Tasked with formulating a legal definition of “hard-core pornography” in 1964, U.S. Supreme Court Justice Potter Stewart demurred with the famous observation “I know it when I see it.”1 Fifty years later, intellectual property lawyers might be forgiven for falling back on some similar formulation when asked to advise their clients on copyright infringement. Infringement analysis has always been a complex and fact-intensive exercise, and recent developments in the case law, statutes and regulatory environment have made these problems so knotty that practitioners may be tempted to fall back on experience to supplement their usual factual and legal review. Yet even for experienced lawyers, outcomes are increasingly difficult to predict. Today, a business model that looks problematic may be saved by—among many other things—the fair use doctrine, a statutory safe harbor provision, a judicially created exception (such as “substantial non-infringing use”), a compulsory license, or even a change in the technology used to implement it.
This complexity and flexibility has benefits. It enables copyright law to adapt to the rapid social and technological change around the works it is designed to protect. But it also means that the line between legitimate service and actionable infringement can get fairly blurry, sometimes making innovation a dangerous (and expensive) gamble. Nowhere is this more evident than in the developing fields of content delivery and cloud services.
The Demand for New Services
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