Cite as 907 F.Supp. 1361 (N.D.Cal. 1995)
ing Corp., 824 F.Supp. 89, 92 (M.D.La.1993). Plaintiffs’ cases are factually distinguishable. Plaintiffs cannot provide any evidence of a direct financial benefit received by Netcom from Erlich’s infringing postings. Unlike Shapiro, Bernstein, and like Fonovisa, Netcom receives a fixed fee. There is no evidence that infringement by Erlich, or any other user of Netcom’s services, in any way enhances the value of Netcom’s services to subscribers or attracts new subscribers. Plaintiffs argue, however, that Netcom somehow derives a benefit from its purported “policy of refusing to take enforcement actions against its subscribers and others who transmit infringing messages over its computer networks.” Opp’n at 18. Plaintiffs point to Netcom’s advertisements that, compared to competitors like CompuServe and America Online, Netcom provides easy, regulation-free Internet access. Plaintiffs assert that Netcom’s policy attracts copyright infringers to its system, resulting in a direct financial benefit. The court is not convinced that such an argument, if true, would constitute a direct financial benefit to Netcom from Erlich’s infringing activities. See Fonovisa, 847 F.Supp. at 1496 (finding no direct financial benefit despite argument that lessees included many vendors selling counterfeit goods and that clientele sought “bargain basement prices”). Further, plaintiffs’ argument is not supported by probative evidence. The only “evidence” plaintiffs cite for their supposition is the declaration of their counsel, Elliot Abelson, who states that
[o]n April 7, 1995, in a conversation regarding Netcom’s position related to this case, Randolf Rice, attorney for Netcom, informed me that Netcom’s executives are happy about the publicity it is receiving in the press as a result of this case. Mr. Rice also told me that Netcom was concerned that it would lose business if it took action against Erlich or Klemesrud in connection with Erlich’s infringements.
Abelson Decl. ¶ 2. Netcom objects to this declaration as hearsay and as inadmissible evidence of statements made in compromise negotiations. Fed.R.Ev. 801, 408. Whether or not this declaration is admissible, it does not support plaintiffs’ argument that Netcom either has a policy of not enforcing violations of copyright laws by its subscribers or, assuming such a policy exists, that Netcom’s policy directly financially benefits Netcom, such as by attracting new subscribers. Because plaintiffs have failed to raise a question of fact on this vital element, their claim of vicarious liability fails. See Roy Export, 344 F.Supp. at 1353.
- 4. First Amendment Argument
Netcom argues that plaintiffs’ theory of liability contravenes the first amendment, as it would chill the use of the Internet because every access provider or user would be subject to liability when a user posts an infringing work to a Usenet newsgroup. While the court agrees that an overbroad injunction might implicate the First Amendment, see In re Capital Cities/ABC, Inc., 918 F.2d 140, 144 (11th Cir.1990),[1] imposing liability for infringement where it is otherwise appropriate does not necessarily raise a First Amendment issue. The copyright concepts of the idea/expression dichotomy and the fair use defense balance the important First Amendment rights with the constitutional authority for “promot[ing] the progress of science and useful arts,” U.S. Const. art. I, § 8, cl. 8; 1 Nimmer on Copyright § 1.10[B], at 1-71 to -83. Netcom argues that liability here would force Usenet servers to perform the impossible—screening all the information that comes through their systems. However, the court is not convinced that Usenet servers are directly liable for causing a copy to be made, and absent evidence of knowledge and participation or control and direct profit, they will not be contributorily or vicariously liable. If Usenet servers were responsible for screening all messages coming through their systems, this could have a serious chilling effect on what some say may turn out to be the best public forum for free speech yet
- ↑ For example, plaintiffs’ demand that the court order Netcom to terminate Klemesrud’s BBS’s access to the Internet, thus depriving all 500 of his subscribers, would be overbroad, as it would unnecessarily keep hundreds of users, against whom there are no allegations of copyright infringement, from accessing a means of speech. The overbroadness is even more evident if, as plaintiffs contend, there is a way to restrict only Erlich’s access to a.r.s.
