Cloud Computing and Copyright: New Challenges in Legal Protection? - Challenges of Information Management Beyond the Cloud - page 60

expedient remedy for individual instances of infringement, but because copyright
holders bear the burden of monitoring user activity for infringement, takedown
notices are effective only when user activity is public [2].

4.3 Fair Use

Section 107 of the U.S. Copyright Act establishes the fair use doctrine as an
exemption of copyright protection. The fair use of a copyrighted work is based on the
purpose and character of the use, and includes the use by reproduction in copies or
phonorecords for purposes such as criticism, comment, news reporting, teaching
(including multiple copies for classroom use), scholarship, or research. The following
factors are to be considered to determine fair use:

• the purpose and character of the use;

• the nature of the copyrighted work;

• the amount and substantiality of the portion used in relation to the

copyrighted work as a whole; and

• the effect of the use upon the potential market for or value of the copyrighted

work.

These four fair use factors have to be considered on a case by case basis in order to
determine if the use of copyrighted material without authorization is fair according to
the statute, and are also applicable to uses from new technologies, including cloud
computing services. Different courts have applied fair use analysis regarding ISP
liability for copyright infringement. Fair use is considered a flexible doctrine that has
evolved with the development of new technologies.
Even though users have the primary liability for copyright infringement, the ISP
could be found indirectly liable. Fair use as an exemption of copyright is extended to
ISP liability. If the user is using copyright material under any of the exemptions that
are considered fair use, the ISP cannot be found liable in this matter. Fair use works at
the periphery of copyright enforcement in the cloud, for it is an exception to the
primary act of infringement and not a separate defense against secondary liability
infringement claims [5].

5 File Sharing and Copyright Infringement

Before the development of cloud computing, the most important cases related to ISP
secondary liability were connected to file sharing and Peer to Peer (P2P).
P2P technologies are distributed systems for sharing files online. Widespread use
of computers and the Internet have reduced the cost of distributing entertainment
media and increased the access to content distribution channel. P2P allows users to
access and download copyrighted works (books, music, movies) without the author's
consent. By using specialized software, users are able to share these files.
P2P became popular in 1999 with the introduction of Napster, a central application
which allowed users to share files. Napster was sued for copyright infringement, and