are, however, some serious dissenting opinions.
The “home page“ which contains the copyrighted work is not only stored in RAM. Rather it is permanently stored on the service provider’s server, i.e., a hard drive. Arguing de minore ad maius the result therefore has to be that if loading data into the more unstable RAM is a reproduction under § 106 (1) of the Act <http://www.law.cornell.edu/17/106.html> storing material on a Web server (and thus on a hard drive or other permanent storage device) must surely also be a reproduction.
In this case, however, the result can more easily be justified: the data is not lost once the computer is turned off. The data is permanently saved on a storage device. The user who uploads material onto a Web site on the service provider’s server has thus reproduced the work in a “copy“ and violated §§ 501 (a), 106 (1) of the Act provided that none of the provisions in §§ 107-120 of the Act limiting the exclusive rights of the copyright owner, apply.
But did the service provider itself reproduce the work in a copy ? As a general rule, intent is unnecessary for copyright infringement. The act does not mention intent anywhere.[32] In our hypothetical, however, the service provider had not only no intention with regard to its action, it did not even act. Technically, it only enabled the user to upload material. A U.S. District Court in R.T.C. v. Netcom[33] <http://www.netlaw.com/cases/netcom.htm> distinguished MAI by holding that an Internet access provider (Netcom) that enables users of a bulletin board service to post messages on the Usenet via its system does not cause the copying and could therefore not be held liable for direct infringement, even if Netcom’s system incidentally made temporary copies of plaintiff’s work. The court compared Netcom to the owner of a copying machine who just lets the public make copies. It pointed out that even though copyright infringement is a strict liability offense there should still be a requirement of some element of volition or causation.[34]
In a similar case one year later, the same California federal district court held in Sega v. Maphia that a bulletin board operator, on whose bulletin board service copies of plaintiff’s computer video games were stored, was not liable for direct copyright infringement. It had not been shown that he “himself uploaded or downloaded the files, or directly caused such uploading or downloading to occur.“[35] A Florida court in an earlier and somewhat unsatisfactory decision, also involving a bulletin board service,[36] did not even consider infringement by reproduction under § 106 (1) of the Act <http://www.law.cornell.edu/uscode/17/106.html> but only examined the public display and distribution rights.[37] The court in R.T.C. v. Netcom followed a surprisingly pragmatic approach and said that the bulletin board operator should not be liable for copyright infringement, both because of the structure of the Internet and because of the fact that direct liability for operators would lead to liability for countless persons who merely make sure that the Internet functions.[38]
A service provider who just enables users to abuse his Web server to post infringing material on their homepages, but who is not in an immediate way involved in uploading the material, is thus not liable for direct copyright infringement under § 501 (a) in connection with § 106 (1) of the Act.
bb) If the service provider is not liable for direct infringement of § 106 (1) it might still be vicariously liable for violating the reproduction right. Unlike the Patent Act,[39] the Copyright Act does not expressly provide for liability for infringement committed by another.[40] This does not, however, preclude the imposition of vicarious copyright liability because the concept of vicarious liability exists in all areas of the law.[41] Vicarious liability is an outgrowth of the agency doctrine of respondeat superior.[42] A service provider would be vicariously liable if it (1) had the right and the ability to control the infringer’s activity and (2) an obvious and direct financial interest in the infringing activities,[43] even in the absence of knowledge.[44] It is, however, doubtful if the service provider either has the right or the ability to supervise all users. This might be possible in some cases (with smaller ISPs).[45] But even if it were able to exercise full control of its Internet service the service provider would normally have no financial interest in the exploitation of copyrighted materials. The ISP gets paid for its services, i.e., in this case, for providing storage capacity on a server for home pages. It does not receive a financial benefit from users uploading infringing material onto the Web server.[46] There is no indication that infringement by users increases the income derived from the service provider’s services.[47] The service provider is therefore not vicariously liable for copyright infringement by its users.
cc) The service provider could furthermore be liable for contributory infringement of § 106 (1) of the Act. Contributory infringement requires a showing that the defendant induced, caused or materially contributed to the infringing conduct of another with knowledge of the infringing activity.[48] So in order for there to be contributory infringement by the ISP there first has to be direct infringement by the user. The contributory infringer’s participation in the infringer’s actions must be substantial. But it has been held that providing a service that automatically distributes postings to the Usenet is sufficient, because infringing messages are allowed to remain on the bulletin board system and to be passed on to the worldwide Usenet.[49]
In our hypothetical the service provider “just“ offers storage on its Web server. Yet the facts are substantially similar to the facts in Netcom. In our hypothetical the material stored on the Web server can immediately be accessed through the worldwide Internet. Netcom suggests that our service provider did contribute to the infringement by the user.
Finally there is the question of knowledge. If the service provider is informed of its customer’s infringing conduct, it does have knowledge. If it is not informed, the question is whether it was able to control, and did control, the material that its customers uploaded. While the answer is in most cases going to be no, this is a question of fact. If because of the size of the business, or some other reason, the service provider was able to check the content, and did so, it was “informed.“ In such a case the service provider would be contributorily liable for the user’s infringement of § 106 (1) of the Act. Otherwise, it would not be.
In short, under current U.S. law a service provider would normally not be liable, either directly or vicariously, for copyright infringement under §§ 501 (a) and 106 (1) of the Act as a result of a user’s uploading copyrighted material. It might, however, be contributorily liable.
b) ISP liability for third party downloading of copyrighted material from the ISP’s Web sites:
Is the Internet service provider liable if third persons download from its Web server copyrighted material which was previously uploaded by a user?
aa) As far as an infringement of § 106 (1) of the Act, the right of reproduction, is concerned, the examination and the result are the same as above. That is, the service provider would not be liable, either directly or vicariously. As above, if it has reason to know of the infringing activity, it could be contributorily liable if third persons violate § 106 (1) by downloading material from the Web site. In that case the primary infringement could be either the action of downloading the material onto the person’s RAM as a reproduction[50] or the third party’s printing out on paper what she downloaded from the Internet.
bb) Section 106 of the Act <http://www.law.cornell.edu/uscode/17/106.html> also gives the copyright owner the exclusive right to distribute copies or phonorecords of the work to the public by sale, other transfer of ownership, rental, lease or lending, § 106 (3), and the right to display the work publicly, § 106 (5).
aaa) The service provider might violate the distribution right if third persons download material from one of its user’s home pages. Section 106 (3) of the Act <http://www.law.cornell.edu/uscode/17/ 106.html> is infringed if somebody “distributes“ copies of the work to the public. “Distribution“ is not defined in the Act. But in a rather brief part of the opinion a U.S. District Court in Florida held, in Playboy v. Frena, that the defendant bulletin board system operator violated the plaintiff’s distribution right by supplying “a product containing unauthorized copies of a copyrighted work. It does not matter that Defendant Frena claims he did not make the copies itself [sic].“[51]
The “product“ Frena provided was his bulletin board service.[52] What the court seems to say is that after one of his users (not Frena) had posted the infringing material on the bulletin board, Frena effectively offered his bulletin board service, now containing the infringing material, to his other subscribers.
But this is not what the Act requires. The Act requires actual distribution of copies to the public, i.e., an active transfer of copies to third parties.[53] Section 106 (3) of the Act gives the copyright owner the exclusive right publicly to sell, give away, rent or lend material embodiments of his work.[54] The distribution right thus centers on tangible copies.[55] First, Frena did not transfer anything. The transfer is effectively carried out by the person downloading the material. What is happening here is a “taking“ rather than a transfer by Frena. Second, there were no material embodiments of works, no tangible copies, handed over from one person to another. One infringing copy was stored on the hard drive of the bulletin board service. When third parties downloaded the file there was a flow of data which ultimately led to another copy on the downloader’s computer. But there was no “distribution“ of tangible copies by the bulletin board system as required under the Act.
For these purposes an Internet service provider is no different from a bulletin board system operator. The Internet service provider also only provides a “package“ of services, but does not give away tangible copies of works. If users download material from a webpage stored on an ISP’s server this does not constitute “distribution“ of the material by the ISP, and it is therefore not covered by § 106 (3) of the Act. Consequently, Playboy v. Frena was wrongly decided in this respect. A service provider does not violate the right of distribution if third persons download copyrighted material from its server.
bbb) Might an ISP be liable for violating the right of “public display“ in § 106 (5) of the Act <http://www.law.cornell.edu/ uscode/17/106.html> if copyrighted material is downloaded by third parties?
First of all, the work in question needs to fall within one of the categories of works protected by § 106 (5).[56] Second, if this is the case, we then need to find out if there was a public display. According to § 101 of the Act <http://www.law.cornell.edu/uscode/17/101.html>, to “display“ a work means to show a copy of it, either directly or by means of a film, slide, television image, or any other device or process, or, in the case of a motion picture or other audiovisual work, to show individual images nonsequentially. The legislative materials tell us that Congress meant this language to include the projection on a screen or other surface by any method, the transmission of an image by electronic or other means, and the showing of an image on a cathode ray tube, or similar viewing device connected with any information storage and retrieval system.[57] This is very broad language, intended to cover as much as possible. Thus, showing a work on a computer screen might be covered by the definition.
At this point in the analysis, two questions remain: Is the display a “public“ display? And, who needs to act in order to infringe on the display right?
A display is public under § 101 of the Act if (a) it happens at a place open to the public, or (b) at any place where a substantial number of persons outside of a circle of family and acquaintances are gathered, or (c) if a display is transmitted to such a place, or (d) to the public, by any device or process. It does not matter whether the members of the public receive it in the same or in separate places, and at the same or at different times. Contrary to the court’s opinion in Playboy v. Frena[58], a “display“ resulting from the downloading of material from a Web site or a bulletin board is not a display which occurs at a place open to the public. It is not even happening at an open place.[59] The only conceivable “display“ is one being “transmitted to the public.“ However, like distribution, displaying a work requires some kind of action by the infringer.[60] Has the service “transmitted“ the material? The service provider has not acted at all. A user downloads (takes) material from a Web server. The service provider does nothing. It did not put the material on the server, and it does not pass it on. It only provides the technical means to enable others to upload and to download. Nevertheless the court in Playboy v. Frena[61] cited the House Report’s declaration that the display right precludes unauthorized transmission, and then concluded that Frena had violated § 106 (5) of the Act. The court does not ask whether Frena transmitted anything. He did not. It was the user who acted in such a way as to make the server send the material to his computer, not the ISP. Playboy v. Frena was therefore wrongly decided with regard to the display right as well.
c) Content which the service provider stores on his web site or online service:
So far we have been analysing the unauthorized uploading and downloading of copyrighted material by users and third parties. We have assumed the lack of action, involvement, or even knowledge, by the ISP. What is an ISP’s liability with regard to content which the service provider offers on its own Web site, or as material available within an online service (such as AOL or Compuserve)? In such a case, of course, the service provider would be directly liable for any possible infringements of copyrights.
d) Content which the service provider’s customers download from the Internet:
When the service provider’s customers download copyrighted material from the Internet (as distinguished from the ISP’s server) the service provider only provides the technical means to access the information. In fact, the service provider is even less involved in the user’s action. No material is stored for more than a transitory time on its server. It is merely transmitted from another location on the Internet, routed through the service provider’s system, and put in the memory of the user’s computer. The service provider’s role is almost as passive as that of a telephone company.
Short of censoring the Internet before the fact, i.e., making access to designated sites impossible, the service provider has no means of controlling what its customers download from other locations. Limiting access to designated sites might be possible with regard to specific kinds of content (usually those thought to contain material that is pornographic or “indecent“). But content-based site blocking is difficult enough. Blocking sites that contain unauthorized and copyrighted material is, at least at the present time, virtually impossible. There is still no known way to identify sites which contain material violating the Copyright Act.
For these reasons the service provider should not be liable for copyright infringement caused by customers who download infringing material from the Internet.
3.) The situation in Malaysia:
Copyrights in Malaysia are protected under the Copyright Act of 1987 (“the Act“),[62] which went into effect on December 1, 1987.[63] There are still only a limited number of texts about Malaysian law, and there is also a lack of case law in certain areas. Fairly often Malaysian courts make reference to other common law jurisdictions like the United Kingdom, the U.S., Australia and Singapore.[64]
From an international perspective it might be worth mentioning that while the U.S. joined the Berne Convention for the Protection of Literary and Artistic Works on March 1, 1989,[65] Malaysia did so on October 1, 1990.[66] So both nations are newcomers to Berne and both joined at about the same time.
The Malaysian Copyright Act protects literary, musical and artistic works, films, sound recordings and broadcasts.[67] Works need to be original to be eligible.[68] Like the U.S. Act the Malaysian Act has a fixation requirement for copyright protection.[69] The usual term of protection is the life of the author and 50 years after his death.[70] However, like some European copyright acts, but not the U.S. Copyright Act, there are special terms of protection for published editions, sound recordings, broadcasts, photographs, films and government works.[71] Unlike the U.S. Act, the Malaysian Act has a comprehensive set of moral rights of attribution and integrity for all kinds of works in section 25 of the Act as required by the Berne Convention, Art. 6 bis.[72]
Exclusive rights protected by the Malaysian Copyright Act under section 13 (1) are the rights “to control . . . the reproduction in any material form, the communication to the public, the broadcasting, the communication by cable and the distribution to the public of the whole work or a substantial part thereof, either in its original or derivative form.“ Section 13 (2) contains a long list of limitations to the exclusive rights,[73] such as “fair dealing.“ This is the Malaysian equivalent of the U.S. concept of “fair use“ in § 107 of the U.S. Act.
As far as copyright infringement is concerned, section 36 (1) of the Malaysian Copyright Act provides that a copyright “is infringed by any person who does, or causes any other person to do, without the licence of the owner of the copyright, an act the doing of which is controlled by copyright under this Act.“ The former is called “direct primary infringement“ and the latter “indirect primary infringement.“[74]
Section 36 (2) of the Act states that a copyright is also infringed if a person imports an infringing article into Malaysia, unless they convince the court that they did not, and could not reasonably, know that the article was infringing. This is referred to as “secondary infringement.“[75]
a) Uploading copyrighted material onto websites:
The proposed company, “Malaysiaserve Online, Inc.,“ could be liable under the indirect primary infringement clause in section 36 (1) of the Malaysian Copyright Act if a user uploads infringing material onto the company’s server.
First, let us examine the possible liability of the user. The analysis requires an examination of a number of terms in the Malaysian law. The user might violate the “reproduction“ right in section 13 (1) (a) of the Act. “Reproduction“ is defined in section 3 of the Act as “the making of one or more copies of work in any form or version.“ A “copy“ under section 3 is “a reproduction of a work in written form, in the form of a recording or film, or in any other material form.“ And “material form“ according to section 3 “includes any form (whether visible or not) of storage from which the work or derivative work, or a substantial part of the work or derivative work can be reproduced.“[76] Thus, under this broad definition of “material form,“ storage in RAM seems to be covered, since it is possible to reproduce a work stored in RAM by, say, saving it to a disk or printing it out. Storage on a web server will therefore have to be regarded as a copy in material form as well.
But even if the user was liable under section 13 (1)(a) of the Act, is the ISP also liable? Since the ISP engages in no infringing act, it cannot be liable as a direct primary infringer under section 36 (1). Might it, nonetheless, be liable as an “indirect primary infringer“ under the second alternative of section 36 (1)?
For an ISP to be an “indirect primary infringer“ it would have to have “caused“ the user to infringe. The scope of this causation alternative is not defined in the Act. As Khaw Lake Tee points out,[77] it could be interpreted in two ways. It could be interpreted broadly to make it almost synonymous with “authorise,“ or it could be understood more narrowly as in other common law jurisdictions, but not in Malaysia.[78]
The High Court of Kuala Lumpur interpreted “cause“ very broadly in a case involving infringing sound recordings. In that case it was clear that the defendant had sold infringing copies, but not whether he had produced them. The court simply concluded that “the defendant has been reproducing and/or disposing of unlawfully . . . the plaintiffs’ said musical works in cassettes or has otherwise caused or assisted others to reproduce and/or dispose of unlawfully . . . the plaintiffs’ said musical works in cassettes.“[79] Thus, although the court does not expressly define “cause,“ it seems to suggest that even though third parties did the infringing act and acted neither on the defendant’s behalf nor on its instructions, the defendant still could be held liable as an indirect primary infringer.[80] As Khaw Lake Tee points out, this interpretation of “cause“ is so broad that it could lead to liability for manufacturers of copying machines, or audio and video tapes.[81] While he is critical of the court’s analysis he does not offer his own definition of indirect primary infringement, but simply urges the courts to define the term more clearly in the future.[82]
Presumably, as in the U.S., knowledge is not a necessary element of infringement under Malaysian law.[83] Nevertheless, it seems reasonable to require some kind of volition or causation. As the court in R.T.C. v. Netcom noted,[84] otherwise everybody who produces or sells products which might be used in some way to produce infringing copies would be liable for copyright infringement. The analogy for an ISP is that it should not be liable for indirect primary infringement of the reproduction right. It does not take any action to cause the user to infringe. The most that could be argued is that the ISP -- like the manufacturer of a video tape recorder -- provided technical means that could be used to make illegal copies. But the ISP neither encourages, nor has means to know, if the user is going to use the web server exclusively for legal purposes or not. Malaysiaserve Online, Inc. should not be liable for indirect primary infringement of the reproduction right under sections 13 (1) (a) and 36 (1) of the Malaysian Copyright Act.
b) Downloading copyrighted material from Web sites:
Under the Malaysian Copyright Act the downloading of copyrighted material by third persons from Web sites on an ISP’s server arguably could subject the service provider to liability under a number of theories. It might be liable for infringement of the right of performance, showing or playing to the public (section 13 (1) (b)), of the right of broadcasting (section 13 (1) (c)), of the right to communicate by cable (section 13 (1) (d)) or of the right to distribute copies to the public (section 13 (1) (e)). In short, exclusive rights in copyright statutes, which used to be clearly defined, lose their clear boundaries and begin to overlap with the convergence in technologies even more than they used to in the past. Internet transmission could fall within a multitude of formerly clearly defined exclusive rights. We will deal with them one by one.
aa) The right of performance, showing or playing to the public, replaces the former right of “communication to the public“ which was defined as “making the work available to the public.“[85] Unfortunately the right of performance, showing or playing is not defined in the Act; nor is “the public“ defined.[86] But even though the performance right seems to be understood fairly broadly it does not extend to the broadcasting or the transmission by cable of a work.[87] The main problem is the fact that the “performance“ right replaced the old “communication“ right without being defined. It is reasonable to conclude from this that the legislature wanted the indirect accoustic presentation of a work to be excluded from the performance right.[88] So interpreted, the downloading of data from a Web site would not amount to a “performance, showing or playing“ under section 13 (1) (b) of the Act.
bb) The right of broadcasting, section 13 (1) (c), is defined in section 3 of the Act as the “transmitting, for reception by the general public, by wireless means or wire, of sounds or images or both.“ Material downloaded from the Internet is not transmitted “for reception by the general public.“ It is not even “transmitted.“ That is, it is not being sent out at the discretion of the operator of the Web site. Even if it was “transmitted,“ it would not be transmitted for reception by “the general public.“ The “general public“ is not defined.[89] But it would have to be understood to mean the public at large and not a section thereof, which means that transmitting to specific people may not be broadcasting.[90] Here the information is requested by single users who then receive the data from the server. This does not amount to “broadcasting“ under either the statutory definition or as generally understood.
cc) Could the right of “communication by cable,“ section 13 (1) (d) of the Act have been violated? Under section 3 communication by cable means “the operation by which signals are guided by wire, beam or other conductor device, to the public or any section thereof, for reception.“ This is a unique exclusive right introduced by the Copyright Act of 1987[91], and is presumably intended to refer, at least primarily, to what is usually thought of as “cable television.“ Single users are a section of the public, even though a very small one. From an ISP to a user there are clearly signals which are being “guided“ to the user. Under the definition of “communication by cable“ the service provider might, therefore, be liable for infringing section 13 (1) (d) of the Act. What happens when a cable subscriber chooses to “download“ a given cable channel could be said to be analogous to what happens when third persons download infringing material from an ISP’s Web server.
dd) The right of distribution of copies of the work to the public by sale, rental, lease or lending might be violated under section 13 (1) (e) of the Act. The question is whether physical copies of the work are being “sold, rented, leased or lended“ when files are downloaded from the Internet. Bits of data are being transmitted which ultimately enable the user to create more copies, but physical copies are not being distributed. Furthermore, as argued above with regard to the U.S. Act, the service provider does not do anything. It is the user, or third party, who takes data from the Web server. Thus, section 13 (1) (e) is not violated by the service provider.
c) Content which the service provider stores on its Web site or online service:
As pointed out above (at III. 2. c), a service provider is, of course, directly liable for storing infringing material on its Web site. This would at least violate section 13 (1) (a) of the Malaysian Copyright Act, the right of reproduction of the work in material form.
d) Content which the service provider’s customers download from the Internet:
What of content users download from the Internet? The service provider neither infringes, nor causes users to infringe, on the rights of the copyright holder. It only enables them to get access to material, not knowing whether they might use it legally or illegally. Thus, the service provider should not be liable for infringement under section 36 (1) of the Malaysian Copyright Act.
Under current U.S. copyright law “Malaysiaserve Online, Inc.“ is only liable for contributory infringement of the reproduction right under 17 U.S.C. §§ 501 (a), 106 (1) if a customer uploads copyrighted material onto the webserver and “Malaysiaserve Online, Inc.“ either knows about it or learns about it later.
Under Malaysian copyright law the company might be liable for a violation of the right of communication by cable under section 13 (1) (d) of the Malaysian Copyright Act when third persons download infringing material stored on the service provider’s server.
In both countries the company would be liable for infringing material posted on a website or an online service by the company itself.
Small differences in the wording of national copyright acts can lead to significantly different results in copyright infringement disputes involving the Internet. Clear definitions are crucial. A multitude of overlapping rights may be involved. Clarifications are needed.[92] However, even if international efforts of harmonization of national copyright laws are successful, there will always be subtle differences in the wording of statutes.
[1] For these and more data about Malaysia, see <http://www.asiadragons.com/country/malaysia/maldata.htm> and <http://www.asiaway.com/malay/info.htm> (May 12, 1997).
[2] See <http://www.asiadragons.com/country/malaysia/maldata.htm> (May 12, 1997).
[3] Government looking into ways to censor the Internet, New Straits Times, Sept. 22, 1996, at 12 (1996 WL 12285829). The New Straits Times can be found at <http://www.asia1.com.sg/straitstimes>; however, its archives only go back seven days.
[4] Calvin Goh & Zainul Ariffin, Dr M: Malaysia still attractive to investors despite competition, New Straits Times, Jan. 17, 1997 (1997 WL 2945145); see also James Kynge, Mahathir woos America's IT giants: Investors are being offered incentives under plans for a "multimedia super corridor," Financial Times, Feb. 26, 1997, at 4 (LexisNexis, library: WORLD, file: ALLWLD), citing an official of the Singapore Broadcasting Authority as saying that the Singaporean censorship equipment was only "intended to do a symbolic job" and that "censoring the Internet effectively is impossible."
[5] Hamisah Hamid, Anwar: Don't reject multimedia, Business Times (Malaysia), Jan. 27, 1997 (1997 WL 2964131).
[6] Justin Then & Jini Wong, Year of the Multimedia Super Corridor, Asia Computer Weekly, Jan. 20, 1997 (1997 WL 8889907).
[7] Id.
[8] Namely IBM <http://www.ibm.com>, Apple <http://www. apple.com>, Siemens <http://www.siemens.de>, Motorola <http://www.mot.com>, Compaq <http://www.compaq.com>, Sun <http://www.sun.com>, Microsoft <http://www.microsoft.com>, Sony <http://www.sony.com> and NTT <http://www.ntt.co.jp>; see James Kynge, Malaysian multimedia move, Financial Times, Jan. 28, 1997 (1997 WL 3769255). The Financial Times can be found at <http://www.ft.com/hippocampus>; however, its archives only go back 30 days.
[9] These are Mimos <http://www.jaring.my/ mimos> (a Malaysian ISP), NTT <http://www.ntt.co.jp>, IBM <http://www.ibm.com>, Sun Microsystems <http://www.sun.com>, Microsoft <http://www.microsoft.com>, Telekom Malaysia <http://www.telekom.com.my>, NCR <http://www.ncr.com> and DHL <http://www.dhl.com>; see: 12 R&D Firms to Enter Malaysia's Hi-Tech Super Corridor, Asia Pulse, March 14, 1997 (Lexis-Nexis, library: WORLD, file: ALLWLD); Malaysian Multimedia Supercorridor Invites Participants, Reuters Financial Service, Feb. 11, 1997 (Lexis-Nexis, library: WORLD, file: ALLWLD).
[10] 12 R&D Firms to Enter Malaysia's Hi-Tech Super Corridor, Asia Pulse, March 14, 1997 (Lexis-Nexis, library: WORLD, file: ALLWLD); Justin Then & Jini Wong, Year of the Multimedia Super Corridor, Asia Computer Weekly, Jan. 20, 1997 (1997 WL 8889907).
[11] Malaysia linked to eight Asian nations by cable network, Agence France-Presse, Jan. 14, 1997 (1997 WL 2039985).
[12] Darren McDermott, Internet Access Providers Focus on Asia-U.S. Companies Are Promising Faster Access and More Regional Content, Asian Wall Street Journal, Feb. 4, 1997 (1997 WL-WSJA 3796468).
[13] For general information about the creation and the development of the Internet see A.C.L.U. v. Reno, 929 F. Supp. 824, 830-838 (E.D. Pa. 1996), <http://www.eff.org/Alerts/HTML/960612_aclu_v_reno_decision. html> (May 12, 1997); Shea v. Reno, 930 F. Supp. 916, 925-930 (S.D. N.Y. 1996), <http://www.netlaw.com/cases/sheacda.htm> (May 12, 1997).
[14] This includes areas such as contract law, torts (e.g., defamation and violations of privacy), tax law, jurisdiction, criminal law and even constitutional law (e.g., First Amendment issues).
[15] Which makes Hollywood very nervous, see Hollywood Nervous Over Internet's Potential for Copying Films, West's Legal News, Jan. 13, 1997 (1997 WL 8485).
[16] Pub. L. 94-553, 90 Stat. 2541 (Oct. 19, 1976), as amended; codified at 17 U.S.C. Secs. 101-1101; the act went into effect on Jan. 1, 1978; it can be found at <http://www.law.cornell.edu/uscode/17> (May 12, 1997).
[17] Act of March 4, 1909, ch. 320, 35 Stat. 1075, as amended.
[18] 1 Melville B. Nimmer & David Nimmer, Nimmer on Copyright _ 1.02 (current through December 1995) [hereinafter: Nimmer].
[19] Robert A. Gorman & Jane C. Ginsburg, Copyright for the Nineties 5 (4th ed., 1993)[hereinafter: Gorman/Ginsburg].
[20] There are some states statutes providing for moral rights which are slightly different from the protection under the federal statute; see Gorman/Ginsburg, supra note 19, at 482. None of these state statutes protect anything but works of fine art, however, which is why in our opinion even the combination of the federal and the state statutes is still inconsistent with Art. 6 bis of the Berne Convention.
[21] MAI v. Peak, 991 F.2d 511, 517 (9th Cir. 1993), cert. denied, 510 U.S. 1033, <http://www.law.syr.edu/Course.Materials/Chon/cases/mai.html> (May 12, 1997); Sega v. Maphia, 857 F. Supp. 679, 686 (N.D. Cal. 1994), <http://www.jmls.edu/cyber/cases/sega.txt> (May 12, 1997); Religious Technology Center v. Netcom On-Line Communication Services, Inc., 907 F. Supp. 1361, 1366 (N.D. Cal. 1995), <http://www.netlaw.com/cases/netcom.htm> (May 12, 1997).
[22] Section 101 continues to say that "[a] work consisting of sounds, images or both, that are being transmitted, is "fixed" for purposes of this title if a fixation of the work is being made simultaneously with its transmission."
[23] MAI v. Peak, 991 F.2d 511, 518-519 (9th Cir. 1993), cert. denied, 510 U.S. 1033, <http://www.law.syr.edu/Course.Materials/Chon/cases/mai.html> (May 12, 1997).
[24] See NFLC v. Devcom Mid-America, 45 F.3d 231, 235 (7th Cir. 1995), cert. denied, 115 S.Ct. 2249, 132 L.Ed.2d 257; Triad Systems v. Southeastern Express, 64 F.3d 1330, 1335 (9th Cir. 1995), cert. denied, 116 S.Ct. 1015, 134 L.Ed.2d 96; Advanced Computer v. MAI, 845 F. Supp. 356, 363 (E.D. Va. 1994).
[25] National Commission on New Technological Uses of Copyrighted Works (CONTU), Final Report of the National Commission on New Technological Uses of Copyrighted Works 12 (1978): "The 1976 Act, . . . , makes it clear that the placement of any copyrighted work into a computer is the preparation of a copy and, therefore, a potential infringement of copyright."
[26] Information Infrastructure Task Force, Intellectual Property and the National Information Infrastructure -- The Report of the Working Group on Intellectual Property Rights (1995) [hereinafter: White Paper].
[27] White Paper, supra note 26, at 64. The report continues to say that "[t]he 1976 Copyright Act, its legislative history, the CONTU Final Report, and repeated holdings by courts make it clear that in each of the instances set out below, one or more copies is made. -- When a work is placed into a computer, whether on a disk, diskette, ROM, or other storage device or in RAM for more than a very brief period, a copy is made." It does not explain, however, what is meant by "more than a very brief period."
[28] Jessica Litman, The Exclusive Right to Read, 13 Cardozo Arts & Ent. L. J. 29, 32 (1994); see also Ira L. Brandriss, Writing in Frost on a Window Pane: E-Mail and Chatting on RAM and Copyright Fixation, 43 J. Copyright Soc'y U.S.A. 237, 238: "These questions . . . have been declared as virtually resolved by a commission on intellectual property and the information infrastructure appointed by the Clinton administration. . . . however, . . . the matter, in truth, is far from settled." And id. at 259: "What has `long been clear' to the government's Task Force was news to many legal scholars and commentators."
[29] H.R. Rep. No. 94-1476, 53 (1976): "On the other hand, the definiton of `fixation' would exclude from the concept purely evanescent or transient reproductions such as those projected briefly on a screen, shown electronically on a television or other cathode ray tube, or captured momentarily in the `memory' of a computer." And id. at 62: "`Reproduction' under clause (1) of section 106 is to be distinguished from `display' under clause (5). For a work to be `reproduced,' its fixation in tangible form must be `sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration.' Thus the showing of images on a screen or tube would not be a violation of clause (1), although it might come within the scope of clause (5)."
[30] Litman, supra note 28, at 42; Bradley J. Nicholson, The Gost in the Machine: MAI Systems Corp. v. Peak Computer, Inc. and the Problem of Copying in RAM, 10 High Tech, L.J. 147, 165 (1995); Niva Elkin-Koren, Copyright Law and Social Dialogue on the Information Superhighway: The Case Against Copyright Liability of Bulletin Board Operators, 13 Cardozo Arts & Ent. L.J. 345, 382 (1995)[hereinafter: Elkin-Koren]: "[T]he view that loading information into a computer's RAM creates a `copy' eviscerates the fixation requirement -- a requirement central to copyright law. Such an interpretation extends the meaning of `copying' to include the creation of both permanent and transitory duplications, and covers any information captured momentarily in the working memory of a computer." David Loundy, E-Law: Legal Issues Affecting Computer Information Systems and System Operator Liability, 12 Computer/L.J. 101 (1993), fn. 226, is more cautious in saying: "RAM is a volatile information store where the computer keeps the information it is actively processing. When the computer is turned off, all of this data is lost; thus, anything stored in RAM may be missing the required element of fixation."
[31] 2 Paul Goldstein, Copyright Sec. 5.2.1.4 a. (2d ed., 1996) [hereinafter: Goldstein]; 1 Howard B. Abrams, The Law of Copyright Sec. 5.03 [H] [1] (current through Sept. 1995) [hereinafter: Abrams]; 2 Nimmer, supra note 18, at Sec. 8.08 [A][2]: "At present, it is therefore clear that computer input constitutes the making of a `copy'."
[32] 2 Abrams, supra note 31, Sec. 14.01 [D].
[33] R.T.C. v. Netcom, 907 F. Supp. 1361, 1368-1369 (N.D. Cal. 1995), <http://www.netlaw.com/cases/netcom.htm> (May 12, 1997).
[34] Id. at 1370. [35] Sega v. Maphia, 948 F. Supp. 923, 932 (N.D. Cal. 1996).
[36] Playboy v. Frena, 839 F. Supp. 1552, 1556-1557 (M.D. Fla. 1993), <http://www.leepfrog.com/ELaw/Cases/Playboy_v_Frena.html> (May 12, 1997).
[37] These will be discussed below.
[38] R.T.C. v. Netcom, 907 F. Supp. 1361, 1372: "Where the infringing subscriber is clearly directly liable for the same act, it does not make sense to adopt a rule that could lead to the liability of countless parties whose role in the infringement is nothing more than setting up and operating a system that is necessary for the functioning of the Internet. Such a result is unnecessary as there is already a party directly liable for causing the copies to be made."
[39] In 35 U.S.C. Sec. 271 (b).
[40] Sony Corporation of America v. Universal City Studios, 464 U.S. 417, 434 (1984).
[41] Loc. cit. at 464 U.S. 435.
[42] Fonovisa v. Cherry Auction, 76 F.3d 259, 261, 262 (9th Cir. 1996).
[43] R.T.C. v. Netcom, 907 F. Supp. 1361, 1375; 2 Goldstein, supra note 31, Sec. 6.2.
[44] R.T.C. v. Netcom, 907 F. Supp. 1361, 1375; 2 Goldstein, supra note 31, Sec. 6.0.
[45] The court in R.T.C. v. Netcom leaves the question open, R.T.C. v. Netcom, 907 F. Supp. 1361, 1376: "The court finds that plaintiffs have raised a genuine issue of fact as to whether Netcom has the right and ability to exercise control over the activities of the subscribers."
[46] Kelly Tickle, The Vicarious Liability of Electronic Bulletin Board Operators for the Copyright Infringement Occuring on Their Bulletin Boards, 80 Iowa L. Rev. 391, 416 (1995).
[47] R.T.C. v. Netcom, 907 F. Supp. 1361, 1377; 2 Goldstein, supra note 31, Sec. 6.1.
[48] R.T.C. v. Netcom, supra note 47, at 1373.
[49] Id. at 1375.
[50] A position taken by American courts, but not by all scholars; see supra notes 23, 24.
[51] Playboy v. Frena, 839 F. Supp. 1552, 1556 (M.D. Fla. 1993).
[52] For the facts of the case see loc. cit. at 1554.
[53] Elkin-Koren, supra note 30, at 356: "One way to interpret a BBS transaction as the supplying of goods is to analogize it to providing a `package of services.' Those services include access to an electronic space for the exchange of information, and access to the means for the execution of the exchange. . . . [T]he BBS operator does not provide subscribers with any fixed embodiments of copyrighted works."
[54] 2 Nimmer, supra note 18, Sec. 8.11 [A].
[55] 2 Goldstein, supra note 31, Sec. 5.5.
[56] Namely 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.
[57] H.R. Rep. No. 94-1476, 64 (1976); see also Gorman/Ginsburg, supra note 19, at 521.
[58] Playboy v. Frena, 839 F. Supp. 1552, 1557.
[59] Elkin-Koren, supra note 30, at 358.
[60] Elkin-Koren, supra note 30, at 360.
[61] Playboy v. Frena, 839 F. Supp. 1552, 1557.
[62] Act No. 332 of April 30, 1987: "An Act to make better provisions in the law relating to copyright and for other matters connected therewith." Government Gazette of May 21, 1987. For the most recent changes to the Malaysian Copyright Act see Khaw Lake Tee, Recent Amendments to Malaysian Copyright Law, [1997] 2 E.I.P.R. 81-90.
[63] Dato V. L. Kandan, Background Reading Material on the Intellectual Property System of Malaysia, 85 (1993) sec. 6.2 [hereinafter: Kandan].
[64] Khaw Lake Tee, Copyright Law in Malaysia v (1994) [hereinafter: Khaw Lake Tee].
[65] 1 Nimmer, supra note 18, OV-4 ; 2 Abrams, supra note 31, Sec. 18.02 [B][5]. The Berne Convention is the most important international treaty in the area of copyright law.
[66] Kandan, supra note 63, at 3.
[67] Section 7 (1) of the Act.
[68] Section 7 (3) (a). The term "original" is not defined in the Act.
[69] Section 7 (3) (b): "A literary, musical or artistic work shall not be eligible for copyright unless . . . (b) the work has been written down, recorded or otherwise reduced to material form."
[70] Section 17 (1).
[71] Section 18-23 of the Act; see Lim Heng Gee, Exceptions to Malaysian Copyrights -- A Commentary, [1989] 3 Malayan L.J. xlix, at lix [hereinafter: Lim Heng Gee]. With the protection of government works under section 11, 12 of the Act Malaysia follows the English model. Under the U.S. Act government works are not protected by copyright, Sec. 105 of the U.S. Act.
[72] The right of attribution is the right of the author to claim authorship of the work. The right of integrity is the right of the author to object to any distortion, mutilation, modification, or other action which might be prejudicial to the author's honor or reputation. Although Malaysia was not a member of the Berne Convention at the time, even the previous 1969 Act had moral rights provisions; see Khaw Lake Tee, supra note 64, at 168, 169.
[73] See Lim Heng Gee, supra note 71, at li-lvii.
[74] Kandan, supra note 63, at 99 sec. 6.8.1.
[75] Id.; see also Lim Heng Gee, supra note 71, at xlix, l-li; the U.S. has a similar provision in Sec. 602 (b) of its Act.
[76] The term "fixation" or "fixed" does not appear in any of these definitions, even though "fixation" is defined in section 3 of the Act as well. In fact, the definition is virtually identical to the definition in the U.S. Act. However, under the Malaysian Act the term only covers the embodiment of sounds and images.
[77] Khaw Lake Tee, supra note 64, at 104.
[78] Id.
[79] Dunia Muzik WEA Sdn Bhd & Anor v. Koh Tay Eng, [1989] 2 Malayan L.J. 356, 362 (emphasis added).
[80] Khaw Lake Tee, supra note 64, at 105.
[81] Id.
[82] Id.
[83] Kandan, supra note 63, at 100 Sec. 6.8.1.
[84] Supra notes 33, 34.
[85] Khaw Lake Tee, supra note 64, at 95.
[86] Khaw Lake Tee, supra note 64, at 96.
[87] Id.
[88] Khaw Lake Tee, supra note 64, at 96 n. 78, wonders if this was the case.
[89] Khaw Lake Tee, supra note 64, at 99.
[90] Id.
[91] Khaw Lake Tee, supra note 64, at 100.
[92] WIPO tried to get the international community together and managed to get two international treaties signed on December 20, 1996. They are the WIPO Copyright Treaty, 36 I.L.M. 65 (1997), and the WIPO Performances and Phonograms Treaty, 36 I.L.M. 76 (1997). These are now open for ratification and it remains to be seen if the nations will actually change their national laws.
[Rev. 19970805]
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