San Jose Mercury
11/27/95

By Elizabeth Wasserman

SAN JOSE -In an unprecedented decision, a federal judge in San Jose has
ruled that Netcom On-Line Communication Services, Inc. may be held liable 
for alleged copyright infringements by a subscriber who posted 
the Church of Scientology's sacred texts on the global Internet.

   The company, which provides Internet access to 
subscribers, had sought to be dropped from a federal
 lawsuit that the church filed this year against a 
former Scientology minister-turned-critic whose 
""pulpit'' is now an electronic discussion group 
known as alt.religion.scientology.

   In a case that some feared could stifle free speech 
on the Internet, the church claimed that Netcom 
should have taken steps to prevent the critic, Dennis
Erlich, 48, of Glendale, from posting the excerpts of 
copyrighted works by the religion's late 
founder, L. Ron Hubbard. Erlich posted the material 
on a computer bulletin board that used the Netcom 
service to reach the Internet.

   Free-speech advocates have argued that services 
like Netcom cannot and should not be held liable for 
the millions of messages that cross the Internet, any 
more than telephone companies are responsible for 
the content of phone conversations.

   But U.S. District Court Judge Ronald M. Whyte 
last week refused to drop Netcom and the bulletin 
board operator from the case. Whyte agreed with 
the Scientologists that the Internet access provider 
may be liable for ""contributory infringement'' if it 
can be proven the company knew about the copyright 
violations and neglected to prevent the recurrence 
and remove the passages.

   ""Because Netcom was arguably participating in 
Erlich's public distribution of plaintiffs' works, 
there is a genuine issue as to whether Netcom knew 
of any infringement by Erlich before it was too late 
to do anything about it,'' the judge wrote in a 
32-page decision dated Nov. 21.

   When the case goes to trial next year, the church-
affiliated Religious Technology Center is expected 
to argue that it warned Netcom that Erlich was 
posting copyrighted information.

   If that is so, the judge wrote, ""Netcom will be 
liable for contributory infringement since its failure 
to simply cancel Erlich's infringing message and 
thereby stop an infringing copy from being distributed 
worldwide constitutes substantial participation in 
Erlich's public distribution of the message.''

   The Church of Scientology, which estimates membership
 at 8 million, has waged a vigorous -- and 
controversial -- campaign to stop critics from publishing 
its copyrighted materials on the Internet. 
Church leaders have filed a bevy of lawsuits and, in 
a flurry of raids, have accompanied authorities into 
the homes of their most prolific critics, seizing computers 
and disks. Critics claim the church is attempting to silence them.

   Legal experts have been awaiting this decision 
because it marks the first time a federal judge has 
ruled whether an Internet access provider should be 
held responsible for the copyright infringements by 
a subscriber. Members of the Electronic Frontier 
Foundation, a non-profit group that lobbies for computer
users' civil rights, have said that such a ruling 
would have a chilling effect on free speech in cyberspace, 
as it would reduce the number of on-line 
providers willing to take on the liability for policing 
subscribers' use of copyright material.

   ""It has the potential of having a significant impact 
if other judges follow Judge Whyte's reasoning,'' 
Netcom's attorney, Randolf Rice of San Jose, 
said Sunday. ""Then access providers will need to 
act immediately anytime someone claims that their 
works are being infringed on the Net.''

   Rice said he will discuss with his clients whether 
to appeal Whyte's ruling to the Ninth U.S. Circuit 
Court of Appeals.

   The attorney for the bulletin board operator could 
not be reached for comment.

   But the ruling was praised by a lawyer for the 
Scientologists.

   In preliminary depositions, Netcom officials have 
already said that they have suspended subscribers 
who have posted pirated software, child pornography, 
and even off-topic postings to news groups on 
the Internet. The church's lawyer, Helena Kobrin of 
North Hollywood, said the church is asking for 
similar treatment for copyright violators.

   ""We recognize that for an access provider to 
monitor everything coming through this system 
would create havoc and would be virtually impossible,''
Kobrin said. ""The principle that we've argued 
is that when they are notified of copyright violations 
or trade secret misappropriations that they 
have an obligation to do something about it. This is 
the point the judge agrees with.''

   Kobrin said she has been involved with on-line 
service providers in discussions about setting up 
some sort of ""virtual magistrate'' to mediate copyright 
infringement cases in cyberspace to prevent 
many from going to court.