It does seem that a large portion of the emerging field of Internet law is driven by efforts to protect the commercial value of intangible property. You can't really touch the essence of a copyright, a trademark or a patent. The real value behind intellectual property rights is that the "owner" has the legal right to restrict how other people use the material. That key attribute is why the vaults at Disney Studios may be worth billions on the company balance sheets when in reality the celluloid that makes up the reels of classic films is worth a pittance.

Coca Cola is another familiar example. A large part of the value of that corporation is bound into the right to use a specific formula for making a soft drink that is probably written on a single piece of paper in a bank vault somewhere. Supposedly only one or two people have access to that piece of paper. The paper and ink are worth maybe a fraction of a cent, but the right to use the information to make a soft drink may be on the company balance sheet for billions.

On the other hand, the rights held by the owner of intellectual property are not absolute. Both the statutes and court decisions recognize limits. For example, intellectual property rights can expire. The law also provides for fair use exceptions to the owner's rights before the copyright expires. There are great Web sites that provide the basics of the intellectual property law. For copyright information try the Copyright Office of the Library of Congress at http://www.loc.gov/copyright/.

Let's look at some recent court cases that involve disputes over use of specific content on a Web site. Trust me, Disney, Coca Cola and Sony Pictures and many others will spend millions to protect the right to control what use is made of their intellectual property. They may send you a demand that you cease and desist from posting the information even if you don't charge for it. To the owner, it may be a matter of principle or it may be something else. But whether or not you profit from use of their product is but one of the elements in determining the legality of the use. An interesting twist in two recent cases is that they involved search engines and links to protected material. In one case, Kelly v. ArribaSoft Corporation, the Ninth Circuit Court of Appeals dealt with the practice of a Web search engine site that specializes in graphics. The plaintiff was a professional photographer that held the copyright to landscape photographs and he sued the owners of the search engine because the Web site displayed small, thumbnail copies of his photos in addition to links to the original works on his site. (The search engine is now known as Ditto.com.) The thumbnails were copies of the entire photo but were in a very low resolution. By clicking on the thumbnail, the web user was taken to either a full-size copy of original from Kelly's site or a copy was presented in a frame within Arriba's Web page.

The Court focused on two aspects of the case and ruled that part of the site did violate Kelly's rights but that the use of small, thumbnail copies of the original works of art were not infringing. In the Court's opinion, it applied the four characteristics of fair use and found that the small images were so transformed that they formed an entirely different use than Kelly's original art. The four general factors are 1) the purpose and character of the use, 2) the nature of the copyrighted work, 3) the amount and substantiality of the portion used, and 4) the effect of the use upon the potential market for, or value of, the copyright work.

In Kelly's case the Court felt that his photos were art but the images on the search engine were deliberately altered to prevent their use as art. Even if the thumbnails were captured and enlarged, the Court found, "any enlargement results in a significant loss of clarity of the image, making them inappropriate as display material." The thumbnail images were not art.

Kelly did win on another point, however. It was an infringement of his rights for the search engine to provide in-line links that tended to confuse the viewer about the origin of the graphic. That tripped over another right held by the copyright owner – the right to publicly display the work. Clicking on the thumbnail brought up a full size copy of the image. The graphic file was actually retrieved from Kelly's site but the person viewing the image would not have known that. Here, the image wasn't "copied" so they were not guilty of unlawful copying, but they were liable for damages for the public display of the work. The rule to remember is that if you include graphics or music files in your Web site you must not only make sure you can legally copy the material, you must also obtain the necessary licenses to publicly display or perform the work even if you don't make new copies.

I have a question for you. What do you expect to get back when you type a phrase into a Web search engine? You might be surprised at the answer if you think it is a list of the closest matches to the phrase you entered. You may get a list that is also influenced by payments for preferential listings. The second search engine case is just beginning and it involves a San Antonio company, Mark Nutritionals Inc. that advertises heavily on the radio. It seems like every radio announcer in America has a weight problem and they are all taking one of the Body Solutions weight loss products. I've heard the same commercials from DJ's in other cities and they all refer the listeners to the San Antonio company and its products. But on the Web it may be different. The lawsuit alleges that if you type that trade name, Body Solutions, into any one of several Web search engines you may never find the real company. The plaintiff alleges that search engines have been paid by other companies to place these other products higher in the results list. The industry calls it "pay for placement." The suit claims that four companies, AltaVista, Kanoodle, FindWhat and Overture, owe it a combined $10 million in actual damages for using its product name to direct Web viewers to another company's product.

The Plaintiff may have already received some benefit because in preparing this article I tested the four search engines and had mixed results. In some cases it was now easy to find a link to the official Body Solutions Web site. In others, it was not easy at all. So, if the main purpose was to ensure that Web viewers find the Body Solutions Web page, then that may have already been accomplished.

I'll try to keep an eye on the progress of the case and include updates when possible.