Distinguishing Mirage (Was: T-shirt resale)

On 2/18/99, Kerry L. Konrad <k_konrad[_at_]stblaw.com> wrote:
>
> Leaving aside all questions of "moral rights," how possibly is the
> copyright owner injured if the work is not resold? Or if the single
> copy of the work is resold, injured beyond what the "first sale"
> doctrine allows? Indeed, if the practice is or becomes widespread
> and every purchaser marks up their personal copy or draws on their
> poster or whatever, how is the copyright owner injured? The de
> minimis concept is more than a declaration of "this is too trivial
> for us to bother with," it's a reflection of the traditional common
> law principle that there can be no remedy without an identifiable
> injury.

I think it's not very hard to come up with an example of how the copyright holder could regard himself as being materially "injured" when a purchaser alters the purchaser's personal copy of a copyrighted work, but does not copy or redistribute the altered copy. (This may sound a bit familiar, and perhaps I'm obsessed with this issue). As follows:

There's a new service "SimplyPostage", which you can read about at http://www.simplypostage.com/ : Using this service, you can print your own postage from your PC to avoid standing in line at the post office. First, you buy some software from SimplyPostage that runs on the PC. Then, you use that software to connect to SimplyPostage's site over the internet, and download virtual postage from the site, for which you pay SimplyPostage the actual price of the postage, plus a premium for the convenience of buying postage over the net; you can then print up as much postage as you've purchased, and affix it to your outgoing letters and packages, and the postage you've printed will be honored by the postal service. (Presumably, SimplyPostage has made arrangements with the postal service so that the postal service gets paid.)

The software itself is a loss-leader; SimplyPostage appears to make its money by charging not for the software, but through the convenience charges paid by customers in connection with ordering postage using the software.

Suppose I'd like to offer postage over the net, too; but I don't want to go to the expense of writing software for my customers to use. (In fact, that's how I'll be able to undercut SimplyPostage's price.) So, I tell my customers how to ALTER the SimplyPostage software so that it'll connect to my site instead of to SimplyPostage's site. (Maybe I even offer my customers a free patch that will modify the software for them.) Now, SimplyPostage isn't getting revenues from people who've altered their software to work with my service: they could claim to have been damaged. But all the customers have done is alter, ever so slightly, their own copy of the software (as people do routinely, by altering configuration files to achieve desired results, for example.)

SimplyPostage argues: under a plain reading of the statute, the customer has infringed by preparing a derivative work, and Ari has contributorily infringed by telling the customer to do it, and we've been damaged because we're no longer getting revenues through our service. And, our license agreement prohibits the customer from changing the software, so they're in violation of the license agreement, and Ari's liable for inducing breach of contract.

Ari and the customer argue: The changes were de minimis, and they were made to achieve compatibility, and besides, we never copied or distributed the changed software, and our counsel, Dr. Ochoa, told us that was okay. And, to the extent your license agreement purports to prohibit making changes that would be permitted by the Copyright Act, and in particular section 117(1), it's void (unless we're in a ProCD jurisdiction, perhaps), as well as constituting an attempt to illegally tie the purchase of the software to the use of your service in violation of the antitrust laws. So there.

Where does Mirage leave us here?

-Ari

Ari Kahan
<akahan[_at_]netcom.com>