Maurer School of Law: Indiana University Digital Repository @ Maurer Law Theses and Dissertations Student Scholarship 10-2016 A Comparative Law Perspective on Intermediaries' Direct Liability in Cloud Computing Context -- A Proposal for China Shi Xu Indiana University Maurer School of Law, [email protected] Follow this and additional works at: https://www.repository.law.indiana.edu/etd Part of the Comparative and Foreign Law Commons, and the Intellectual Property Law Commons Recommended Citation Xu, Shi, "A Comparative Law Perspective on Intermediaries' Direct Liability in Cloud Computing Context -- A Proposal for China" (2016). Theses and Dissertations. 32. https://www.repository.law.indiana.edu/etd/32 This Dissertation is brought to you for free and open access by the Student Scholarship at Digital Repository @ Maurer Law. It has been accepted for inclusion in Theses and Dissertations by an authorized administrator of Digital Repository @ Maurer Law. For more information, please contact [email protected]. A COMPARATIVE LAW PERSPECTIVE ON INTERMEDIARIES’ DIRECT LIABILITY IN CLOUD COMPUTING CONTEXT—A PROPOSAL FOR CHINA SHI XU Submitted to the faculty of Indiana University Maurer School of Law in partial fulfillment of the requirements for the degree Doctor of Juridical Science OCTOBER 2016 ii DEDICATION To my beloved Dad and Mom, Mr. Xu Wenguang and Mrs. Liu Li. I love you deeply in my heart. iii ACKNOWLEDGEMENT I want to express my sincere gratitude to my advisor, Prof. Leaffer. I want to thank him for his valuable guidance, consultation, supports and patience. I also want to thank my dissertation committee members, Prof. Mark Janis and Prof. Michael Mattioli, for their valuable guidance and comments on my dissertation. I want thank Prof. Lisa Farnsworth, Dean Lesley Davis, Mrs. Allison Foust and Mrs Lara Gose. Thanks so much for being so nice to me. They always encourage and support me to overcome obstacles. I’m so honored to be one of the Graduate Legal Study Office. Thanks to Mr. Li who helped me a lot with editing my dissertation. Most importantly, I want to thank my parents and grandmother for giving me all their support and love during my whole life. Thanks to my grandfather, you will live in my heart forever. Thanks to all, for my great experiences of finishing my LLM-Thesis and SJD degree. iv ABSTRACT This dissertation is motivated by two questions: How does the emergence of cloud- computing technology impact major countries’ copyright law regarding the issue of intermediaries’ direct liability? What should Chinese legislature body learn from those countries regarding this issue? Answering the first question lays a foundation for answering the second question. Usually, a cloud-computing intermediary’s specific activity may possess risk of violating a copyright holder’s right of reproduction, right of communication to the public and right of distribution. Comparatively, that intermediary can raise defenses under the exhaustion doctrine and the fair use doctrine. Analysis on these two topics consists of two parts. The first part examines copyright law in major countries or regional organizations such as the U.S., Japan or the European Union. The second part is an analysis of current related Chinese legislation and a proposal for China. This dissertation examines relevant international copyright treaties, major countries’ related legislature documents and related cases. This dissertation offers a thorough legal analysis how cloud-computing technology affects copyright worldwide. The proposal at the end consists of two parts. The first part provides four general legislature advices for China. The second part focuses on how China’s legislature should adjust copyright owner’s exclusive rights and intermediaries’ defense theories to react the impact brought by the cloud- computing technology. v TABLE OF CONTENT CHAPTER 1: INTRODUCTION 1 CHAPTER 2: DEFINING CLOUD COMPUTING 7 CHAPTER 3: INTERMEDIARIES’ DIRECT LIABILITY OF COPYRIGHT INFRINGEMENTS 13 I. Infringe the Right of Reproduction 13 i. THE U.S. PART— From the Case Law Relevant to The Right of Reproduction 15 A. Before the RAM Copy Doctrine: Elektra v. Gem, Basic Book v. Kinko’s AND Priceton University v. Michigan Document Service 16 B. MAI v. Peak --- the RAM Copy Doctrine 18 C. Religious v. Netcom -- An Limitation Attempt: “Volitional Vonduct” 22 D. DMCA’s Amendments— Exceptions to the RAM Copy Doctrine 23 E. CoStar Group, Inc. v. LoopNet, Inc.—Qualitative/Quantitative Components of Fixation’s Transitory Duration Requirement 24 F. Cablevision case—Introduced Transitory Duration Requirement Besides the RAM Copy Doctrine 25 G. Flava Works. Inc. v. Gunter.—Implicitly Reject the RAM Copy Doctrine 30 H. Capital Records, LLC v. ReDigi Inc. 31 ii. The EU part 36 A. EU Copyright Law’s Revolution 36 B. EU Directives and ECJ’s Judgments 39 a. Computer Program Directive (Software Directive) 39 b. Rental and Lending Directive 40 c. Database Directive 41 d. Information Society Directive 42 e. Satellite and Cable Directive 48 C. UK 49 iii. Other Countries- Singapore, Australia, Japan 51 vi A. Singapore 51 B. Australia 53 C. Japan 57 iv. How Cloud Computing Effect the Reproduction Right? – A proposal for China 62 A. How Cloud Computing Effect the Reproduction Right? 63 a. When there’s a Deduplication Process, Who Makes the Copy? 64 b. Is there a “copy” being created?—When “Streaming” a video or audio from the cloud. 67 B. The Right of Reproduction and a Proposal for China 72 II. Infringe the Right of Communication to the Public 79 i. The U.S. Part 82 A. In 1976 Revised Copyright Act 84 B. Single Copy requirement of Transmit Clause—Redd Horne case, On Command case, Nimmer’s suggestion and Cablevision II 86 C. Zediva, FilmOn X and Aereo Case 89 D. MP3tunes Case 98 ii. The EU Part 101 A. Rental and Lending Directive 102 B. Satellite and Cable Directive 106 C. Database Directive 106 D. Information Society Directive 107 a. The Right of Communication to the Public 108 b. The Right of Making Available to the Public 110 c. The Definition of “Public” 113 iii. Other Countries 124 A. Singapore- The Right of Communication to the Public 124 B. Japan— Public Transmission Right 130 C. Australia— the Right to Communicate to the Public 137 iv. How Cloud Computing Affect the Right of Communication to the Public?— A Proposal for China 144 vii A. What constitute “public”?— Deduplication Technology 144 B. Who is communicating?— the Users or ISPs? 145 C. The Right of Dissemination on Information Networks and a Proposal in China 146 a. Does The Right of Dissemination on Information Networks Regulate “Non-Interactive Communication?” 148 b. How To Define “Provide?” 151 c. Who Provides the Works? 159 d. A Proposal for China 161 III. Infringe the Right of Distribution 162 i. The U.S. Part 164 A. Digital Distribution 165 B. Distributive Principle—Evidence Required to Establish Distribution 168 a. The “Actual Distribution” Requirement 169 b. The “Making Available” Requirement 176 C. Who Infringe the Distribution Right? 181 ii. The Right of Distribution in EU 184 A. Is There A Digital Distribution Under EU’s The Right Of Distribution? 185 B. Questions Arouse With Regulating Digital Distribution By The Right Of Distribution 188 iii. The Right of Distribution in Other Countries 190 A. Singapore 190 B. Australia 191 C. Japan 193 iv. How Cloud Computing Affect the right of Distribution?— A Proposal for China 194 A. Digital distribution or not? 195 B. The Right of Distribution and A Proposal for China 196 a. The definition of distribution in Chinese law and its three key components 196 viii b. Could the right of distribution in China regulate digital distribution? 199 c. A proposal for China 205 CHAPTER 4 : INTERMEDIARIES’ POTENTIAL DEFENSE 208 I. ExhAustion Doctrine (First SAle Doctrine) 208 i. The U.S. Part—The First Sale Doctrine 210 A. What is the First Sale Doctrine? 212 B. Is it License or Sale? 213 C. Could the First Sale Doctrine Be Applied to the Digital World? 219 a. The ReDigi Case and Reasons for not Extending the First Sale Doctrine to the Digital Transmission 219 b. But, Why Not? 223 ii. The E.U. Part— the Exhaustion Doctrine 227 A. What Constitutes a “Sale”? 229 B. Should the E.U. Exhaustion Doctrine Encompass Digital Transmissions? 231 C. Limitations on ECJ’s conclusion 234 iii. The Exhaustion Doctrine in Other Countries 236 A. Singapore 236 B. Australia 238 C. Japan 240 v. How could Cloud Computing Affect the Exhaustion Doctrine and A Proposal for China. 242 A. The Affection of Cloud Computing towards the Exhaustion Doctrine 243 B. China’s Situation and A Proposal for China 245 II. FAir Use—Legal Exceptions or LimitAtions 249 i. The U.S. Part—Fair Use 251 A. Productive Use (Transformative Use) Theory in the Preamble 252 B. Four Criteria of the Fair Use Doctrine 256 C. Napster Case, ReDigi Case and Google books Case – Application of the Fair Use Doctrine in the Digital World 259 ix ii. The E.U. Part—Limitations and Exceptions 263 A. Limitations and Exceptions in the Software Directive 263 B. Limitations and Exceptions in the Information Society Directive 264 iii. Other Countries 275 A. Singapore 275 B. Australia 277 C. Japan 282 iv. A Proposal for China to deal with fair use exception under cloud computing context 286 A. Exceptions or Limitations to Copyright under Cloud Computing Context.286 B. Chinese Limitation List and A Proposal for China 288 a. China’s Limitation List 289 b. The General Guideline for Applying The Limitations List 291 c. There Is An Existing Limitations List To The Information Network 292 d. A Proposal For China 294 CHAPTER 5: CONCLUSION 296 BIBLIOGRAPHY 300 x Chapter 1: Introduction In the last two decades, the increasing digitization of copyrighted content and the growth of Internet created lots of challenges to copyright law area.