STATUS CONFERENCE

INTELLECTUAL RESERVE, INC.,

PLAINTIFF,

VS.

UTAH LIGHTHOUSE MINISTRY, INC.,
A UTAH CORPORATION, ET AL.,

DEFENDANT.

CIVIL NO. 2:99-CV-808C

SALT LAKE CITY, UTAH
NOVEMBER 18, 1999

TRANSCRIPT OF STATUS CONFERENCE
BEFORE THE HONORABLE TENA CAMPBELL
UNITED STATES DISTRICT JUDGE

KIRTON & MC CONKIE
BY: TODD E. ZENGER, ESQ.
BERNE S. BROADBENT, ESQ.
1800 EAGLE GATE TOWER
60 EAST SOUTH TEMPLE
SALT LAKE CITY, UTAH 84111
(801) 328-3600

UTAH LEGAL CLINIC
BY: BRIAN M. BARNARD, ESQ.
214 EAST FIFTH SOUTH
SALT LAKE CITY, UTAH 84111
(801) 328-9531

THE COURT: GOOD MORNING. WE'RE HERE FOR A STATUS CONFERENCE IN THE MATTER OF--AND I HAVE BROUGHT THE WRONG FILE. THIS IS INTELLECTUAL LIGHTHOUSE--IF YOU'D GET MY FILE--INTELLECTUAL RESERVE VERSUS UTAH LIGHTHOUSE, 99-C-808. REPRESENTING THE PLAINTIFF IS MR. TODD ZENGER, MR. BERNE BROADBENT, AND I NOTE THE REPRESENTATIVE OF THE PARTY. REPRESENTING THE DEFENSE IS MR. BRIAN BARNARD AND THE DEFENDANTS, THE TANNERS, ARE HERE.

THE REASON THAT I ASKED FOR THIS HEARING--IT WAS ORIGINALLY SCHEDULED TO BE A HEARING ON THE MOTION FOR PRELIMINARY INJUNCTION. THEN WHEN THE DEFENSE FILED THE MOTION TO DISMISS, I THOUGHT AND I STILL DO THINK, THAT THINGS HAVE CHANGED A LOT--THAT THINGS HAVE CHANGED A LOT. AND IT WAS MY HOPE THAT WE COULD JUST CONTINUE IN PLACE THE INJUNCTIVE RELIEF THAT WAS GRANTED LAST TIME UNTIL I COULD SORT OUT THE QUESTION OF THE COPYRIGHT INTEREST.

HOWEVER, MR. BARNARD AND HIS CLIENTS DO NOT WISH TO DO THAT, AND THEREFORE I FEEL THAT WE'VE GOT TO RESOLVE SOME ISSUES BEFORE WE GO INTO THE RECESS.

MR. BARNARD: IN THAT REGARD, YOUR HONOR, MY CLIENTS ARE AGREEABLE TO ABIDE BY THE FIRST RESTRAINING ORDER.

ALL RIGHT. WE HAVE IN FRONT OF US SOME MOTIONS, AND SOME OF THESE IT SEEMS LIKE--AND I KNOW--DID YOU GET A COPY, MR. BARNARD, OF THE ISSUES FOR STATUS AND SCHEDULING CONFERENCE THAT MR. ZENGER AND MR. BROADBENT PREPARED?

THE COURT: LET'S JUST GO OVER IT AND SEE IF WE AGREE. PENDING IS THE MOTION FOR PRELIMINARY INJUNCTION. THERE'S NO DOUBT ABOUT THAT. THE DEFENDANTS' MOTION TO STRIKE IS--THAT TIES IN WITH THE MOTION FOR PRELIMINARY INJUNCTION; AM I CORRECT? IT'S A MOTION TO STRIKE THE PLAINTIFFS' REPLY IN SUPPORT OF A MOTION FOR PRELIMINARY INJUNCTION.

MR. BARNARD: THE MOTION TO STRIKE, YOUR HONOR, ONLY GOES TO PORTIONS OF THAT REPLY, SOME FACTUAL ALLEGATIONS IN IT.

MR. BARNARD: THAT HAS NOT BEEN FILED. UNDER RULE 11 THERE'S THE 21 DAY SAFE HARBOR PROVISION. THE 21 DAYS IS NOT UP UNTIL THE 5TH OF DECEMBER. THAT MOTION HAS NOT BEEN FILED, ALTHOUGH IT HAS BEEN SERVED UPON PLAINTIFF'S COUNSEL.

MR. BARNARD: AND IT RELATES TO MANY OF THE SAME ISSUES THAT ARE RAISED IN THE MOTION TO STRIKE.

THE COURT: OKAY. THE MOTION TO DISMISS, OF COURSE THAT'S STILL OUTSTANDING. IN FACT, I DON'T THINK THAT THE PLAINTIFF HAS REALLY HAD A CHANCE TO BRIEF IT, AS I UNDERSTAND IT. AND THEN WE HAVE THE DEFENDANTS' MOTION TO VACATE, WHICH IS--I DON'T KNOW. I DON'T THINK THAT I HAVE THAT. IS THAT JUST REALLY--OR I DO HAVE THAT AND IT'S SORT OF SUBSUMED IN THE MOTION TO DISMISS--IT'S THE ISSUES OF COPYRIGHT; AM I CORRECT?

MR. BARNARD: THE MOTION TO VACATE, YOUR HONOR, IS A MOTION TO VACATE THE TWO TEMPORARY RESTRAINING ORDERS, SO IT REALLY IS SORT OF A COUNTERCLAIM TO THE MOTION FOR PRELIMINARY INJUNCTION.

THE COURT: ALL RIGHT. AND I THINK--AND THERE IS NO MOTION FOR SUMMARY JUDGMENT, IS THERE, OUT THERE?

THE COURT: NOT YET, OKAY. NOT YET. HERE IS WHAT I'M THINKING. WE NEED TO RESOLVE TODAY--AND I'LL DO IT BY HEARING, ARGUMENT AND BASING MY DECISION ON WHAT I HAVE IN FRONT OF ME, AND THE RESEARCH THAT I HAVE DONE--WHETHER THIS INJUNCTION IN ITS PRESENT FORM IS GOING TO CONTINUE UNTIL THE ISSUES ABOUT MOTION TO DISMISS, WHICH REALLY IS TIED INTO A MOTION FOR PRELIMINARY INJUNCTION. I MEAN THEY ARE VERY CLOSELY RELATED, BECAUSE WHETHER THE PLAINTIFF HAS A VALID COPYRIGHT IS VERY IMPORTANT. IN FACT, IT RAISES A LOT OF PRESUMPTIONS. UNTIL THAT CAN BE FULLY BRIEFED, OR WHETHER IN FACT WE'RE GOING TO GO BACK TO THE FIRST TEMPORARY RESTRAINING ORDER, WHICH SIMPLY SAID TAKE OFF THE ALLEGED INFRINGING TEXT, OR WHETHER IT'S GOING TO GO FARTHER, AS WAS DONE IN MY SECOND ORDER.

AS I UNDERSTAND YOUR OPPOSITION, MR. BARNARD--AND I'LL WANT TO HEAR YOU ON IT--THE CRUX OF YOUR OPPOSITION TO CONTINUING THE ORDER IN EFFECT AS IT STANDS NOW IS THAT IF ANYTHING INFRINGING IS HAPPENING, IT'S IN AUSTRALIA. AM I RIGHT?

MR. BARNARD: THE THREE U.R.L.'S THAT WERE IN THE E-MAIL THAT CAUSED THE REQUEST IN THE SECOND TEMPORARY RESTRAINING ORDER, OF THOSE THREE U.R.L.'S, ONE OF THOSE IS IN AUSTRALIA, AND THERE'S SERIOUS QUESTION ABOUT THE EXTRATERRITORIAL APPLICATION OF U.S. COPYRIGHTS.

WITH REGARD TO THE OTHER TWO U.R.L.'S, THEY ARE APPARENTLY U.R.L.'S HERE IN THE UNITED STATES. WITH REGARD TO THOSE, WE GET INTO WHAT CONSTITUTES CONTRIBUTORY INFRINGEMENT, AND WHETHER OR NOT SIMPLY GIVING AN ADDRESS--NOT A LINK, BUT SIMPLY GIVING AN ADDRESS OF A U.R.L. CONSTITUTES CONTRIBUTORY INFRINGEMENT. SO WITH REGARD TO AUSTRALIA WE'RE SIMPLY DEALING WITH ONE OF THOSE U.R.L.'S.

THE COURT: TELL ME THEN, JUST FOCUSING ON THE U.R.L.'S HERE IN THE UNITED STATES, HOW DO YOU--HOW DO YOU EXPLAIN THE CASE LAW THAT SEEMS TO SAY THAT CONTRIBUTING OR ENCOURAGING PARTIES TO READ THE INFRINGING MATERIAL OR TO PARTAKE OF THE INFRINGING MATERIAL IS SUFFICIENT?

MR. BARNARD: WELL, THE FIRST CASE THAT DEALT WITH CONTRIBUTORY INFRINGEMENT IS THE GERSHWIN CASE. AND THE CASES THAT HAVE COME SINCE THEN SAY THAT FOR A PERSON TO BE GUILTY OF CONTRIBUTORY INFRINGEMENT, THEY MUST KNOW THAT THE MATERIAL IS INFRINGING, AND THEY MUST SUBSTANTIALLY OR MATERIALLY CONTRIBUTE TO THE ACT OF INFRINGEMENT. AND THAT'S THE CRUX. IT'S TO THE ACT OF INFRINGEMENT.

THE ACT OF INFRINGEMENT IS WHOEVER CREATED THOSE U.R.L.'S, AND PUT THE HANDBOOK ON THE WEB SITE, THOSE PEOPLE MAY WELL HAVE COMMITTED PRIMARY COPYRIGHT INFRINGEMENT BY DOING THAT. THEY'VE REPRODUCED THE DOCUMENT. THEY PUT IT ON THERE. THEY MAY WELL HAVE THAT--HAVE COMMITTED THAT PRIMARY INFRINGEMENT.

THE NEXT QUESTION THEN IS HAVE MY CLIENTS MATERIALLY OR SUBSTANTIALLY CONTRIBUTED TO THAT INFRINGING ACT. THE ANSWER IS NO. MY CLIENTS DO NOT KNOW THE THREE PEOPLE THAT HAVE PUT UP THOSE WEB SITES. MY CLIENTS HAVE NOT HAD ANY CONTACT WITH THEM; HAVE NOT IN ANY WAY ENCOURAGED THEM TO ENGAGE IN THAT INFRINGING ACT.

NOW, IF WE LOOK AT IT FROM THE OTHER STANDPOINT, THE WEB USERS OR THE BROWSERS THAT GO LOOKING FOR THIS, INFORMATION, IF THEY CALL UP THAT WEB SITE--THEY USE THE U.R.L., THEY CALL UP THE WEB SITE AND THEY SEE THAT INFORMATION ON THE WEB SITE, THAT IS NOT--IT'S OUR POSITION INITIALLY THAT SIMPLY VIEWING INFRINGING MATERIAL ON A WEB SITE IS NOT COPYRIGHT INFRINGEMENT.

THE COURT: AND WHAT YOU'RE SAYING BY THAT ARGUMENT THEN, MR. BARNARD, IS YOUR CLIENTS' ACTIVITY IS LIMITED SOLELY TO ENCOURAGING PEOPLE TO READ INFRINGING MATERIAL, WHICH IN AND OF ITSELF IS NOT AN INFRINGING ACTIVITY?

MR. BARNARD: AT THE WORST, THAT'S RIGHT. OUR POSITION IS SIMPLY SAYING THIS INFORMATION IS AVAILABLE AT THESE U.R.L.'S. WHETHER THAT IS THE NEXT STEP OF ENCOURAGING PEOPLE TO DO IT, I DON'T BELIEVE IT IS. AND WHEN WE LOOK AT GERSHWIN AND ITS PROGENY, IT REQUIRES SOME MATERIAL, SUBSTANTIAL ACT OR SOME AID TO AN INFRINGING ACT.

SO ASSUMING THAT JOHN Q. PUBLIC CALLS UP THAT WEB SITE, FINDS THIS INFRINGING INFORMATION, AND THEN JOHN Q. PUBLIC READS IT, WHICH I DON'T THINK IS AN INFRINGING ACT, OR THEN TAKES THE NEXT STEP AND DOWNLOADS IT, WHICH MAY WELL THEN BE AN INFRINGING ACT, AND THAT BROWSER, THAT USER BECOMES THE PRIMARY INFRINGER, WHAT HAVE MY CLIENTS DONE TO MATERIALLY OR SUBSTANTIALLY AID THE INFRINGER? THEY HAVEN'T BOUGHT THE COMPUTER FOR THEM. THEY HAVEN'T PROGRAMMED IT FOR HIM. ALL THEY'VE DONE IS SAID, "THIS INFORMATION IS AVAILABLE AT THIS ADDRESS."

AND IN MY MEMO I SUGGEST THAT'S COMPARABLE TO SAYING TO SOMEBODY, "THERE'S A PHOTOCOPY SHOP A BLOCK AWAY. AND IF YOU WANT TO GO TO THE PHOTOCOPY SHOP, THEY MAKE PHOTO COPIES." AND IF SOMEBODY HAS IN HAND A COPYRIGHTED BOOK, AND YOU'VE TOLD THEM WHERE THE COPY--PHOTOCOPY OFFICE IS--SHOP IS, YOU'VE NOT COMMITTED AN INFRINGING ACT. AND I THINK WHAT MY CLIENTS HAVE DONE IS COMPARABLE TO SIMPLY TELLING SOMEBODY WHERE A PHOTOCOPY SHOP IS.

AND I KNOW YOU'VE NOT HAD A CHANCE TO OPPOSE THIS, AND I RECOGNIZE THAT PUTS YOU AT A DISADVANTAGE, MR. ZENGER, BUT WHAT DO YOU RESPOND TO IT?

MR. ZENGER: THANK YOU, YOUR HONOR. FIRST OF ALL I'D LIKE TO MAKE A COUPLE OF COMMENTS. CONTRIBUTORY INFRINGEMENT ACTUALLY HAS TWO TYPES. ONE IS WHERE YOU--YOUR PERSONAL CONDUCT YOU ENCOURAGE PEOPLE, AND ANOTHER TYPE IS WHERE YOU PROVIDE EQUIPMENT, SUPPLIES, INK, PAPER, SOFTWARE AND THE LIKE.

AND THE INTERESTING THING THAT WE FIND ABOUT THE DEFENDANTS' ARGUMENTS IN THIS CASE IS THEY DON'T ADDRESS THE FACTS IN THIS CASE. AND LET ME GIVE YOU AN EXAMPLE. COUNSEL JUST NOW ARGUES WE DIDN'T BUY THEM THE COMPUTERS. WE DIDN'T GIVE THEM THE SOFTWARE. GREAT. WE DON'T CONTEST THAT THEY BOUGHT THEM THE COMPUTERS AND SOFTWARE, SO WE DON'T THINK THEY'RE AIDING IN THAT WAY.

BUT THEY ARE AIDING IN THEIR PERSONAL CONDUCT BY ENCOURAGING PEOPLE TO GO TO SITES WHERE THOSE COPIES ARE AVAILABLE. AND IN FACT WHEN PEOPLE WRITE TO THEM AND SAY, "I TRIED TO GO GET ONE BUT COULDN'T GET IT, WHAT DID I DO WRONG?" THEN THEY CORRECT THEM AND EXPRESSLY SHOW THEM HOW TO GO GET IT AND WHAT THEY WERE DOING WRONG BEFORE.

I WOULD LIKE TO POINT THE COURT TO ONE PIECE OF INFORMATION THAT WE BELIEVE IS HIGHLY RELEVANT TO THIS ACTION. AND, YOUR HONOR, I HAVE A COPY FOR THE COURT AND A COPY FOR MR. BARNARD. MAY I APPROACH THE BENCH?

MR. ZENGER: I HAVE PROVIDED YOUR HONOR AN EXCERPT FROM THE DIGITAL MILLENNIUM COPYRIGHT ACT IN WHICH THEY WERE ADDRESSING THE SAFE HARBOR FOR ONLINE SERVICE PROVIDERS. THOSE ARE THE PEOPLE WHO PROVIDE ACCESS TO THE INTERNET. AND IN THAT SECTION 512(D) IT STATES THAT THERE IS POTENTIAL LIABILITY FOR REFERRING OR LINKING USERS TO ONLINE LOCATIONS CONTAINING INFRINGING MATERIALS AND DOING SO BY USING DIRECTORIES, INDICES, REFERENCES, POINTERS OR HYPERTEXT LINKS. NOW, SURELY, IF THERE IS--IF THERE IS A POTENTIAL LIABILITY FOR I.S.P.'S, THEN THERE IS A POTENTIAL LIABILITY FOR THE PEOPLE POSTING THAT INFORMATION OR PROVIDING IT.

AND OUR VIEW ON THAT IS CONGRESS NOW IN 1999 HAS RECOGNIZED THE HIGHLY DAMAGING EFFECT OF STEERING PEOPLE TO INFRINGING SITES. AND IF THE I.S.P. CAN BE LIABLE, THEN MORESO THE LIGHTHOUSE MINISTRY AND THE TANNERS IN THIS CASE WOULD BE LIABLE FOR REFERRING USERS TO ONLINE LOCATIONS CONTAINING INFRINGING MATERIAL AND DOING SO USING DIRECTORIES, INDICES, REFERENCES OR POINTERS.

MR. ZENGER: THAT IS THE HOUSE REPORT WHICH INCLUDED THE WHOLE TEXT. AND IF--AND THIS IS PART OF THE ARGUMENT THAT WE WOULD LIKE TO PRESENT TO YOUR HONOR IN OUR BRIEFS. WHAT YOU DID WAS RIGHT BEFORE, YOUR HONOR. WE ARE FOCUSING ON THEIR CONDUCT. AND IN THIS CASE, AS WE SUBMITTED IN OUR EARLIER REPLY MEMORANDUM, WE HAVE EXPRESS SITUATIONS WHERE THEY'RE ENCOURAGING HAS LED PEOPLE TO THE SITE, AND NOT ONLY LED THEM TO THE SITE, BUT HELPED THEM MAKE COPIES.

NOW, THE OTHER THE ISSUE THAT WE BELIEVE THAT HAS GONE COMPLETELY UNADDRESSED IS THAT OF ADVERTISING. THERE IS A LITANY OF CASES THAT HOLD ADVERTISERS LIABLE FOR INFRINGING--FOR CONTRIBUTORY INFRINGEMENT WHEN THEY KNOW THAT A COPYRIGHTED WORK IS--KNOW THAT THERE'S A BOOTLEG COPY OR AN UNAUTHORIZED COPY AND THEY ADVERTISE THAT COPY. WE HAVE A HOST OF CASES WE WOULD ALSO LIKE TO SUBMIT TO THE COURT.

THE COURT: AND, YOU KNOW, I'VE BEEN THINKING ABOUT THAT, AND I CERTAINLY SEE THE MERIT IN THAT ARGUMENT. BUT IF YOU'RE ADVERTISING FOR A PRODUCT WHICH YOU KNOW TO BE INFRINGING, THOSE CASES THERE WAS A LINK BETWEEN THE ALLEGED CONTRIBUTORY INFRINGER AND THE ADVERTISER--AND THE INFRINGER. I MEAN THEY HAD CONTACT TOGETHER, AND WE DON'T HAVE ANY EVIDENCE OF CONTACT BETWEEN THE TANNERS AND THESE OTHER WEB SITES.

MR. ZENGER: YOUR HONOR, THERE MIGHT NOT BE A CONTRACT BETWEEN THEM, I ADMIT. BUT ONE THING THAT WE HAVE DISCOVERED, AND WHICH WE ALSO INTEND TO FILE IN OUR RESPONSE TO THE CONTRIBUTORY INFRINGEMENT MATTER, IS WE HAVE E-MAILS GOING BACK AND FORTH FROM THE TANNERS TO THE SAME NEWS GROUPS AT WHICH, FOR EXAMPLE, THE AUSTRALIAN SITE IS POSTING MATERIAL. THERE IS CONTACT. THEY'RE JUST NOT TALKING WITH EACH OTHER. BUT THE AUSTRALIAN WEB SITE OWNER PUTS SOMETHING UP ON THE NEWS GROUP, AND EVERYBODY KNOWS ABOUT IT, INCLUDING THE TANNERS. AND THEN THE TANNERS POST SOMETHING UP TO THAT SAME NEWS GROUP THAT RESPONDS TO IT. AND THEY ARE FEEDING OFF OF EACH OTHER.

BUT WE STILL BELIEVE THAT THE ADVERTISING APPLIES BECAUSE THE PRIMARY ISSUE INVOLVED IN THE ADVERTISING IS KNOWING THAT--THAT WHAT THEY'RE ADVERTISING IS INFRINGING. AND IN THIS CASE THE REASON WHY WE BELIEVE THAT THEY HAVE MISSTATED THE CASE LAW IS LOOK AT THE CASES THAT HAVE BEEN CITED. IN EACH CASE IT'S EITHER AN I.S.P. OR AN ADVERTISING AGENCY, AND IT'S RELATED TO A CASE THAT REQUIRES MUCH MORE INVOLVEMENT.

FOR EXAMPLE, PUTTING ON A PUBLIC DISPLAY. TO PUT ON A ON A CONCERT, THERE'S A LOT OF INVOLVEMENT; OR TO MAKE AND SELL UNAUTHORIZED RECORDS. SURE, YOU HAVE TO MANUFACTURE THEM. YOU HAVE TO MARKET THEM. YOU HAVE TO SELL THEM. THAT REQUIRES MORE CONDUCT BECAUSE MORE THINGS HAVE TO BE DONE TO INFRINGE.

BUT LOOK AT THIS CASE; INFRINGEMENT HAPPENS AT THE CLICK OF AN ELECTRONIC BUTTON, AND THEY HAVE FACILITATED EVERYTHING NECESSARY FOR SOMEONE TO GO AND CLICK THAT BUTTON, AND THEY HAVE DONE THAT FOR PEOPLE WHO OTHERWISE DIDN'T KNOW ABOUT IT. THAT IS WHY THEIR CONDUCT HERE IS SUBSTANTIAL AND MATERIAL. THEY TELL EVERYBODY EVERYTHING TO DO, RIGHT UP TO CLICK THAT BUTTON, AND THAT'S ALL INFORMATION THAT PEOPLE DIDN'T HAVE BEFORE THE TANNERS PUBLICIZED IT OR TAUGHT THE WORLD HOW TO DO IT. SO WHAT THEY'RE SAYING IS THEY'RE WALKING PEOPLE RIGHT UP TO THE TROUGH AND SAYING, "DRINK RIGHT THERE," WHEN THEY DIDN'T KNOW THEY COULD DRINK THERE BEFORE.

WE BELIEVE THEIR CONDUCT IS SUBSTANTIAL AND MATERIAL IN THIS CONTEXT BECAUSE THE ACTUAL INFRINGEMENTS HAPPEN IN AN INSTANT, AT THE CLICK OF AN ELECTRONIC BUTTON. AND WE BELIEVE, THEREFORE, THAT YOUR TEMPORARY RESTRAINING ORDER ON NOVEMBER 10TH WAS RIGHT, IS RIGHT AND SHOULD REMAIN IN PLACE UNTIL THE MOTION TO DISMISS IS ADDRESSED.

MR. BARNARD: THIS CASE HAS BEEN AN OPPORTUNITY FOR ME TO LEARN A LOT ABOUT THE INTERNET, AND I THINK WE NEED TO BE VERY CAREFUL WITH THE WORDS THAT WE'RE USING IN DESCRIBING THE INTERNET. OPPOSING COUNSEL HANDED YOUR HONOR A STATUTE THAT DEALS WITH I.S.P.'S, INTERNET SERVICE PROVIDERS, AND SAYS THEY CAN BE HELD LIABLE. AND THAT'S THE NETCOM CASE WHICH WE CITE. NETCOM WAS AN INTERNET SERVICE PROVIDER.

AND THE COURT SAID, YES, IF YOU PROVIDE THAT SERVICE, IF YOU HOST A WEB SITE, AND YOU'RE TOLD THAT THERE'S INFRINGING INFORMATION ON IT, YOU MAY BE LIABLE FOR IT, AND THAT'S WHAT THAT STATUTE PROVIDES. THAT'S NOT MY CLIENTS. MY CLIENTS ARE NOT I.S.P.'S. THEY ARE NOT INTERNET SERVICE PROVIDERS.

THE COURT: WHAT DO YOU THINK IS THE PRACTICAL RESULT? I MEAN WHAT'S THE PRACTICAL DIFFERENCE? WHY WOULD THERE BE SUCH A DIFFERENT STANDARD THEN, MR. BARNARD?

MR. BARNARD: OH, BECAUSE AN I.S.P., YOUR HONOR, IS COMPARABLE TO THE CONCERT GROUP IN THE GERSHWIN CASE. THE CONCERT GROUP SUPPORTING THE INFRINGERS IN THE GERSHWIN CASE SET UP THE CONCERTS; SAID, "WE'LL PRINT THE PROGRAMS. WE'LL ARRANGE FOR THE CONCERTS."

THE SWAP MEET OWNER IN THE FONOVISA CASE SETS UP THE PROGRAM; SAYS, "WE'RE GOING TO HAVE THE SWAP MEET." AND THEN THE BOOTLEG RECORD COMPANIES OR RECORD SELLERS COME IN AND SELL THEM. SO THE I.S.P. IS COMPARABLE TO THE CONCERT PROMOTING GROUP, COMPARABLE TO THE SWAP MEET OWNER. WHAT WE HAVE HERE IS SIMPLY THE TANNERS SAYING THAT INFORMATION IS AVAILABLE. AND THE LIABILITY FOR THE I.S.P. IN THAT STATUTE IS MUCH DIFFERENT THAN WHAT MY CLIENTS HAVE DONE.

OPPOSING COUNSEL ALSO SAID MY CLIENTS HAVE DONE EVERYTHING AND THEN SIMPLY TOLD THE PEOPLE TO CLICK AND THEY CAN GET TO THAT INTERNET SITE. THAT'S NOT CORRECT. THAT IS WHAT'S CALLED A LINK. IF YOU'RE ON AN INTERNET SITE, THERE WILL BE AN ICON; YOU CLICK ON THAT ICON AND YOU ARE LINKED, AND YOU AUTOMATICALLY GO BY ONE CLICK TO THE OTHER WEB SITE.

AND IN THAT STATUTE THAT HE HANDED YOUR HONOR IT SAYS AN I.S.P. CAN BE HELD LIABLE IF THERE IS LINKING, OR IF THERE'S REFERRING. MY CLIENTS HAVE NOT DONE THAT. THEY DON'T HAVE A LINK. THEY'VE NEVER HAD A LINK ON THEIR WEB SITE. THEY SIMPLY GAVE AN ADDRESS.

THE COURT: BUT THEN ALL THAT HAPPENS IS THE POTENTIAL VIEWER JUST SIMPLY TYPES IN THAT ADDRESS; INSTEAD OF GOING CLICK, IT'S TYPE AND CLICK. IS THAT SUCH A BIG DIFFERENCE?

MR. BARNARD: YES, IT IS. AND, YOU KNOW, OPPOSING COUNSEL SAYS, "WELL, SOMEBODY CONTACTED THE CLIENTS AND SAID, 'I DIDN'T HAVE THE CORRECT ADDRESS FOR THE THE U.R.L. WHAT SHOULD 1 DO?' " AND THE TANNERS SAID, "WELL, YOU KNOW, TYPE IN W.W. AT THE BEGINNING."

THAT'S COMPARABLE AGAIN TO MY ANALOGY OF THE PHOTOCOPY SHOP. I TELL THE MAN THERE'S A COPY SHOP A BLOCK DOWN HERE. HE COMES BACK TO ME AND SAYS, "I CAN'T FIND IT." AND I SAID, "WELL, THE EXACT THE ADDRESS IS SUCH AND SUCH." THAT IS NOT AGAIN A MATERIAL, SUBSTANTIAL AID TO THE INFRINGING ACT. THE INFRINGING ACT IS WHEN THAT MAN IS GOING TO BE IN THE PHOTOCOPY SHOP ACTUALLY MAKING THE COPIES. AND FOR ME TO TELL HIM WHERE THE PHOTOCOPY SHOP IS IS NOT CONTRIBUTING.

THE COURT: WHAT IF THOUGH--I MEAN ADDING TO YOUR HYPOTHESIS OR YOUR STORY, IF THE PERSON WHO IS GOING TO GIVE THE DIRECTIONS KNOWS WHAT THE MAN NEEDS THE COPY SHOP FOR, KNOWS HE'S GOING TO GO IN AND MAKE COPIES OF INFRINGING MATERIAL, WOULD THAT BE DIFFERENT?

MR. BARNARD: NO, NOT UNLESS--NOT UNLESS THERE'S SOME RELATIONSHIP; NOT UNLESS THERE IS SOME ADDITIONAL RELATIONSHIP. YOU KNOW, AGAIN, IF A PERSON--A STRANGER COMES UP TO ME AND SAYS, "I'VE GOT THIS--I'VE GOT THIS MANUSCRIPT FOR A MOVIE AND WE'RE GOING TO MAKE A FORTUNE"--AND IT'S COPYRIGHTED--"TELL ME WHERE I CAN PHOTOCOPY IT." AND I SAY, "GO DOWN THERE." I'M NOT--I'M NOT ACTIVELY PARTICIPATING IN THE ACT OF INFRINGEMENT.

THE ACT OF INFRINGEMENT--AND, AGAIN, IN OUR MEMO WE LIST WHAT IS PROTECTED BY A COPYRIGHT. AND ONE OF THE THINGS THAT'S PROTECTED BY A COPYRIGHT IS THE RIGHT TO THE REPRODUCTION OF THE DOCUMENT, A REPRODUCTION OF THE MANUAL. THAT'S THE INFRINGING ACT. READING IT IS NOT AN INFRINGING ACT.

SO IF I SAY TO SOMEBODY, "THERE IS--I'VE JUST DISCOVERED THAT IN THE MARRIOTT LIBRARY AT THE UNIVERSITY OF UTAH THERE IS A BOOK THAT SHOULDN'T BE THERE." AND I SAY TO PEOPLE, "YOU CAN GO UP TO THE LIBRARY AT THE 'U' AND READ THAT BOOK," HAVE I MATERIALLY AIDED THEM IN THE INFRINGING ACT? THERE ISN'T AN INFRINGING ACT BECAUSE SIMPLY READING THAT IS NOT AN INFRINGEMENT. AND ME TELLING THEM TO GO TO THE MARRIOTT LIBRARY AND READ THAT IS NOT AIDING THEM, HELPING THEM IN ANY WAY IN ANY INFRINGING ACT.

THE COURT: WHAT IF I HAD SOME IDEA THAT NOT ONLY WERE THEY GOING TO GO TO THE LIBRARY AND READ, BUT THEY WOULD VERY LIKELY MAKE SOME COPIES, WHICH IS AN INFRINGING ACT?

MR. BARNARD: WELL, THAT'S SPECULATION. AND, YES, YOU KNOW, YOU HAVE AN IDEA THAT'S GOING TO OCCUR. WHAT'S BEFORE YOUR HONOR IS THE VERY VERY DRASTIC REMEDY OF A TEMPORARY RESTRAINING ORDER, A PRELIMINARY INJUNCTION. AND THIS COURT HAS BEEN ADMONISHED BY THE TENTH CIRCUIT IN THE CASE LAW THAT YOU ONLY GRANT A TEMPORARY RESTRAINING ORDER WHEN THERE IS A SUBSTANTIAL LIKELIHOOD OF PREVAILING ON THE MERITS. AND IN THIS CASE I DON'T THINK WE HAVE THAT.

YES, WE HAVE ALL THESE INTERESTING ISSUES, AND I'M SURE WE'RE GOING TO ALL LEARN A GREAT DEAL ABOUT THE CHURCH HANDBOOK AND ITS HISTORY, AND WE'RE GOING TO LEARN A GREAT DEAL ABOUT INTERNET, BUT WHAT WE'RE SAYING IS IS THEIR CASE STRONG ENOUGH TODAY THAT YOUR HONOR SHOULD ISSUE A PRELIMINARY INJUNCTION?

THE COURT: WELL, I'M NOT VIEWING THIS AS A PRELIMINARY INJUNCTION. LET ME JUST TELL YOU WHAT I'M DOING NOW. I'M TRYING TO DECIDE WHETHER, AT LEAST UNTIL AT THE VERY EARLIEST MAYBE TOMORROW OR MONDAY, WHAT'S GOING TO BE THE ORDER. AND WHAT I'M CONSIDERING THIS IS BEFORE WE HAVE OUR HEARING, ARE YOU GOING TO HAVE THE FIRST ORDER OR THE SECOND ORDER UP? AND I'M GOING TO VIEW THIS NOW AS JUST A HEARING ON THE TEMPORARY RESTRAINING ORDER. AND I'M GOING TO NEED A DAY OR TWO TO THINK ABOUT THAT, ALL RIGHT?

MR. ZENGER: I'D LIKE TO PROVIDE YOUR HONOR SOME HELP ON THESE ANALOGIES THAT MR. BARNARD HAS CHOSEN. HE SAYS A STRANGER IS WALKING DOWN THE STREET WITH A BOOK IN THEIR HAND AND THEY SAY, "WHERE CAN I MAKE A COPY?" THAT'S NOT THIS CASE. PEOPLE AREN'T ASKING HOW THEY CAN MAKE COPIES OF SOMETHING THEY ALREADY HAVE.

PEOPLE--THE FACTS IN THIS CASE WOULD BE A STRANGER IS WALKING DOWN THE STREET, AND THE TANNERS ARE HOLDING UP A SIGN SAYING, "I HAVE BOOTLEG COPIES OR I KNOW WHERE YOU CAN GET THEM. HERE, LET ME GIVE YOU THE INFORMATION." THAT'S WHAT'S GOING ON HERE.

AND, SECONDLY, THIS IDEA OF HAVING A BOOK UP AT THE LIBRARY THAT YOU CAN GO READ. THAT HAPPENS TO BE AN AUTHORIZED COPY THAT'S AT THE LIBRARY BECAUSE THE LIBRARY BOUGHT IT, AND LIBRARIES ARE ALLOWED TO CHECK BOOKS OUT. THIS IS A CASE WHERE WE HAVE AN UNPUBLISHED WORK THAT THEY ARE ADVERTISING, AND THEY ARE INDUCING PEOPLE AND CAUSING PEOPLE TO GO TO THAT LOCATION TO MAKE INFRINGING COPIES. THANK YOU.

THE COURT: OKAY. LET ME JUST DO THIS. LET ME SPEAK WITH MY CLERK JUST A LITTLE BIT, BECAUSE THEN I CAN GIVE YOU ALL AN IDEA OF HOW QUICKLY I CAN MAKE A DECISION ON WHAT I VIEW NOW AS MOTION TO CONTINUE THE TEMPORARY RESTRAINING ORDER. ALL RIGHT? THEN WE'LL SET DOWN A BRIEFING SCHEDULE FOR THE REST. SO LET'S TAKE ABOUT A FIVE MINUTE BREAK.

THE COURT: ALL RIGHT. HERE IS WHAT I'M GOING TO DO. I'M GOING TO KEEP THE ORDER AS IT STANDS IN PLACE. HOWEVER, BY THE END OF BUSINESS TOMORROW YOU WILL HAVE A NEW WRITTEN ORDER EITHER TELLING WHY I'M GOING TO CONTINUE IT IN PLACE OR WHY I'M GOING TO VACATE IT. AND AS I UNDERSTAND IT, IF I VACATED IT, MR. BARNARD, YOU AND YOUR CLIENTS HAVE NO OBJECTIONS TO IT GOING BACK TO THE FIRST ORDER; AM I RIGHT?

THE COURT: ALL RIGHT. SO WHAT I'M DOING NOW IS I'M JUST SAYING RATHER THAN DISTURB THE STATUS QUO FOR THE 24 HOURS, I'M GOING TO KEEP IT RIGHT LIKE IT IS. I'M GOING TO MAKE A DECISION ON WHETHER TO CONTINUE THE T.R.O. IN PLACE UNTIL WE HAVE THE HEARING ON THE PRELIMINARY INJUNCTION, AND I WILL TELL YOU MY ANSWER ON THAT TOMORROW BY END OF BUSINESS.

THE COURT: THEN--AND I RECOGNIZE YOU'VE NOT HAD A CHANCE TO BE HEARD IN YOUR REPLY, SO I'M GOING TO TELL YOU WHEN I'M GOING TO HAVE THE HEARING ON THE PRELIMINARY INJUNCTION. AND I KNOW THAT YOU WILL WANT TO FILE YOUR REPLY BY THEN. IF YOU WISH TO FILE IT BEFORE I MAKE MY DECISION ON THE T.R.O., YOU MAY DO SO, BUT KNOW THAT I'M GOING TO BE WORKING ON IT TODAY AND TOMORROW, AND SO THAT'S UP TO YOU.

ON NOON ON TUESDAY THE 23RD, THAT'S WHEN I'D LIKE TO HAVE THE HEARING ON THE PRELIMINARY INJUNCTION. IS THAT GOING TO WORK?

THE COURT: YES. AND THAT'S A FUNNY TIME, BUT WE'RE GETTING NEAR THANKSGIVING, AND--IS THAT GOING TO WORK? SO WHAT--I HAVE TWO THINGS THAT I'LL BE CONSIDERING. NOW I'LL BE CONSIDERING WHETHER TO CONTINUE THE T.R.O. UNTIL TUESDAY, AND IT WILL STAY THERE UNTIL I MAKE UP THAT DECISION, AND UNTIL I MAKE MY COMPLETE DECISION, AND THEN WE'LL CONSIDER ON THE 23RD PRELIMINARY RELIEF. HOW DOES THAT WORK?

MR. ZENGER: FINE. IS IT SUFFICIENT IF WE HAVE OUR BRIEF TO YOUR HONOR ON MONDAY?

THE COURT: YES. KNOW THAT I WILL MAKE MY DECISION ON--IF THE T.R.O. IS GOING TO LAST WITHOUT IT, BUT I THINK I HAVE ENOUGH FROM YOUR OR[AL] ARGUMENTS AND THE WRITTEN MATERIALS TO MAKE THAT DECISION.

THE COURT: OKAY? THEN THE MOTION TO DISMISS, BECAUSE IT SEEMS LIKE WE'VE KIND OF SHIFTED GEAR, AND THE FOCUS ON WHETHER THERE'S GOING TO BE A SUBSTANTIAL LIKELIHOOD OF SUCCESS IS MORE ON WHETHER THE TANNERS' ACTS REALLY ARE CONTRIBUTING TO INFRINGEMENT THAN TO THE VALIDITY OF THE--THE VALIDITY OF THE COPYRIGHT.

AND LET ME TELL YOU, MR. BARNARD, ALTHOUGH CERTAINLY THAT'S NOT THE DISPOSITIVE WORD FOR THE MOTION TO DISMISS, THE RESEARCH THAT I DID SINCE GETTING THAT INDICATES THAT GIVEN THE FACT THAT THERE IS A PRESUMPTION OF A VALID COPYRIGHT, GIVEN THE FACT THAT THEIR DERIVATIVE--THE PLAINTIFF'S DERIVATIVE OR COMPOSITE WORK SEEMS TO BE BASED ON A COMPILATION OF THEIR OWN COPYRIGHTED MATERIAL, I FEEL THAT FOR PURPOSES OF A PRELIMINARY INJUNCTION THEY DO HAVE--THEY'VE MADE THE SHOWING THAT THEY DO HAVE A VALID COPYRIGHT.

NOW, THAT MIGHT BE REVERSED. AND IF IN JANUARY I DECIDE THAT THEY DO NOT, THEN I OF COURSE WOULD VACATE THE PRELIMINARY ORDER. BUT CUR FOCUS RIGHT NOW SEEMS TO BE--AND IT DOES SORT OF CHANGE--THE FOCUS SEEMS TO BE IS WHAT YOUR CLIENT DOING CONTRIBUTING TO AN INFRINGEMENT?

MR. BARNARD: YOU ARE, YOUR HONOR. THE PROBLEM IS SOMETHING I BROUGHT UP BEFORE, IS THAT'S NOT ALLEGED IN THE COMPLAINT AT ALL.

THE COURT: WELL, I THINK--AND I UNDERSTAND WHAT YOU'RE SAYING. HOWEVER, I THINK BY SAYING THEY HAVE A VALID COPYRIGHT, I THINK THAT FOR PURPOSES OF WHAT I'M CONSIDERING NOW AND THE FACT THAT YOU CERTAINLY--BECAUSE YOU WERE ABLE TO BRING IT UP, YOU CERTAINLY ARE ON NOTICE OF THE KIND OF WORK. I THINK IT'S SUFFICIENT, AT LEAST FOR PURPOSES OF PRELIMINARY RELIEF.

ALL RIGHT. SO THE FOCUS OF WHAT WE'LL BE TALKING ABOUT ON THE 23RD WILL BE IS WHAT THE TANNERS DOING CONTRIBUTING? WE WILL LEAVE TO THE JANUARY HEARING, AND MS. BROWN WILL GIVE US THE DATE, MOTION TO DISMISS, WHETHER IN FACT THERE'S A VALID COPYRIGHT.

THE COURT: AND THAT'S ON THE DEFENDANTS' MOTION TO DISMISS. NOW, IF OTHER THINGS HAVE COME UP THAT RELATE TO IT--AND CERTAINLY WE'LL TALK ABOUT THE MOTION TO STRIKE BECAUSE THAT'S PART OF IT. AND I THINK--IF IN FACT WE WANT TO TALK ABOUT THE MOTION FOR SANCTIONS, WE'LL DO THAT. BUT IF THERE'S AN ADDITION, I'LL LET YOU KNOW IN TIME, AND IT WOULDN'T BE UNLESS IT WAS FULLY BRIEFED. OKAY?

SO I WILL--WHAT I WILL DO IS WE HAVE YOUR FAX NUMBERS; SOMETIME TOWARD THE END OF THE DAY TOMORROW I WILL SEND YOU MY FAX THE ORDER AND I WILL FILE IT. THE T.R.O. AS IT IS NOW STAYS IN EFFECT, SO DON'T GO CHANGING YOUR WEB SITE, ALL RIGHT? KEEP IT AS IT IS.