Advanced Copyright Law on the Internet

• Loss of Limits on Access: Caching may also result in the loss of control over access
  to information at a site. For example, suppose a website owner desires to limit access
  to material on a site to a single user at a particular institution through use of a
  password. Such user could enter the password, download the information to a proxy
  server, and then other, unauthorized users might be able to gain access to it.^1530

As discussed in detail in Section III.C below, the DMCA creates a safe harbor for
caching by OSPs under defined circumstances, which in part anticipate, and condition the safe
harbor upon, compliance with technical solutions that may develop and become industry
standards. The safe harbor implicitly recognizes, and seems designed to minimize, the potential
detriments of caching discussed above.

3. The Netcom Case and Application of the Fair Use Doctrine

As discussed in detail in Section III.C.6(b)(1)(ii) below, the DMCA creates a safe harbor
for caching by OSPs under defined circumstances. Even if the conditions required under the
DMCA are not met to take advantage of the safe harbor, a person performing caching of
copyrighted material might nevertheless seek to justify it under either the fair use or implied
license doctrines. Because of the potential detriments of caching, application of the fair use and
implied license doctrines to caching is uncertain.

This subsection gives a general analysis of the legal issues that arise in applying the fair
use doctrine to caching, from the perspective of an OSP performing proxy caching, since OSPs
or similar entities seem the most likely targets for claims of infringement by copyright owners
based on caching.^1531 The analysis uses as a springboard the first case to address the
applicability of the fair use doctrine to an OSP in a factual setting akin to caching, Religious
Technology Center v. Netcom On-Line Communication Services.^1532 Subsection 4 below
discusses other cases since Netcom that have expressly adjudicated the application of the fair use
and implied license doctrines to caching. In the Netcom case, the plaintiff sought to hold
Netcom, an OSP, liable for allegedly infringing material that was “mirrored” on its server as part
of providing Usenet news group services to its subscribers. The holding of that case with respect
to the various fair use factors is analyzed below.

(a) Purpose and Character of the Use

The first statutory fair use factor looks to the purpose and character of the use, including
whether such use is of a commercial nature or is for nonprofit educational purposes. Proxy
caching is generally done in the context of providing commercial services to end users, and is
therefore likely to be for a commercial purpose. However, the Netcom court noted that

(^1530) Post, supra note 1528, at 8.
(^1531) One commentator argues that even local caching might give rise to suit by a copyright owner: “For example,
such a suit might arise in the case of a large company where the cumulative effects of local caching by many
Web browsers (perhaps combined with statutory damages and attorneys fees) are significant.” Schlachter, supra
note 1473, at 4.
(^1532) 907 F. Supp. 1361.