Now filmmakers can access audiences in a way that was never before possible. Whether Quinton Terartino was right or wrong that a good filmmaker doesn’t have to be developed in a degree program at film school, everyone from the emerging independent filmmakers of the world to high school students working on their English final projects know that motion picture distribution on the Internet is a reality. Soon technology will catch up to many more of the possibilities of film distribution in cyberspace.

There is disagreement among experts as to whether pre-Internet copyright law policy arguments in landmark United States Supreme Court copyright opinions remain relevant as a legal fallback for the Digital Millennium Copyright Act (DMCA).  The DMCA provision which is most applicable to the problems immediately facing film distribution on the Internet must be interpretable so they may not only serve the major Hollywood production studios but also independent filmmakers. Policy arguments for independent filmmakers who want to begin film distribution on the Internet now can best be framed by 1) defining the limits of pre-Internet copyright legislation, 2) describing the scope of DMCA §1201(a) (circumvention of access controls) and 3) comparing the application of pre-Internet copyright legislation to the application of DMCA  §1201(a).

Outlining the potential effects of the existing copyright law on the two most likely problems that independent filmmakers will encounter from technologically facilitated copyright infringement offers preparation for the fast approaching future and the prevention of unnecessary legal frustration. These policy arguments are crafted more specifically for professional and amateur independent filmmakers seeking to promote their work on the Internet. In addition, these policies can be utilized to protect the interests of the everyday filmmakers. Everyday filmmakers include everyone from high school students making works like "Mom Making Dinner" and "Father and Daughter" to people documenting family history on film. Trevor Hall, A Documentary Classroom: Teenagers learn to embrace a tradition of passionate observation, DoubleTake, Summer 2001, at 16.

 Access to the Internet means that independent filmmakers can more easily be their own producers and more easily seek money from sponsors and donors by putting promotional trailers on the Internet. By putting a short film or even just a 10 minute promotional trailer together for web distribution, independent filmmakers can get projects started by attract funding to complete films that otherwise would never be made. For example, "[o]n Oct. 8, 1999, the short, "Sunday's Game," became the [first film] posted on Ifilm.com. By Oct. 10, more than 30 companies had called to set up meetings." Hugh Hart, New Media, Old Methods: The days when filmmakers used the Web to bypass Hollywood are over Los Angeles Times, February 18, 2001. In the Spring of 2001, the makers of "Sunday's Game" who had "no prospect of distribution on the film festival circuit or anywhere else" in 1999 were "wrapping 'Corky Romano,' their first feature film for Disney, with movie and TV projects lined up at Fox, ABC, DreamWorks and Universal." Id.

Currently, MGM and CinemaNow charge "from $1.99 to $5.99 to view" either of their two 30-day trial period films. Simon Avery. MGM testing distribution of movies online, Associated Press Newswires. February 20, 2002 at 2. "As part of the trail, MGM [is testing] CinemaNow billing and security software." Id. Also, once users successfully download the film they select, they have 24 hours to view the film. "Electronic locks in the software have been designed to prevent copying once the movies are downloaded." Id.
There are several online film festivals that have emerged in the past 5 years. These online festivals give filmmakers the opportunity to post their work on the web and have web-site users serve as their jury. The Sundance Online Film Festival at sundanceonlineresourcecenter.com offers an on-line agreement for filmmakers to click on prior to posting their work. At iFilm.com users have a "submit your film" option. These exciting opportunities are not without risk.

Atomfilms.com is based in Seattle. This website is known for "valu[ing] artistic vision and community participation over power lunches and opening weekend box office," measures of success. Hugh Hart, New Media, Old Methods: The days when filmmakers used the Web to bypass Hollywood are over,  Los Angeles Times, February 18, 2001. In December of 2000, Atomfilms.com merged with Shockwave.com. Shockwave is a San Francisco based site. Atomfilms.com, Shockwave.com, and Cinimanow.com are all sights where DVDs can be viewed. After accessing the site, users need only sign-on to set up credit card payment for the DVD they wish to view and download the film.

Many sites devoted to film distribution recently suffered along with the rest of the dot.com industry. Several sights were shut down. In order to combat the economy's downturn and stay operational, sites like Shockwave.com are seeking demographic information about their users. For example, at Shockwave.com users are invited to take a multiple choice answer survey: "1) over the past three months, how many movies have you seen in the theater? 2) During 2002, how will your spending habits compare to last year? 3) How many leisure trips do you plan to take in 2002?" Shockwave.com.

Although technology is currently less than optimal, it is not only possible to distribute films on the internet through host sites and individual web pages, but it is probable that as technology advances rapidly, so too will the supply of high quality independent film on the internet. In his book, the Future of Ideas, Lawrence Lessig summarizes the contribution recent technological advances have made to independent filmmaking feasibility. Lessig at 124. "The costs of production of film have dropped dramatically as digital equipment has become more powerful and less expensive. We are soon to enter a time when filmmakers will be able to produce high-quality film for digital devices at 1 percent the cost of the same production with traditional tools." Id. Now more than ever, independent filmmakers can greatly increase their chances of successfully promoting their work on the Internet by using technology and copyright law to their advantage.

 In October of 1998, President Clinton signed the Digital Millennium Copyright Act into law. Approximately one year earlier, Eric Schlachter argued that "no new laws designed to increase the rights of intellectual property owners on the Internet" were needed. Eric Schlachter, The Intellectual Property Renaissance in Cyberspace: Why Copyright Law Could Be Unimportant on the Internet, Berkeley Technology Law Journal (1997) at 21. This argument for "letting the marketplace reach its own equilibrium" at the conclusion of his model is slightly exaggerated as applied to independent film distribution on the Internet. Id. He states that most infringement by Internet users is based on their mistaken belief that "intellectual property found on the Internet is free for the taking" and therefore should be prevented simply by requiring intellectual property owners to "adopt technology controls rather than rely on copyright infringement litigation." Id at 20.

Furthermore, Schlachter goes on to argue that "increasing the scope of the copyright law" is actually a counter intuitive decision because user infringement is largely based on mistake. In hindsight, and since Napster, it is far less likely today that film could be mistakenly distributed on the Internet in violation of the exclusive rights of the copyright holder to distribute their copyrighted works under 17 U.S.C. §106.

"[No] single technology or method can prevent all forms of infringement. However, [a] combination of technologies" and law "can provide significant protection against unwanted infringement." Eric Schlachter, The Intellectual Property Renaissance in Cyberspace: Why Copyright Law Could Be Unimportant on the Internet, Berkeley Technology Law Journal (1997) at 14. The major motion picture studios' greatest fear is that "once a studio releases its films online in digital format, it will relinquish all control over their subsequent use and distribution. The industry's response [is] an increasingly heavy-handed effort to fight piracy with technology." Napster all over again? - Movies and the Internet The Economist, March 23, 2002. Ultimately, using technology alone as an approach to fight copyright infringement of film on the Internet will "always [pose limitations] because no form of encryption is impenetrable. Id at 2.

Technological protection on the Internet alone will not prevent copyright infringement. Furthermore, the recent increase in independent filmmaking and Internet distribution does not mean that there is a corresponding increase in independent film revenues as of yet. Litigation costs for copyright infringement actions alone could put independent filmmakers out of business. Thus, it is crucial that the incentive to create as it pertains to copyright law be argued as a matter of policy in the context of advocacy for independent filmmakers utilizing the Internet.

Independent filmmakers who use the Internet for distribution of their work do so no only for the promotion of their films but also their careers. In his 1994 piece "The Economy of Ideas", Barlow describes the "delicate task" of achieving a quid pro quo balance in copyright between societies right to keep ideas in the public domain and individual rights to expression. John Perry Barlow, The Economy of Ideas, Wired 2.03 March 1994 at 5. "The [copyright laws were developed to carry out] the delicate task of getting mental creations into the world where they could be used - and could enter the minds of others - while assuring their inventors compensation for the value of their use." Id.

Some argue that diversity in films will not increase because the "constraint on diversity in films is not in the channels of distribution, but rather the limited attention viewers have for stars." Don R. Le Duc, Beyond Broadcasting: Patterns in Policy and Law (New York: Longman, 1987), 128. On the other hand, those who believe that society can and will discriminate between popular culture mono-plot films and independent film disagree. If society values access to more non-popular culture films and if major Hollywood production studios like Warner Brothers, Disney, Fox, Sony, MGM and Universal value access to more unique project pitches, then as a matter of policy copyright law should offer independent filmmakers who distribute films on the Internet adequate copyright infringement protection.

The idea that independent filmmakers need at least a modest economic incentive to create is a practical one. In her vocational guide for emerging artists, Carol Lloyd advocates risk taking. Carol Lloyd, Creating a life worth living: a practical course in career design for aspiring writers, artists, filmmakers, musicians, and others who want to make a living from their creative work (HarperPerennial) 1997. Adequate copyright protection for independent filmmakers means recognizing the economic risks they take with their lives in order to reach a level of success where they can make a living making films. Simply put, the motivation of the majority of independent filmmakers in making their films is often to be able to share their work with the public not to profit from keeping a monopoly against the public's best interest.

 In the mid to late 1980s and in the early 1990s, plaintiff film producers brought direct copyright infringement suits against restaurant owners, video cassette rental stores, and resorts. Paramount Pictures Corporation v. Sullivan, 546 F. Supp. 397, (1982); Columbia Pictures Industries, Inc. v. Redd Horne Inc., 568 F. Supp. 494 (1983); Paramount Pictures Corporation, v. Labus, 1990 WL 120642 (W.D.Wis.). In each of these cases, major production companies were able to stop copyright infringers from distributing and displaying their works publicly.

1. Sony

a. The Sony Majority Opinion

The DMCA was not in effect when the United States Supreme Court decided Sony Corporation of America v. Universal City Studios, Inc. 464 U.S. 417 (1984).

In 1984, the court held that a party could not be sued merely because they manufactured and sold a product that could be used for copyright infringement. Sony, the defendant, manufactured video tape recorders (VTRs) that could be used for "time shifting". Time shifting allowed users of the VTRs to program their VTR to record programs when they were not watching television. The defendant argued that time shifting was used only for private home use and that users erased programs from the tapes after viewing them. Therefore, the defendant argued, their product fits within the fair use affirmative defense under §107 to Universal's §106 copyright infringement claim.

 Universal City Studios was not satisfied with Sony's justification for VTR use. Universal argued that revenues would decrease with the decrease of live audiences as a result of Sony's manufacture of VTRs. The court discussed its analysis of the §107 factors and concluded that time shifting is fair use stating that Universal would not lose revenues as a result of time shifting based on the fact that Universal could not show any actual harm from time shifting at the time of trial. Id. at 455. More specifically, as a matter of policy the court says that finding copyright infringement in Sony would be taking away too much of Sony's rights in a product which the court finds has a primary use other than to make copyright infringement possible when compared with Universal's rights to prohibit the sale of products that make copying of Universal programming possible.

b. The Sony Dissenting Opinion

 In Justice Blackmun's dissent, he states that absolute monopolies over expression would not further the "Progress of Science and the useful Arts" as the framers of the constitution intended. Sony Corporation of America v. Universal City Studios, Inc. 464 U.S. 417 (1984). Comments pertaining to factor 4 of §107 can be used to make a particularly strong policy argument for Internet copyright protection for independent filmmakers today. 17 U.S.C.A. §107. Justice Blackmun points out that the majority misinterpreted factor 4 of  §107 by misreading "potential market". Id. According to the dissenters, plaintiffs in copyright infringement cases like Sony in the future do not have to show actual harm but only need to show likelihood of harm. Only a showing of likelihood of harm should be required because "a copyright owner need prove only a potential for harm to the market for or the value of the copyrighted work." Sony Corporation of America 464 U.S. 417 (1984) at page.

 The dissent's point as to factor four of the fair use defense may serve independent filmmakers seeking copyright protection for Internet distribution and promotion well. Recognition of the fact that protection against potential economic harm to independent film is key: most independent films which earn an economic return from Internet distribution will be the result of studio production deals. It is in the case where independent films are infringed prior to receipt of major studio production offers when films are nearly impossible to value on a monetary basis and are therefore most susceptible fair use defenses. As a matter of policy, if courts are willing to enforce infringement claims against unauthorized copying of independent film on the Internet then independent film as a whole will have a greater chance to thrive.

Another point where the dissent and majority in Sony differ is illustrated in RealNetworks. The court in RealNetworks, Inc. v. Streambox, Inc. emphasizes that the "Sony decision turned in large part on a finding that substantial numbers of copyright holders who broadcast their works either had authorized or would not object to having their works time-shifted by private viewers." When contrasting Sony with RealNetworks, the RealNetworks court does not mention the dissent's point that there is a potential for harm to the market for the studios' copyrighted works. Sony Corporation of America 464 U.S. 417 (1984) at page. The Sony dissent states that "[t]he Studios have demonstrated a potential for harm, which has not been, and could not be, refuted at this early stage of technological development." Id. The fact that the majority in such a recent case (2000) overlooked the Sony dissent's arguments related to perhaps the most important fair use defense factor serves as a word of caution: independent filmmakers who reach litigation for infringement of their copyrighted work on the Internet should be certain to address and argue for the Sony dissent's interpretation of factor 4 of 17 U.S.C. §107.

2. Today's distribution problems

 a. Direct copyright infringement

The major motion picture production studios "are fighting the emergence of DVD players which can play discs" that are encrypted in order to prevent copyright infringement. Charles Arthur, First film released for rental over the Internet, The Independent, January 23, 2001. These DVD players would "upset schedules for film releases" around the world. Id. Universal City Studios, Inc. v. Reimerdes illustrates the same copyright infringement circumstances. 111 F.Supp.2d 294 (2000). In Universal, the plaintiff studios utilize the Content Scramble System (CSS) which makes a DVD unviewable unless it is "played on a drive containing the decryption key to access the DVD's content." Jane Ginsburg, Copyright Use and Excuse on the Internet, 24 Colum. -VLA J.L. & Arts 1 at 1. The defendant created a code to decrypt DVDs and called the code DeCSS. Although the defendant made a first amendment argument that source code is speech and should thereby be protected under the United States Constitution, the court found that the plaintiffs "made out a prima facie case of violation of the §1201(a)(2) prohibition on the dissemination of devices primarily designed to circumvent access controls." Jane Ginsburg, Copyright Use and Excuse on the Internet, 24 Colum. -VLA J.L. & Arts 1 at 6.

 When the Second Circuit addressed the district court's opinion in Universal City Studios, Inc. v. Reimerdes, Justice Newman stated that "fair use has never been held to be a guarantee to access to copyrighted material in order to copy it by the fair user's preferred technique or in the format of the original." Universal City Studios, Inc. v. Corley, 273 F. 3d 429, 459. More than likely, defendants in the future will make the same argument that Reimerdes made: the district court decision is an unconstitutional limitation of fair use. Universal, 111 F. Supp. 2d 294. Even more threatening than a speech defense is the practice of "electronic civil disobedience". "The Hacker Quarterly" at 2600.com posted DeCSS as an act of "electronic civil disobedience" and soon several more websites posted DeCSS before a court ordered a preliminary injunction and supposedly stopped the promulgation of DeCSS on the web. Jane Ginsburg, Copyright Use and Excuse on the Internet, 24 Colum. -VLA J.L. & Arts 1 at 4.

 Independent filmmakers who reach the point of litigation in their infringement conflicts should be aware of the policy argument made by Universal in Universal City Studios, Inc. v. Reimerdes. The court characterizes this argument in its conclusion: 1) Universal invested great amounts of money over time in motion picture production in reliance on the existing copyright law. 2) Universal should enjoy the "exclusive right to copy and distribute [their] motion pictures for economic gain." Universal, 111 F. Supp. 2d 294 at 345. 3) New technology should not change Universal's ability to rely on established copyright law. Universal, 111 F. Supp. 2d 294 at 345. Most independent filmmakers, professional and amateur alike, will not expend anywhere near the monetary amount invested by Universal. Still, when considering major studio productions to independent production scale making this same policy argument should only help independent filmmakers.

 b. Contributory copyright infringement

The web site Scour.com and chat-rooms like LimeWire and Morpheus already facilitates trading of movies over file-sharing networks. Internet film trading that does not meet first sale requirement will most likely be analogous to Napster; web site owners will be most likely be liable for contributory copyright infringement.

Advances in technology not only facilitate the distribution of independent film on the Internet, future advances in technology may provide better means for independent filmmakers to protect themselves from copyright infringement prior to litigation. A useful predictor of challenges to come for independent filmmakers is the current challenges emerging in Hollywood.

So far, bandwidth limitations have kept a pseudo cap on the unauthorized trading of feature films. Jessica Litman, Digital Copyright (2001) at 169. Still, "up to 500,000 digital copies of feature films are already being downloaded every day." David Menation, "Minnesota Public Radio: Marketplace" March 25, 2002. The Hollywood movie industry "relies on a careful, controlled release pattern." Id. Over 75% "of a typical Hollywood film's revenue comes after its release in cinemas, from video, DVD, television and pay TV sales." If Hollywood has its own version of Napster looming on the horizon, "it would blow [Hollywood's film revenue] system away." Id. Two years ago, film production by major Hollywood studios cost 55 million dollars on average while promotion cost 27 million dollars on average. Id.

Therefore if the threat to the established major Hollywood production studios is so great, the risk to fledgling independent filmmakers with more limited budgets is much greater. According to a 2000 Cyberspace Lawyer piece, there are "Key Deal Points" that independent filmmakers should consider when choosing an Internet distributor. Konrad L. Trope, Content Creators Beware When Negotiating "Internet Rights", 5 Cyberspace Lawyer, 16, 17 (2000). For example, filmmakers should look for false advertising with regard to bandwidth: be certain that Internet distributors are not promising technology that is not even available. Id.

Technological advances make it advantageous both in terms of pre-litigation solutions and protection under the DMCA  §1201(a) to use technology to protect independent film distribution on the Internet. By using technological protection features in film distribution, plaintiff filmmakers who end up in litigation should have less reason to fear the unsettled implications of Sony.

Independent filmmakers must continue to emphasize the quality and importance of their work to courts, policy makers and the public so that their success is not compared to the box office successes of the major motion picture studio productions. Perhaps when and if a case of direct copyright infringement like Universal City Studios, Inc. v. Reimerdes reaches the United States Supreme Court it will be independent filmmakers who brings the infringement claim rather than a major motion picture studio. As a matter of policy, will the court be as willing to find that the Digital Millennium Copyright Act (DMCA) §1201(a) does not unlawfully limit the doctrine of fair use?

 b. Reconciling Nimmer with Ginsburg: Sony and DMCA

Sony will remain important at least in the near future because the majority opinion will be cited as United States Supreme Court precedent in defendants' briefs in their defenses of alleged violations of the DMCA (see Realnetworks v. Streambox see if cited in DVD case and Napster) The Sony dissent and the Universal holding bear related policy rationale's. Recall, that the majority in Universal said that Universal should enjoy the "exclusive right to copy and distribute [their] motion pictures for economic gain" and that new technology should not change Universal's ability to rely on established copyright law. Universal, 111 F. Supp. 2d 294 at 345. Since both the Sony dissent and the Universal majority support arguments that are best framed for plaintiffs in copyright infringement cases, it is possible to assert the policy rationale from the Sony dissent in cases that take place now, even in the context of the DMCA.

Copyright experts Ginsburg and Nimmer differ in their reconciliation of Sony with the DMCA. Ginsburg says "it is worth observing that, while the RealNetworks court rejected Streambox' fair use arguments on the merits, the court did not dismiss fair use defenses as inapplicable to anti-circumvention claims." Jane Ginsburg, Copyright Use and Excuse on the Internet, 24 Colum. -VLA J.L. & Arts 1 at 4.

On the other hand, Nimmer's copyright treatise responds to the Sony court majority by stating that under the DMCA as to the fair use defense a "given piece of machinery might qualify as a stable item of commerce, with a substantial non-infringing use, and hence be immune from attack under Sony's construction of the Copyright Act" but that "piece of machinery" will still "be subject to suppression under Section 1201" of DMCA. Nimmer on Copyright (1999 Supp.), § 12 A.18[B]. Nimmer goes on to interpret Sony in light of DMCA § 1201 to mean that now "manufacturers [will need to design their products to be compliant] with Section 1201 in order to avoid a circumvention claim, rather than under Sony to negate a copyright claim" with a fair use defense. Id.

Since even the experts on Copyright Law disagree on Sony's implications under DMCA, it would be most advantageous for independent filmmakers to err on the conservative side and prepare to combat fair use defenses such as the one that prevailed in Sony.

 As for the near future, independent filmmakers and big movie studios alike should keep the lessons of Napster in mind. Once downloading films can be accomplished in less time, studios and other distributors will be better off if they are able to "find a reasonable balance between protecting their revenues" and keeping their users satisfied. The Economist, March 23, 2002. The more tight fisted "the industry is over what people can do with the movies they pay to download, the more the studios' and [other Internet film distributors] own services will be a second-rate alternative to piracy. Id.