Open Wi-Fi and Copyright: A Primer for Network Operators

Open networks provide Internet access to the public. Users do not need to subscribe – they simply connect their devices, often over a wireless connection. For instance, the City of San Francisco recently deployed a free, public Wi-Fi network along a three-mile stretch of Market Street. Similarly, the Open Wireless Movement encourages owners of home Wi-Fi hotspots to open their networks to the public.

Operators of open networks may worry that they could be liable if people use their networks to engage in copyright infringement. This blog post generally explains the scope and limits of secondary liability for the acts of users, and additional steps network operators may choose to take to further limit any legal risk.

This post should not be taken as legal advice specific to any individual network operator.
If you want such advice, please consult a copyright lawyer.

1. What is Copyright Infringement?

Let’s begin with some basics. First, you can only be held liable for the acts of your users if they have themselves violated copyright law. To have a “secondary” violation, there must first be a “primary” or “direct” violation.

A. Direct Infringement

Copyright infringement occurs when somebody violates one of the exclusive rights of the copyright holder. For instance, if a user downloads a copy of a movie without permission from the copyright holder, she may be liable for copyright infringement.

Copyright is a “strict liability” rule, which means that it doesn’t much matter whether or not the user thought she was breaking the law.

To be liable for direct infringement, a person must have committed some voluntary act that caused the infringement to occur. This is called the “volitional conduct” doctrine, and it’s an important one for network operators because it distinguishes between service providers that act as passive conduits for network traffic, on the one hand, and providers that actively control the information users post and access on their networks. If you are nothing more than a conduit for information packets, you shouldn’t be legally responsible if those packets happen to contain infringing material. As a federal district court in California explained back in 1995:

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.

Several federal appellate courts have followed the district court’s ruling.

B. Secondary Liability

So, odds are that a court would not hold a network operator directly liable for copyright infringement based on the acts of users. But that doesn’t end the analysis, because a copyright holder might try to claim that a service provider is indirectly responsible for the infringing acts of its users. This is called “secondary” liability.

Contributory infringement occurs when the second party (1) knows of the infringement and (2) “induces, causes, or materially contributes to the infringing conduct of another. For instance, a record store that sold blank tapes and encouraged customers to use its coin-operated “Make-a-Tape” machine to copy prerecorded tapes was held liable for contributory infringement. An ISP that actively and knowingly encouraged its users to use its service to download popular movies, without authorization, might be found liable on this theory.

Liability for contributory infringement depends largely on the ISP’s degree of control over the information its users transmit. In one leading case, an ISP hosted its users’ Usenet messages and distributed them to other Usenet servers around the world. The court held that the ISP could be liable only if the copyright holder could prove (1) that the ISP was aware of the infringing material and (2) that the ISP nonetheless continued to store and distribute the material.

A network operator could be vicariously liable for the acts of its users if it “(1) has the right and ability to control the infringer’s acts and (2) receives a direct financial benefit from the infringement.” For instance, in a Second Circuit case, the owner of a dance hall was vicariously liable for copyright infringement where it hired an orchestra to play at the hall and profited from the performance, even though it did not know the orchestra didn’t have permission to play some of the music it chose.

This kind of liability depends on whether the ISP has the right and ability to control its users’ acts and whether the ISP received a direct financial benefit from a specific user’s infringing activities. If the ISP provides equal service to all of its users, it will be difficult to establish that it is benefiting from a specific user’s activities. If it is a noncommercial service, of course, the “direct financial benefit” prong will be even harder to prove.

In short, a network operator is unlikely to be held liable for the infringing activities of its users unless it knows about and assists those activities, or controls and financially benefits from them.

The safe harbors available to network operators by the Digital Millennium Copyright Act (“DMCA”) will be discussed in a future blog post.

This edited article was provided by the Electronic Frontier Foundation, a nonprofit group which advocates for innovators and users of technology. The article has been licensed under the Creative Commons Attribution License.

This should not be taken as legal advice specific to any individual network operator. If you want such advice, please consult a copyright attorney.