Thwack!! Take that, user-generated content! Marvel Enterprises v. NCSoft.

• Author: Szabo, Carl Michael

1. INTRODUCTION II. THE GROWTH OF USER-GENERATED CONTENT A. The Birth of User-Generated Content B. User-Generated Content Develops C. Two Types of UGC Emerge III. COPYRIGHT INFRINGEMENT DEGRADES USER-GENERATED CONTENT SITES IV. THE LEGAL STATE OF SECONDARY INFRINGEMENT A. Secondary Infringement--Defining Contributory Infringement and Vicarious Liability B. Applying Secondary Infringement to Network Administrators V. SUPERHEROES ARE ENTITLED TO COPY PROTECTION TOO VI. A CASE FOR SECONDARY INFRINGEMENT THROUGH USER-GENERATED CONTENT: MARVEL V. NCSoft A. Background of the Case B. Applying Secondary Infringement to NCSoft 1. Existence of Direct Infringement by a Primary Infringer 2. Finding Secondary Infringement VII. FINDING HARMONY BETWEEN COPYRIGHT AND USER-GENERATED CONTENT A. The Future of Piracy Through User-Generated Content: YouTube as a Model 1. YouTube's Course for a Marvel Iceberg 2. Common Problems Facing YouTube and, in Turn, User-Generated Content 3. Inability of Current Solutions to Fix User-Generated Content B. Revenue-Based Reapportionment C. Benefits of Revenue-Based Reapportionment VIII. CONCLUSION I. INTRODUCTION

   Copyright protection, a constitutionally established right, (1) is now endangered due in part to changes in technology. Established before the United States itself, (2) American copyright protection has continued even as the media it protects have grown and changed. Copyright law has survived both the American Revolution and the Industrial Revolution. However, facing the Internet Revolution, copyright law, as it existed for hundreds of years, may become extinct unless it evolves with new technology.

   The online world, with the ability to create instant, anonymous copies of words, pictures, sounds, and videos, has become a breeding ground for unfettered copyright violations. (3) The advent of user-generated content (UGC) (4) further creates a significant venue for copyright infringement: a situation in which the rights of UGC-hosting Web sites (UGC sites) are often antithetical to the rights of copyright holders.

   Eventually this situation will be resolved. It almost happened not too long ago through the copyright infringement suit Marvel v. NCSoft Corp. (5) Had that suit not resulted in settlement, a court decision would have determined the liability of a UGC provider for copyright infringement. The court most likely would have upheld copyright holders' rights, making the UGC provider liable for secondary infringement and forcing all UGC sites to change or shut down.

   Despite conflicts between UGC sites and copyright holders, a solution exists. Striking a balance between these two competing interests represents a significant challenge comparable to that posed by the Gordian knot: (6) either spend years trying to untangle it or simply cut it with a sword. What follows is an attempt at such an Alexandrian feat.

   This Article looks at and attempts to temper--through judicial, legislative, and ultimately federal methods--the effects of UGC on copyright holders and society. Part II of this Article addresses the history, growth, and exponential expansion of UGC. Next, Part III looks at the issues that arise between copyright holders and UGC sites. Part W investigates the legal status of copyright law as it pertains to the Internet and explores how courts currently struggle to adapt copyright law to fit the online world. Since the case at issue, Marvel, involves the infringement of superhero copyrights, Part V looks at the degree of copyrightability afforded to superheroes. Analyzing the Marvel case, Part VI discusses the history of this UGC-related case and applies tests established by the federal courts to postulate a hypothetical outcome. Part VII analyzes the effects of a hypothetical decision in Marvel and proposes an alternative for the UGC copyright dilemma by using federal intervention to obviate any injustices. Lastly, Part VIII provides concluding statements.

2. THE GROWTH OF USER-GENERATED CONTENT

   1. The Birth of User-Generated Content

      Initially, the Internet consisted of nothing more than virtual bulletin boards on which users could post messages (7) consisting only of original content that users created and posted. (8) However, within a short period, the Internet changed from being originally created content to commercially produced content. (9) Then, beginning in the early 2000s, the Internet came full circle with the inception of original UGC. (10) UGC allows users, not only to use information provided online, but also to create and add their own information to what is already available, making UGC "by users for users." (11) UGC technology enables users to readily contribute to the Internet (12) while continuing to use the Internet as a source of information.

      UGC initially manifested itself through wiki pages, a cooperative encyclopedia of knowledge built with user-contributed information, (13) and blog sites, user-created online diaries. (14) The user-created data on UGC sites remain on the sites' servers, enabling other users to request and download the information. (15) While instrumental in the conception of UGC, these initial sites limited themselves to text. (16) Soon, however, the capacities of UGC sites grew in ways that enabled users to stay connected to each other through the use of text, sound, and eventually, video. (17)

   2. User-Generated Content Develops

      UGC sites appeared in droves in the early 2000S, (18) breaking away from the mold of simple text-based communication. Sites, such as Facebook (19) and MySpace, (20) allow users to send messages, upload and "tag" photos, and reconnect with long-lost asscciates. (21) While the number of users and amount of revenue generated from UGC sites grew exponentially, (22) UGC sites expanded still further into new realms, including the realm of video games. (23)

      YouTube (24)--a site where users can upload, watch, and download copies of both home-made and professionally created movies and songs (25)--currently represents the most public example of UGC sites. In 2006, talk surrounded YouTube (26) as the future of communication (27) and content interaction among individuals. (28) YouTube became such an important business and communications asset that, in October of that same year, Google acquired YouTube for $1.65 billion. (29) Since acquisition, YouTube's user base has increased eighty-four percent from previous years (30) with daily uploads of over 100 million new videos. (31)

   3. Two Types of UGC Emerge

      Despite all the praise UGC received, (32) it ultimately fractured into two types of content: lawful and unlawful. Lawful content--original UGC uploaded to a UGC site (33)--operates in accordance with copyright law. However, unlawful content--third-party-created content, such as commercial movies, uploaded by a user to a UGC site (34)--operates in violation of copyright law. This second form of UGC creates the underlying problems facing many UGC sites.

3. COPYRIGHT INFRINGEMENT DEGRADES USER-GENERATED CONTENT SITES

   Initially, UGC sites, such as YouTube, were developed to host only original content created by users. However, other sites (35) were developed specifically to host user-uploaded, third-party-created copyrighted content. While only this second group of UGC sites intended to infringe on copyright laws, the lines between the two types of UGC sites soon blurred. (36) Eventually, UGC sites that were created with no intent to host copyrighted content uploaded by users nonetheless became repositories for copyrighted material, in violation of copyright laws. Innocently created YouTube provides such an example. Shortly after its creation, YouTube stored and made available for copying thousands of pieces of user-uploaded, copyright-infringing material on its site. (37)

   Because of the uploading and downloading of copyrighted content by UGC sites' users, secondary liability may exist for UGC sites like YouTube. (38) This type of copyright law violation creates a difficult tug-of-war among copyright holders trying to protect their rights; UGC sites, which provide a desired service; and the public, which depends upon the communication outsources that UGC sites provide.

   While UGC sites provide a significant public good, they must also ensure that they safeguard the interests of all parties affected. As the backlash by copyright holders against UGC sites increases, (39) a third-party solution may provide a solution for all parties involved.

4. THE LEGAL STATE OF SECONDARY INFRINGEMENT

   The concept of unjustified income permeates law and judicial decisions. (40) For example, a neighbor cannot freely feed his cattle from another person's crop, and a worker must be paid for tasks completed. These examples delineate clearly that benefits should be compensated for when they are earned at another's detriment.

   The concept of unjustified income extends to copyright law when one party, without permission, generates a financial benefit from the copyrighted material of another. (41) Courts sometimes attempt to rectify unjustified benefit by adjusting legal concepts in the interest of fairness. (42) Currently, courts use the concepts of contributory infringement and vicarious liability as starting points to rectify this imbalance as it affects online copyright law. (43)

   1. Secondary Infringement--Defining Contributory Infringement and Vicarious Liability

      Secondary infringement stems from tort law. (44) Under secondary infringement, as opposed to direct liability, the liable party is a secondary party to the infringement, not the infringing party itself. (45) Thus, under secondary infringement, the liable party need not commit the actual copyright infringement, but only involve itself in the infringement to a significant degree. (46) Courts have applied the concept of secondary infringement to copyright law in the form of either contributory infringement or vicarious liability, or both. (47)

      In copyright law, contributory infringement and...