Copyright Chronicle

Vicarious Liability Upheld For Public Performance

2012-01-13T11:46:00.000-05:00

In an unpublished decision by the Ninth Circuit Court of Appeals, the Court upheld copyright infringement claim for the public performances of copyrighted musical compositions. Range Road Music, Inc. v. East Coast Foods, Inc. (Case Nos. 10-55691 and 10-55800 – 9th Cir. Court of Appeals – Jan. 12, 2012 decision). An investigator testified that Coltrane standards were being performed by a live band at the Sea Bird Jazz Lounge and that a disc jockey played four Hiroshima songs from a CD.

Defendants claimed that the investigator’s report and declaration should be inadmissible as he was not an expert witness. However, the Court rejected the claims finding that “identifying popular songs does not require “scientific, technical, or other specialized knowledge” under F.R.E. 702.

In addition, Defendants East Coast Foods, Inc. and Herbert Hudson claimed that they could not be liable for vicarious infringement because the Sea Bird Lounge was owned by an independent corporation – Shoreline Foods. The Court rejected this claim finding that Defendants exercised the requisite control over the direct infringer and derived a financial benefit from the public performances. The liquor license at the Sea Bird Jazz Lounge was owned by East Coast Foods. Defendant Hudson was the president of both East Coast Foods and Shoreline Foods including the authority to hire and fire employees and to prevent acts from appearing at Sea Bird Jazz Lounge. The fact that Hudson had the legal and practical right to stop the infringing conduct played a factor in establishing vicarious liability.

The Court also noted that the Defendants could have purchased an ASCAP license as ASCAP had urged them to over the last 7 years.

Off the Naughty List

2012-01-11T12:40:00.000-05:00

This past holiday season has proved that that checking the list twice paid off.

The U.S. Government has removed Baidu from its Naughty List.

See my previous posts for more information on the Naughty List and Baidu.

It seems that Baidu’s efforts to clean up music piracy on its website contributed to the removal from the government’s list. Baidu entered into a license agreement with recording companies which according to reports included a royalty payment system.

The influence of the Recording Industry cannot be underestimated if Baidu can be removed from the government’s notorious list by reaching a settlement with music companies.

Black Market Friday

2011-12-16T15:47:00.000-05:00

The U.S. government stepped up its enforcement against counterfeit copyrighted products such as DVDs again, shutting down over 100 domain names where counterfeit and pirated goods were being offered. This is in addition to other seizures that took place throughout the year.

The websites are replaced with notices that the website has been taken down as part of a seizure. As the government steps up its enforcement and ability to take down domain names, will private parties be able to take advantage of such remedies as domain name seizures in the future?

Copyright Office Publishes To-Do List

2011-12-11T12:32:00.000-05:00

Last month, the Register of Copyrights released “Priorities and Special Projects Of The United States Copyright Office.”

The paper includes 17 priorities and 10 special projects that the Copyright Office will focus on for the next 2 years.

Three studies are proposed:

(1) Mass book digitization

This study largely stems from the Google Book Search litigation. (See previous blog entries here.) Some of the issues being researched include the Section 108 library and archive exceptions in digitalization, the current landscape and marketplace, addressing the issue of orphan works, and how to facilitate digitalization through licensing. It seems that the U.S. Copyright Office would like a say in the Google Book litigation but unlike Google, it seems that the U.S. government has additional considerations.

(2) Legal treatment of pre 1972 sound recordings

This is a goal raised previously as to how to treat pre-1972 sound recordings that were not covered by federal copyright. One issue is how to cover these works under federal law. (It is possible that there may the decision in Golan v. Holder may have an impact.) Another major issue is the impact (especially financial) on affected rights holders; and

(3) Small claims solutions for copyright owners

This study is not only the newest but also most intriguing. The Copyright Office is looking into methods of resolving copyright infringement claims involving lower amounts of money. Public comments will be due in the beginning of 2012. While the cost of litigation is high, it is difficult to perceive what the Copyright Office could propose.

IIPA Study Shows the Economic Impact of the Copyright Industry

2011-11-25T09:50:00.002-05:00

While copyright has certainly become more prevalent in our society, I do not believe most people understand the impact that copyright has on the U.S. economy. The recent International Intellectual Property Alliance (IIPA) study released this month shows just how much impact the copyright industry has. The copyright industry employs over 5 million people in the U.S. The average salary exceeds the national average by more than 25%. The industry and those built around the industry make up over 10% of the national gross domestic product.

Not only does the copyright industry make up a significant amount of the domestic economy but its products are significant exports as well. Over $130 billion dollars in sales are made overseas. That's more than airplanes and cars.

The report is available on the IIPA website. The report was prepared by Stephen E. Siwek of Economists Incorporated.

Numbers like these explain the powerful lobbying power of the copyright industry. Regulation is also very significant to protect the copyright interests. It seems fairly clear that computer software is a driving force behind most of the copyright figures.

YouTube Case Heard By Second Circuit

2011-11-03T17:31:00.000-04:00

Last month, the Second Circuit heard arguments in the Viacom v. YouTube appeal.

Summary of the district court decision: Part I, Part II, Part III

While Viacom claimed that YouTube was well aware of infringing materials being posted and that the Court should not allow rampant infringement, YouTube countered that there were no instances where the infringing works were not taken down following notice from the owner. During the arguments,
YouTube touted its ability to remove the infringing works within hours of the notice of infringement and have developed software to detect copyrighted works.

One of the problems expressed by the panel was how to calculate damages. One judge expressed that he believed that Viacom could be looking for some type of license arrangement. However, by taking the case this far, it would seem that Viacom is interested in more than a licensing arrangement. YouTube has arrangements with other companies. Viacom included several references and comparisons to Grokster.

Ultimately, the question about who should bear the burdens regarding copyright infringement will need to be answered. YouTube claims they need notice to determine whether something that is posted on YouTube is infringing the work of another.

It will likely be several months before a decision is reached.

Supreme Court Updates

2011-10-20T18:16:00.001-04:00

Golan v. Holder
A few weeks ago, arguments were held before the Supreme Court in the Golan v. Holder case. The case challenges whether Congress has the ability to grant copyright protection to works that were previously in the public domain (See my previous post on case).

A copy of the transcript is available on the Supreme Court's website.

The Court seemed very engaged in the questioning for this matter which contained numerous hypotheticals, questions of First Amendment scrutiny and whether the government had already granted copyright protection to works that previously did not have any with analogies to 1790’s law and a moment of levity from Justice Breyer.

Vernor v. Autodesk
Back from its summer vacation, the Court denied certification to another copyright case Vernor v. Autodesk.

The case was summarized in previous blog entries:
Battles in Seattle Part 2 of 3: Vernor v. Autodesk
Battles in Seattle Vernor v. Autodesk Decision

This means that the Ninth Circuit decision will stand, thereby making software licenses not subject to the first sale doctrine under Section 109 of the Copyright Act.

Princeton Moves to Open Access for Scholarly Works

2011-10-12T10:55:00.004-04:00

Given my previous blog entry on Princeton University and its copyright policy, I thought it fair to show the recent change on Princeton’s policy with respect to copyright for scholarly works for faculty. The university approved a change to its copyright policy to encourage open access. Under the policy, the university is granted a non-exclusive right to make the faculty articles available. The university claims its intended purpose is to prevent faculty from giving away all of their rights in publishing the articles in scholarly journals (which charge fees for their works). It is interesting to note that the university claims that the faculty maintains their exclusive rights in all of their works. (Which seems somewhat contrary to the university’s actions with other works – see previous blog entry.)Of course, faculty members may seek waivers. The university makes it seem that they are following in the footsteps of other universities and hopes that it will force journals to amend their publishing contracts thereby preventing granting full rights to the publishers.This is an interesting concept. I do not know how successful it will be or who stands to benefit the most. The FAQ at the end also provides some insight into the potential impact.

Damages: $1 Billion Dollars Off

2011-10-08T10:52:00.000-04:00

In a follow up to the damages awarded in Oracle v. SAP, the court has determined that the $1.3 billion (yes, with a B), awarded by the jury was excessive and contrary to the evidence. The judge presiding over the case believes that $272 million was the amount proved. The judge has indicated that there may be a new trial if Oracle does not accept the lower award. Early indications were that Oracle may consider challenging the ruling. It is extremely rare that copyright damages amount to $272 million dollars but I guess when you consider that the judge is offering $1 billion dollars less, $272 million does not seem as much. What will Oracle decide? Will it be worth the effort to go after a billion?

What Do You Think?

2011-09-02T14:29:00.001-04:00

I saw this article last week and it raised some interesting questions. And here.

An arrest was made at Fook On Sing Funeral Supplies in Chinatown in Manhattan. Wing Sun Mak was charged with criminal copyright infringement. The store sells cardboard cutouts – such as mansions, televisions and Louis Vuitton and Burberry luxury goods. These items are given as symbolic gifts and burned at Chinese funerals.

According to the news report, the arrest report claims the defendant was observed selling counterfeit handbags with Burberry and Louis Vuitton trademarks. I fail to follow how the defendant was charged with criminal copyright infringement on these grounds.-- unless the trademarks are also copyrighted (which is possible under certain instances). However, apparently, the defendant also sold handbags and loafers that had similar print designs to Louis Vuitton and Gucci. (It is possible to copyright fabric designs.)

The problem arises where the buyer clearly knows the goods are not real but are merely made of cardboard. I wonder if the store sells the goods with a luxury brand name or design for more than a more generic cardboard cutout. Although, it also raises the question: Why couldn’t the store simply sell the cardboard versions without the copyrighted material and/or trademark?

It raises an interesting question on fair use. Under the four factor test in Section 107 of the Copyright Act, courts consider: (1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work.

Presuming the copyright infringement is based on the fabric design, it would seem that there is a commercial use of the copyrighted work by the funeral supply store, although its use would not necessarily be the same commercial use as the actual goods bearing the copyrighted works. Under factor #3, the funeral supply store would be attempting to take the copyrighted work as a whole. But factor #4 would favor the defendant. Selling a cardboard cutout is not likely to effect the market for Gucci or Louis Vuitton goods bearing copyrighted works. When viewed in light of the purpose of burning the cardboard cutouts as part of a funeral ritual, it becomes more apparent that defendant’s actions should not affect sales of copyrighted luxury goods.

At the same time, it seems unfair for these businesses to capitalize on the goodwill and artistry of others without remuneration. I come back to the fact that these designs and trademarks do not have to appear on the cardboard cutouts to sell them but it seems that the use of these materials must have additional commercial than those without the designs and trademarks. While a close question, I think this factor weighs more heavily in not allowing the fair use defense to apply.

What do you think?

Music Publishers Settle with YouTube...

2011-08-29T11:20:00.000-04:00

In a similar lawsuit to the Viacom v. YouTube dispute, music publishers had sued YouTube for copyright infringement.

However, the court found that YouTube was not an infringer because it responded to notices. he decision was appealed but now the National Music Publishers Association has settled its claim. Apparently, the settlement will allow for a collection of royalties to Harry Fox where ads from YouTube appear with user generated videos featuring a songwriters and publisher’s music.

YouTube will use information provided by the NMPA to identify the copyrighted works. No word on whether or what type of license has been arranged between the parties regarding the information provided by the NMPA. (Viacom has accused YouTube of requiring licensing which allows YouTube to use the submissions for far more than just the mere purpose of identifying infringement and infringing works. See previous blog entry.)

Does this mean that a settlement is in the near future for Viacom and YouTube? Highly doubtful given the acrimony between the parties.

Bond...One Really Big Bond

2011-08-26T17:22:00.004-04:00

In the never ending saga of the Bratz case, there is a new decision in the case. First, Mattel was able to in essence put MGA out of business until the Ninth Circuit reversed the decision for Mattel and ordered a new trial. At the new trial, MGA was successful and Mattel was order to pay hefty damages.

Now if Mattel wants to appeal to the Ninth Circuit, it will require a $315 million dollar bond. (Mattel’s damages totaled $310 million.) Mattel has until August 23, 2011 to post the bond.

8th Circuit Decides the 3rd Dimension Adds Character

2011-08-22T18:22:00.000-04:00

Recently, the 8th Circuit decided an appeal in Warner Bros. v AVELA. AVELA makes memorabilia such as snow globes, puzzles, t-shirts and other products primarily from movies. Warner Bros. sued AVELA for copyright infringement for use of materials associated with Gone With The Wind, The Wizard of Oz and Tom & Jerry. Some of the images were based on posters and still photographs which AVELA alleged fell into the public domain. These promotional pieces were created before the motion pictures were published. These works were all subject to the 1909 Copyright Act. The Eighth Circuit agreed that several of the images were published even though there were restrictions on the use of the promotional works, the predecessors in interest to plaintiff intended the works to be provided to the public. Some of the works were published without any copyright notice. Prior to 1989, copyright notices were required. Several works fell into the public domain due to the failure to put a copyright notice on the works. In addition, some of the works fell into the public domain because the works were not renewed. (Under the 1909 Act, copyrighted works were required to be renewed every 28 years to maintain the registration.)

A copy of the decision is available here.

There are 2 troubling aspects of the decision.   (Full disclosure: I previously worked on this brief before the district court.)

First, the Court decided that where the press photos such as Judy Garland as Dorothy in The Wizard of Oz which were created before the movie was complete were in the public domain. However, the Court found that the combination of the photo with the phrase, “There’s no place like home,” constituted copyright infringement of the Warner Bros. character. This does not make sense. Clearly, the phrase, “There’s no place like home” is not copyrightable in and of itself. (Short phrases are not copyrightable.) Further, a similar phrase “There is no place like home” was used in the Frank L. Baum novel from which the movie is based. (The Frank L. Baum book was published in 1908 – which places the book in the public domain since before AVELA started creating the memorabilia.)

Second, the Court decided that the 2-dimensional works such as puzzles and t-shirts that are based on the works that fell into the public domain were not infringing and thus AVELA should not be permanently enjoined. However, 3-dimensional works such as snow globes based on works that fell into the public domain were infringing and thus subject to a permanent injunction. The Court reasoned that the 3- dimensional works were based on the characters from the movies (owned by Warner Bros.).

This seems contradictory. Clearly, derivative works based on works in the public domain are subject to copyright protection. However, the Court finds that AVELA infringed Warner Bros. copyright for adding a third dimension to the posters and pictures in the public domain. The Court comments about the length of a nose unable to be determined in a 2-dimensional work. Even if true (which I have some doubt – there is such a thing as scale and proportion and multiple angles which may create some level of determination), why wouldn’t these considerations be considered scenes a faire or subject to an artist’s interpretation and thus, capable of its own separate copyright?

Given the recent Bratz decision limiting the infringement of derivative works for the different faces of the different generations of Bratz dolls because there were only a limited number of ways to create faces and facial expressions, the Eighth Circuit seems to disagree. Cf. Mattel, Inc. v. MGA Entm’t, Inc., 2010 U.S. App. LEXIS 26937, *22 - *32 (9th Cir. 2010). There is only so many ways which the back of a head or the dimensions of article of the characters’ clothing or costumes can be drawn.

What the Eighth Circuit has done is not only remove the works from the public domain (in the instance of the posters / pictures used in connection with short phrases) but also has effectively claimed that copyrights in characters can extend to prevent derivative works in the public domain if the derivative works are three-dimensional. Yet if both the original work in the public domain and the derivative work are both two-dimensional, then there is no infringement.

A finding that a copyright in a character extends to prevent the creation of three dimensional derivative works based on two-dimensional works in the public domain does not make sense.   Such line-drawing fits no purpose. It creates not only a bad rule and precedent but an impossibility, limiting the creation of new works. Preventing derivative works from being made from works in the public domain was not the intended result of the Copyright Act.

Follow-up on ICE Domain Name Seizure

2011-08-12T11:28:00.014-04:00

As blogged previously, the U.S. Customs has seized domain names from those who post infringing works on their websites. One of the seizures was for rojadirecta.com and rojadirecta.org owned by Puerto 80 Projects S.L.U. (“Puerto”). It is alleged that the two referenced websites collected a list of third party links to live sporting events and pay-per-view events.

Puerto sought to obtain the domain names back seeking immediate release of the seized property. The U.S. government argued that Puerto could not show substantial hardship and giving back the domain names would only lead to further criminal acts.

Puerto claims harm because of a reduced number of visitors. (Puerto operates other websites such as rojadirecta.me that were not seized.) The Court rejected this as substantial harm. Puerto also raised the First Amendment; however, the court rejected this argument finding that the forums for comment are not the purpose of the websites seized. The court finds the purpose of the two seized websites is to catalog links to copyrighted materials. See the Court's August 4, 2011 order here.

The court did not reach the question of whether giving back the domain names would only foster criminal activity but may take up the question when Puerto’s motion to dismiss is heard next month.

Things to Know about Copyright and your Website

2011-08-04T17:31:00.000-04:00

Copyright protects the expression in tangible form of original works of authorship.　 A website – like a brochure, an advertisement, a press kit, or a press release – is a valuable asset and marketing tool which merits protection.

Create and use your own images. The best way to avoid infringement claims against your website is to create your own original images for display. If you are not creating your own images...
1. Get permission before copying internet images. Copying images from the internet is controversial. If the owner of the image gives permission, you can use the image. Many times, however, the purported owner of the image is not the actual owner (i.e. the image was obtained falsely), which can lead to an infringement claim. The copying of images created by third parties without permission is infringement. See FragranceNet.com, Inc. v. FragranceX.com, Inc., 679 F. Supp. 2d 312 (E.D.N.Y. 2010) (where defendant used over 900 copyrighted images from Plaintiff's website).
2. Follow the terms of the images’ license agreement. Taking images from purchased software (i.e. Microsoft Word Clip-Art) is not necessarily infringement. By purchasing the software, you have accepted the license agreement terms. It is imperative to review the license to find out how the images may be used. For example, sample language from the Microsoft Service Agreement states that Microsoft product users that have access to media images, clip art, and the like, “may copy and use the media elements in projects and documents.” They may not, however, “(i) sell, license, or distribute copies of the media elements by themselves or as a product if the primary value of the product is the media elements; (ii) grant your customers rights to further license or distribute the media elements; (iii) license or distribute for commercial purposes media elements that include the representation of identifiable individuals, governments, logos, trademarks, or emblems or use these types of images in ways that could imply an endorsement or association with your product, entity or activity; or (iv) create obscene works using the media elements.” The use of licensed images from the internet may not be infringement, as long as you follow the terms of the license. See Stockart.com v. Engle, 10-CV-00588-MSK-MEH (D. Col. Feb. 18, 2011) (where the use of a copyrighted photo on a website without a license was a violation of the plaintiff’s copyright).

If possible, use only original text. When preparing text for a webpage, the text should be original, written specifically by the creator. The use of another’s written work without permission is copyright infringement. See Cvent v. Eventbrite, Inc., 96 USPQ2d 1798 (E.D. Va. 2010) (where the defendant’s online directory information was “scraped”, or copied, from plaintiff’s website)

Avoid making source code available for public use. The source code of a website can also be registered for copyright protection. The copying of registered website source code is an infringement. See Hermeris v. Brandenburg, 10-2531-JAR (D. Kan. Jan. 23, 2011) (where the defendant’s copying of content and source code of the plaintiff’s online document preparation business was copyright infringement).

Video and/or sound recordings should be copyrighted separate from the website. If a website contains video and or sound recordings (such as background music), they should be separately copyrighted (apart from the website itself) as these materials could be easily lifted separately and may have their own independent worth.

Web designers should operate under a work-for-hire contract. To determine whether a work is made for hire, one must first establish whether the work was made by an employee or an independent contractor. See Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989). If the work is made by the employee, then the work is generally considered to be a work made for hire, and the employer retains control of the work. If the work is created by an independent contractor, then the work is only a work made for hire if (1) it falls within one of the nine enumerated categories of works in Section 101 of the Copyright Act, and (2) the parties specifically agree in a written document that the work is one made for hire. If these provisions are not met, then the work is not a work made for hire, and the independent contractor is considered the “author” of the work. It is therefore essential to create a written agreement with an independent website designer to ensure that the designer assigns all copyright ownership to the website owner. Companies should also be advised that if their website is created by an independent contractor, there should be indemnification clauses in the assignment to ensure that the work, including the source code, is original.

Register, register, register. U.S. companies are required to obtain copyright registrations in order to bring an infringement action in the United States. In registering copyrights, website owners should identify the portions of the site that are being copyrighted. In addition, if a copyright owner files for registration within three months of the work’s publication, he is entitled to several remedies in a case of infringement potentially including attorney’s fees.

If a copyright owner decides to file a complaint for copyright infringement... Broad language, such as “all texts, photographs, selection, arrangement and compilation”, would be insufficient against a copyright infringement claim. See Salt Optics v. Jand, SACV 10-0828 (C.D. Cal. Nov. 2010) (where specific indication of the infringed portions of a website were necessary to bring an infringement claim).

Opting Out, Opting In - Google Books Settlement Update

2011-07-27T17:13:00.000-04:00

Last week, a hearing was held in the Southern District of New York by Judge Chin for an update on progress on settlement in the Google Book Settlement.

However, there has been no progress. Previously, the judge had indicated that the settlement may clear antitrust hurdles if the default provision was that authors had to opt-in to the settlement to agree to make their works available through Google Books. This will also allow for snippets of the work available through a search mechanism on Google.

An attorney from Google indicated that there were business issues in addition to legal issues that were still being worked out.

Previously, the Court indicated that it was doubtful that a settlement would be reached. Id. Google does not have much interest in the opt-in provision. Id.

Without a settlement, the judge will likely have to decide whether the use of the snippets from books are a fair use for which Google can provide to users or whether these may be infringements of the literary works. Is it possible that this is what Google actually seeks?

Rather than pay a hefty settlement sum for an opt-in option that is not as attractive to Google, it may merely wait to see if its use of the published materials from authors is a fair use – for which Google may have to pay nothing at all.

The parties have until September 15, 2011 before the next report is due to the judge.

IT’S FRIDAY…NO IT’S $2.99…BUT IT'S FRIDAY...BUT IT'S $2.99

2011-07-15T14:13:00.000-04:00

The YouTube viral music video sensation “Friday” featuring Rebecca Black is now the subject of a copyright dispute.

Apparently, Ark Music, the company that produced the video, wanted to start charging $2.99 for viewing of the “Friday” video on YouTube. No one told Rebecca Black. Apparently Black only learned of this development by fans.

Upon learning of the charges, Black’s lawyers sent a copyright takedown notice to YouTube for the video. Black’s lawyers claim that Ark Music does not have the rights of publicity or right to advertise the video. Black’s lawyers also claim that Ark Music has failed to provide the master recording of the song and that the company has no right to exploit the work (i.e. charge $2.99 on YouTube for the video).

While the dispute is being decided, the video has been removed from YouTube.

Is this one of those instances where a copyright takedown actually benefits the public.....will there be withdrawal without free access to the “Friday” video, and would anyone pay $2.99 to rent it?

Hangover Lawsuit Update

2011-07-07T15:21:00.000-04:00

Last month, Warner Bros. and S. Whitmill “amicably settled” the copyright dispute regarding the use of the tribal tattoo that appears on Mike Tyson’s face from being used on another character in The Hangover 2. The details of the settlement were not disclosed.

Prior to reaching an agreement with Whitmill, Warner Brothers informed the Court that if it is unable to resolve the lawsuit involving the tribal tattoo on Ed Helms' character in The Hangover 2 (detailed in my previous post), that WB would take the step of altering the appearance of the tattoo on one of the character’s faces in the movie when it is released on DVD. This apparently is an expensive alteration. However, it may be less expensive than having to pay damages for infringement. Obviously, if the reproduction of the tattoo were not longer to appear in the movie, then the claim for additional damages would be mitigated.

An additional twist on this case is from David Nimmer who filed a declaration as an expert for Warner Brothers. The declaration can be seen in its entirety here.

Part of Nimmer’s argument is that the tattoo (and therefore, the copyrighted work) is not fixed in a tangible medium when the design was affixed to Tyson’s face. There are several references to the history of the Copyright Act and failure to mention tattoos as part of the legislation. But I think the analysis misses the overall structure and underlying purpose of the fixation of the work into a tangible medium. Part of the purpose of the fixation was to ensure that the work was not fleeting. While arguably, the tattoo may be able to be removed, it does nothing to change the analysis that the work is fixed. The work was clearly capable of being drawn onto a piece of paper or a picture of the work as appeared on Tyson’s face would suffice to show how the work appeared. It also raises a completely different question, because clearly Whitmill had to file a deposit of the copyright and could not have filed Mike Tyson’s face. (I presume a photograph was submitted to the Copyright Office.) Without getting into the merits of the level of protection that the tattoo should be provided under copyright law, it seems a rather flimsy argument to claim that the work is not fixed in tangible medium. The photograph itself would show the tattoo artist’s rendering.

The argument lacks credibility. By analogy, if an artist drew sketches in pencil, would the drawing not be capable of copyright protection because the copyright registration indicated that the sketch was in pencil and was capable of being removed with an eraser?

Another argument pressed by WB and Nimmer is that there are no reported cases involving copyright infringement for tattoos. (A case involving Rasheed Wallace was settled out of court – however, in that case, the tattoo involved was an actual tattoo on the person involved not a temporary reproduction on another person.) There is a copyright infringement case involving temporary tattoos. See Gonzalez v. Kid Zone, Ltd., 2001 U.S. Dist. LEXIS 12008 (N.D. Ill. Aug. 14, 2001).

Because of the settlement we will have no way of knowing how the case would have turned out. What do you think the Court would have decided?

Lost in the Moment?

2011-06-16T12:47:00.000-04:00

Super Bowl advertisements tend to be the most memorable ads of the year.

Last year, a Chrysler commercial prominently featured Detroit native Eminem and the background music was one of his hit songs, “Lose Yourself.”

Last month Eminem's publishing company, Eight Mile Style, filed a lawsuit in a German court for Audi’s use of the same song in a video similar to the Chrysler ad promoting the 2012 Audi A6 Avant.

Audi claims the video is not an advertisement and has not aired in the United States. According to Audi, the video was shown at a press event in Germany. The video has since been posted on YouTube and can be viewed here.

While the Audi video has not appeared on television or radio in the U.S., jurisdiction and infringement may be hard to establish for a copyright infringement action in the U.S. This is likely why Eight Mile has filed suit in Germany.

However, it poses an interesting question...if the YouTube video is available in the United States, could a copyright infringement action be brought in the United States?

Would Audi had to have authorized the copy of the video to be allowed to be posted on YouTube in order for a U.S. lawsuit to be brought? I do not believe a U.S. lawsuit will be filed but I will keep up to see what happens in the German action?

The Hangover 2: Did they go a tattoo far?

2011-06-03T13:03:00.000-04:00

Last week brought good news for Hangover 2 fans -- the movie premiered over the weekend as scheduled, despite the copyright infringement lawsuit recently filed against Warner Brother Entertainment by tattoo artist S. Victor Whitmill (Complaint found here via Wired). Along with the lawsuit, Mr.Whitmill sought an injunction to prevent the release of the motion picture.

Mr. Whitmill is a tattoo artist located out of St. Louis, Missouri, whose most notable work is the design tattooed on the face of Mike Tyson. Whitmill obtained a copyright registration for a tattoo design for a tribal design on April 19, 2011.

Mike Tyson appears in The Hangover 2 but it is not the tattooed image on his face that Whitmill is seeking to enjoin but the replication on Ed Helms' character Stu.

I have not yet seen the movie, but in the trailer for The Hangover 2, it appears that Stu wakes up after a night of partying with a tribal tattoo similar in nature to the one that appears on Mike Tyson’s face. The tattoo is also featured in most of the print advertising for the film.

According to his complaint, Whitmill owns the rights to the image based on an agreement that was signed at the time Tyson obtained the tattoo. One of the terms of the agreement (a standard tattoo release form) is that the artwork belongs to the artist, not the person who recieves the tattoo. Whitmill alleges that as the owner of the copyright, he has exclusive rights to copy, distribute and publically display the tattoo. (Obviously, it would be difficult for Whitmill to try enforce any rights in the tattoo as it appears on Tyson’s face. One reason is because Tyson is the owner of the particular copy and has the right to display the work. Second, on some level there must be an implied license that the tattoo artist agreed to by placing his work on Tyson’s face. Otherwise, any photograph of Tyson could be considered an unlawful reproduction.)

In its Answer, Warner Brothers argued that there is no copyrightable expression in the tattoo as the design is not sufficiently original or creative, and that tattoos on skin are not copyrightable. Warner Brothers also hired David Nimmer to provide a declaration in support of the lack of copyrightablity.

Even if the Court does decide that Mr. Whitmill does indeed own the copyright to the tattoo, there are still a number of issues that will need to be decided any ruling on infringement can be made.

Copyright Class is in Session - YouTube Copyright School Part II

2011-04-29T13:30:00.000-04:00

This is a follow up to my post of earlier this week which covered YouTube's reasoning behind creating their new Copyright School. This post addresses the content of YouTube's lesson.

While the cartoon has some serious information in it, there seems to be a level of Simpson-esque social criticism that many may not take the message seriously. I reserved some level of judgment on the YouTube Copyright School idea but this is a farce. I guess you cannot expect much from a company whose popularity has been based on posting of videos without the copyright owner’s authority.

This Copyright School video seems to be a significant acknowledgement that YouTube is a platform for copyright infringement. (Don’t get me wrong there are postings to YouTube that do not infringe on copyrights; however, its previous success was based on infringing works. The successes and number of views and hits for “It’s Friday” would not have developed without users flocking to the site to see clips from “The Daily Show,” “The Colbert Report,” or numerous other unauthorized postings protected by copyright.).

While YouTube seems to be evolving, more and more often YouTube seems much more like Napster. Knowing that YouTube plays some type of active role in screening its videos makes it worse. A copyright school video like this makes you wonder if YouTube should not have to view the Napster and Grokster decisions and be schooled on contributory and vicarious copyright infringement too.

Shoot First, Apologize Never, Then Offer a Pop Quiz With a Get Out of Jail Free Card

2011-04-25T13:35:00.000-04:00

YouTube seems to be in a position similar to Baidu. Facing a potential appeal and negative campaign in terms of its copyright policy, YouTube is now turning its policy to making violators go back to school. (Yes, back to school.)

YouTube has a three strikes and you’re out policy regarding DMCA notices. Following the third strike, a user is suspended. (Circumventing this suspension can be as simple as opening a new account.) However, YouTube is now offering a new method to remove strikes – take a copyright class and pass a test. (YouTube insists that these users must then maintain a clean record.)

YouTube is also trying to self-regulate, pledging to build on its copyright policy including a 24 hour takedown policy, improving responses and system for DMCA takedown requests and improve its anti-piracy review.

A campaign by YouTube to show its improvements in assisting and taking seriously copyright complaints….is YouTube hedging its bets about its chances of reversal in the Viacom case? (Previous coverage of YouTube v. Viacom can be found here.)

Maybe the decision involving parent company Google in the book settlement case has YouTube a little more concerned. (That is a blog post for another day.)

There is an irony here. Clearly, YouTube knew that its site attracts copyright infringement. Viacom would argue that YouTube encouraged and profited from copyright infringement. Now, YouTube will be providing a course on copyright.
Now that YouTube is clearly the market leader in video content posting on the web and the website that most people would quickly go to first if looking for a video, YouTube seems to now want to not only clean up its image. A new startup for video web content would likely have to follow the YouTube model to allow significant amounts of infringing material to be posted to direct traffic to its site. Now YouTube can try the corporate responsibility routine and keep competitors at bay with all things – copyright.

YouTube, like Baidu maintains that the content that appears on its website is the uploader’s responsibility.

What effect do you think the school will have?

Is YouTube similar to Baidu trying to self-regulate fearing government intervention? Is it too late? Will the government step in? What happens (either way) in the Viacom case may determine if (or when) the government takes action?

Supreme Court Grants Cert in Another Copyright Case

2011-04-15T16:27:00.000-04:00

The Supreme Court has become more active in taking copyright cases recently. The Court granted certiorari in Golan v. Holder which involves a question of whether the Uruguay Round Agreements Act (“URAA”) is constitutional.

The URAA allows for copyright protection for foreign works that were previously in the public domain. The district court in Colorado first found for the government but on remand the Tenth Circuit asked the district court to determine whether the URAA is content – based or content – neutral and found that the URAA violated the First Amendment. There were cross-appeals before the Tenth Circuit. Plaintiffs are artists who used foreign works that at the time were in the public domain and but the copyright in the original works were restored under URAA. Plaintiffs sought injunctive relief claiming the statute was invalid, force the government not to enforce actions for restored copyrights and the Register of Copyrights to cancel restored registrations. The government as Defendant appealed summary judgment for Plaintiffs and sought reversal on Defendant’s motion for summary judgment. The Tenth Circuit reversed finding the URAA does not violate the First Amendment.

What is the URAA?

As part of compliance with TRIPs (Agreement on Trade Related Aspects of Intellectual Property Rights) in 1994, the U.S. was required to provide copyright protection to foreign works where their term for protection had not expired. This was originally part of the Berne Convention (a multinational treaty which the United States joined in 1989); however the U.S. failed to enact a law to extend protection for foreign works.

The URAA restored copyright protection for foreign works which had fallen into the public domain because:

the work failed to comply with formalities (i.e. the failure to place a copyright notice on a work prior to 1989 (and the enactment of the Berne Convention) could subject the work to falling into the public domain)

lack of subject matter protection

lack of national eligibility

Nothing protected foreign works whose term of protection had expired. The URAA also provided for dispute resolution through the World Intellectual Property Organization. The URAA also provided mechanisms for providing notice of restoration and a grace period for those who used the works (and may have been potential infringers) to dispose of works without liability.

The parties stipulated that the URAA is content neutral and thus subject to intermediate and not strict scrutiny. Under intermediate scrutiny, the statute will not be unconstitutional if there is not substantial burden on speech to further the important government interests.

The appellate court sided with the government finding compliance with treaties, protecting U.S. copyright holders interest in foreign countries (as reciprocity may be granted with other treaty members) and restoring foreign authors rights in the United States to be important governmental interests.

Among the reasons cited by the court were its deference on foreign affairs issues to Congress and the President and economic arguments about the losses the U.S. authors would suffer because their works would fall into the public domain due to failure of the U.S. to agree to copyright relations with different countries (and recognize the rights of the foreign authors). Without the reciprocal protections offered under the URAA, American authors would not be provided with “restored” copyrights in other countries. Congress considered the effect on those who would be infringing “restored” copyrights.

The Court also found that the law was not overbroad and extending beyond the government interests. The court claims that the URAA does not interfere with the built in protections of the First Amendments in copyright law, such as fair use and the idea / expression dichotomy. (Although in this instance, there is an argument that the URAA does stifle free speech and its scope by removing works that were already in the public domain.)

The Tenth Circuit also rejected Plaintiffs’ arguments that the URAA is facially unconstitutional. Plaintiffs argued there should be a bright line about what is in the public domain. However, relying in part on Eldred v. Ashcroft, 537 U.S. 186 (2003) (the Supreme Court decision upholding the Sonny Bono Copyright Extension Act – allowing for copyright protection to be extended to the life of the author plus 70 years), the court found that Congress had the power to extend copyright to works in the public domain.

The court failed to address an important distinction between Eldred and the URAA. In Eldred, Congress was not removing any works from the public but merely extended protection for works that were currently protected. In Golan, Congress was removing works that were already in the public domain. Retroactivity that may pull works out of the public domain could be more problematic than the issue in Eldred.

Will the Supreme Court extend Congressional power to take works out of the public domain? This is a classic copyright case with constitutional implications that the Supreme Court could not pass up.

White House Announces IP Enforcement Strategy

2011-04-07T14:18:00.001-04:00

On March 15, 2011, the Administration issued its White Paper On Intellectual Property Enforcement Legislative Recommendations, which provides 20 legislative proposals and actions to be taken in connection with the goals set forth in the Joint Strategic Plan on Intellectual Property Enforcement. (You can see my previous coverage of the the Joint Strategic Plan here.)

Among the legislative recommendations:

Stricter criminal penalties for copyright infringement
Include specific language to provide for copyright infringement for streaming video over the Internet as a felony
Allow for wiretaps by authorities for criminal copyright and trademark violations
Allow Customs to work with intellectual property rights holders to provide pre-seizure information to determine whether products are infringing
A series of statutes to provide greater protection against counterfeit pharmaceuticals;
Allowing Customs to issue penalties for infringing exports and imports;
Allow for relief for voluntary disclosure to Customs of unintentional acquisitions of infringing goods; and
A right of public performance for sound recordings transmitted over broadcast radio.

A full copy and explanation of the recommendations are available on the White House website.

Of note, is the continued concern regarding infringement for streaming video over the Internet as a felony. Following the UFC v. Justin.tv lawsuit, The Hurt Locker lawsuits, and ICE’s domain name seizures.

This issue was not the focus of the previous Joint Strategic Plan but has quickly become a priority.

The Criticism of Baidu

2011-03-31T21:23:00.001-04:00

Apparently, the U.S. is not the only country with problems with Baidu...one of the members of The Naughty List. In China, Baidu, is a very popular search engine that provides copyrighted works posted by users.

Earlier this month, a group of Chinese authors circulated a letter vowing to stop creating works if their works continue to be infringed. The authors blame the web service for allowing the posting of copyrighted works.

Reuters conducted further searches on the Baidu website and found popular books by Stephanie Meyer and J.K. Rowling also available.

Baidu claims that they take down infringing works upon investigation of complaints. Apparently, a previous case found that Baidu was not an infringer or violate any Chinese laws. Is anyone familiar with this case? Is this similar to the infringement analysis for YouTube in the United States?

Baidu has responded to the criticism by saying it would introduce anti-piracy technology starting in May. This past week, Baidu also announced that it had deleted over 2 millions files from its online library.

The Naughty List

2011-03-24T09:47:00.000-04:00

As part of the 2010 Joint Strategic Plan on Intellectual Property Enforcement, the United States Trade Representative released a list of Notorious Markets. The list includes marketplaces that have been the subject of enforcement action or that may merit further investigation for possible intellectual property rights infringements. This list is intended to include places which enable or support piracy and counterfeiting.

Some of the places are physical locations such as Bahia Market in Ecuador and Silk Market in Beijing, while others are online locations such as ThePirateBay and Baidu which is alleged to be among the top ten visited sites (and number one in China).

Other types of websites include BitTorrent trackers and indexers, live sportscasts streamed over the internet, and software applications for mobile phones.

The Naughty List is available with the USTR report here.

The USTR seeks cooperation of authorities to investigate further and pursue legal action to combat piracy and counterfeiting.

IVI Preliminary Injunction

2011-03-15T13:05:00.000-04:00

Back in November I blogged about the Fox/Cablevision dispute and discussed Fox claiming contributory copyright infringement when Cablevision customer service representatives allegedly told their custombers that the blacked out Fox broadcasts were available to watch through ivi.

In September 2010, prior to the Cablevision dispute, Fox and a number of other major broadcasters filed suit against ivi claiming copyright infringement in the Southern District of New York. As it turned out, ivi had begun offering local network television broadcasts in major cities (Chicago, Los Angeles, and New York) over the internet for a fee.

The Court issued a preliminary injunction last month to have ivi cease streaming television broadcasts over the internet. A complete text of the ruling can be found here via Public Knowledge.

Ivi claimed that it was a cable service, and thus was only required to pay a compulsory license; however, it did not obtain consent from broadcasters as required of other cable services. The FCC has not considered ivi a cable service nor did the judge.

Ivi has indicated that it is considering an appeal of the decision to the Second Circuit.

FEDERAL DOMAIN NAME SEIZURES

2011-03-10T15:42:00.000-05:00

Immigration and Customs Enforcement (ICE) seized several domain names for sites which are alleged to sell counterfeit products. It is unclear whether the goods were trademarked or copyrighted or both. Products seized included goods from Prada, Gucci, Breitling, Nike, Louis Vuitton, and Burberry among others.

However, this is not the first set of ICE seizures. As it turns out, in June 2010, ICE seized domain names from sites which made music, software and movies available for download. In November 2010, another round of seizures took place. Also, at the beginning of this month after UFC’s lawsuit against Justin.tv, ICE officials seized a number of websites which streamed live video. Previous blog entry here. (It seems unlikely that UFC was aware of the seizing of websites which were airing its pay-per-view events as it filed suits just weeks before the ICE seizures.)

There is a question hovering over these actions by ICE. There is current legislation in Congress that would allow for domain name seizures in the civil (not criminal) infringement context in the Combating Online Infringements and Counterfeits Act (“COICA”). Will the success of ICE seizures make private enforcement more likely to pass? Will intellectual property rights holders use this remedy? What level of proof will be necessary to obtain such a remedy? Will domain name seizure be used as a preliminary remedy? Will such a remedy be forced to meet the same standards as applied post-eBay? Will the legislation pass?

Moving Targets

2011-02-25T15:37:00.000-05:00

UPDATE: The lawsuits brought for allegations of illegal downloads of the movie “The Hurt Locker” are moving forward. Last year, the U.S. Copyright Group filed a copyright infringement complaint with a federal court in Washington D.C., naming 5,000 unidentified defendants.

Earlier this month, the Copyright Group filed multiple additional complaints for infringement of the movie across the country. Unlike their previous lawsuit, these lawsuits name individual Defendants.

The lawsuits were also filed in courts that have jurisdiction in the areas where the alleged illegal downloading occurred. There are several different venues: federal courts in Massachusetts (where a favorable judgment in the music downloading context already took place), Minnesota (where the Jammie Thomas music download case resulted in favorable jury results for copyright holders) and Colorado, among others.

News reports indicate that the individuals named in the lawsuits are those who previously refused to settle with Plaintiffs. (The reports indicate offers for settlement in the $1,500-$3,000 range.)

Will these lawsuits move forward? Will Defendants settle now that they have been named in lawsuits?

UFC Grapples with Justin.tv over Live-Streaming of Events

2011-02-01T18:15:00.000-05:00

Zuffa, Inc., the parent company of Ultimate Fighting Championship has filed a lawsuit in the District Court of Nevada for copyright infringement against Justin.tv. Justin.tv is a website that allows for the streaming of live video through its web portal.

UFC alleges that its pay-per view events are being broadcast on Justin.tv. UFC hired third party vendors to send petitions to take down over 200 video feeds of the October 23, 2010 pay-per view event UFC 121. According to news reports, UFC claims that over 50,000 watched illegal streaming video of UFC 121.

Justin.tv has a terms of use which includes DMCA takedown notices. UFC alleges that Justin.tv’s response has been inadequate. According to a press relase on the UFC website, Zuffa contacted Justin.tv several times over almost a two-year span in attempts to prevent illegal uploading.

It seems likely that Justin.tv is likely to rely on the DMCA safe-harbor provision similar to the arguments made by YouTube in the Viacom lawsuit.

Banned in the United States (and Canada)

2011-01-18T15:04:00.000-05:00

As a follow up to the Second Circuit decision in the Salinger case, there is a reported settlement. Defendant Colting wrote an alleged sequel to the Salinger book The Catcher in the Rye. As part of the settlement, Colting's book will not be sold in the U.S. and Canada. The book will be available in other countries.
Further, Colting's book will make no references to Salinger or his book nor can the author use the copyright lawsuit to promote the book.

BARBIE BRATZ
Opening arguments are set to begin soon on a jury trial on remand regarding the Mattel (Barbie) vs. MGA (Bratz). Link to previous blog entry. There are several copyright claims remaining from the first generation of Bratz dolls and a few others; however, copyright infringement claims on many subsequent generations of Bratz dolls were thrown out by the Ninth Circuit. The trial will also include trade secret misappropriation claims stemming from MGA's hire of Carter Bryant from Mattel.

If the Damages Were Not Big Enough....

2011-01-13T12:17:00.000-05:00

Following up on the recent lawsuit between Oracle and SAP and the $1.3 billion in damages awarded Oracle (the largest copyright damage award in U.S history), the parties were fighting over 2 other important remedies in copyright infringement actions - interest and attorneys fees.

An award of costs may include attorneys fees to a prevailing party under Section 505 of the Copyright Act. It has been reported that Oracle is seeking over $100 million in attorney's fees.

In addition, Oracle sought over $200 million dollars in interest. SAP argued that interest need not be paid. The court ruled that interest would be awarded but would not be the amount that Oracle sought but based on Treasury rates and calculations would be a much smaller figure (approx. $16 million).

Show Me...Damages

2011-01-11T14:47:00.001-05:00

Clearly, damages are a form of monetary compensation. The question is how to assess damages. It is more than difficult to assess. Two recent damages cases prove this point: Oracle v. SAP and RIAA v. Thomas. In both instances, liability was established and now damages have become the major issue.

In Oracle v. SAP, the jury awarded $1.3 billion when SAP copied Oracle’s software and customer manuals. Oracle claimed that a license for such software to SAP would have been around $2 billion dollars. SAP countered that because it was only able to get sway a few of Oracle’s customer to buy from SAP that the damages in the $30-40 million dollar range was more appropriate. Following the verdict, a representative from SAP indicated that “[SAP] will pursue all available options, including post-trial motions and appeal if necessary.”

In November, the third trial in RIAA v. Jammie Thomas-Rassett, a case involving illegal music downloads of 24 songs was held. In 2007, the jury initially awarded the RIAA $222,000. However, due to a jury instruction error, the judge declared a mistrial and the verdict was thrown out. Rather than settling outside of court, Thomas-Rassett opted for a second trial, and in 2009 the second jury awarded the RIAA just under $2 million. The judge in the case subsequently lowered the award to over $50,000.

Both parties appealed the decision and a third jury awarded the RIAA $1.5 million or $62,500 per song. A copy of the verdict is available here via Copyrights and Campaigns. Lawyers for Thomas argued that because the downloads themselves were worth $1 a piece that the damages should be $24. The RIAA had sought a maximum amount of $3.6 million.

More First Sale News

2010-12-22T15:41:00.001-05:00

Last week the Ninth Circuit ruled on the second of three first sale cases - MDY v. Blizzard. The opinion can be found here.

The case is about the use of bots (made by MDY) to assist in advancing in the World of Warcraft video game owned by Blizzard. For more facts about the case, see my previous blog entry.

Relying on the earlier decision in Vernor v. Autodesk, the first decision in the trio of first sale cases before the Ninth Circuit this term, the Court finds that the players of Blizzard are licensees and not owners of the World of Warcraft software. Blizzard’s World of Warcraft End User License Agreement specifically prohibits users from creating or using third party software to modify Worlds of Warcraft including bots.

However, the Ninth Circuit differentiates between a contract covenant which is a breach of the license agreement and not copyright enforceable conditions. Because the Ninth Circuit reversed the district court decision and determined that the MDY bot did not alter or copy any of Blizzard’s software, it was not a copyright enforceable condition and thus no copyright infringement occurred.

Next the Ninth Circuit had to decide whether MDY committed copyright infringement under the DMCA when it modified its bot to circumvent Blizzard’s Warden technology to prevent bots from connecting to the World of Warcraft servers.

In its interpretation of the DMCA (17 U.S.C. Section 1201(a)), the Court finds that the statute is meant to protect from circumvention of access controls to copyrighted works including decrypting and descrambling works. This does not necessarily affect the exclusive rights under Section 106 of the Copyright Act. The Court notes that this is a departure and differing view from the Chamberlain decision in the Federal Circuit requiring that the circumvention interfere with one of the exclusive rights under Section 106.

Based on this interpretation, the Court finds that MDY does not violate Section 1201(a)(2) for the literal elements and individual non-literal elements of Worlds of Warcraft because the Warden technology does not control access to the Worlds of Warcraft elements. The Warden technology does not prevent access to Worlds of Warcraft on an individual user’s computer but only to the Worlds of Warcraft servers.

However, the Court finds that MDY violates Section 1201(a) for the dynamic non-literal elements of Worlds of Warcraft. The Ninth Circuit explains the dynamic non-literal elements as analogous to the audiovisual display of a computer game which is independently copyrightable from the software program code. Because Warden does prevent access to the audiovisual display of the Worlds of Warcraft from its servers, MDY’s efforts to restructure its bots to circumvent the Warden technology is an infringement.

The Court reversed summary judgment for Blizzard for tortuous interference with contract because there were triable issues of fact.

Supreme Court Splits on First Sale

2010-12-21T12:14:00.001-05:00

Last week the Supreme Court issued a split 4-4 ruling in the Costco v. Omega lawsuit. The opinion can be found here.

The split affirms the decision of the Ninth Circuit that the first sale doctrine does not apply to copyrighted works manufactured and sold abroad. The case has been reported in many news outlets, including the New York Times and Wall Street Journal.

50 Cent Sued for Copyright Infringement

2010-12-20T14:01:00.002-05:00

A Federal lawsuit for copyright infringement in the Eastern District of New York was filed last week over the instrumental track for the 50 Cent song “I Get Money” by Tyrone Simmons. Simmons claims that he purchased the exclusive rights for the instrumental track which was used without his permission.

Defendants also include the song producer and records companies associated with the single.

Viacom Appeals

2010-12-15T18:11:00.001-05:00

As widely expected, Viacom has appealed the June 2010 district court ruling in Viacom v. YouTube to the Second Circuit. (I previously discussed the district court's decision granting summary judgment to YouTube in a 3 part post: Part I, Part II, Part III.) Viacom has a full text of the appeal as filed on their website.

Interestingly, Viacom has primarily focused on the factual findings of the district court in granting summary judgment for YouTube as an internet service provider under Section 512(c). Section 512(c) provides a defense to copyright infringement for certain activities carried out by internet service providers. (Further explanation available here.)

Viacom has stated three reasons why Section 512(c) should not apply to YouTube:

YouTube had knowledge that the content on YouTube was infringing or were aware of facts and circumstances that the content was infringing and did nothing to stop infringement. Viacom claims that YouTube’s general knowledge of infringing activity on its website should be sufficient to prevent YouTube’s service provider defense under Section 512(c).

Viacom alleges that YouTube selectively enforced against copyright infringement when YouTube had programs available to weed out infringing works and ignoring community flagging systems that would have pointed out infringing works. Viacom also claims that YouTube was aware of the predominant amount of infringing works that were available on its site and encouraged these videos because YouTube received more “hits” from these videos.

The court found that YouTube took appropriate action when advised of the alleged infringing web posts by Viacom. The court found specific knowledge was needed in order for the Section 512 defense to not apply.
YouTube had the ability and control over the infringing content and received a direct financial benefit. Viacom claims that YouTube gained financial benefits from advertising revenue due to the increased audience at its website. Viacom points to certain facts that YouTube realized that a major part of its success were videos that infringed on copyrights.

Viacom also reiterates that YouTube could have taken action against infringing activities but did not. The district court found that YouTube must have specific knowledge of the infringing content in order to be able to control the infringing activity.
YouTube’s activities went beyond the storage function of a service provider under Section 512(c). Viacom claims that YouTube’s actions in posting user content includes more than just storage – including display, reproduction, performance and licensing content to others.

The district court found that YouTube’s activities in placing the user’s content on its website was incidental to the acts of storage and thus was within the parameters of the Section 512(c) defense.

Viacom also seeks that summary judgment be reversed and granted in its favor. A number of amici have filed briefs on Viacom’s behalf including Business Software Alliance, Motion Picture Association of America, Microsoft, and members of the publishing and music industries.

For the first 2 reasons set forth by Viacom, it would seem heavily reliant on Grokster and general principles from the case. Based on the district court decision, Viacom would argue a couple of small changes and Grokster would not have been guilty of infringement. (This may be true.)

It will be interesting to see how the Second Circuit handles the issue of the district court’s finding regarding specific knowledge of infringement is necessary, not general knowledge.

I think the best that Viacom may be able to hope for from the Second Circuit is that there are triable issues of fact and summary judgment for YouTube was unwarranted. (Based on the number of facts presented by Viacom, this seems to be its strategy.)

The third reason set forth by Viacom is by far the more interesting legal argument. While Viacom is surely unhappy with the result of district court under Reasons 1 and 2 above and would like a ruling in its favor based on the facts it presents, it seems that Reason 3 would be the best argument to obtain summary judgment in Viacom’s favor. The more interesting questions facing the Second Circuit are not argued fully until nearly 50 pages into the Opening Brief.

IDPPPA passes Senate Judiciary Committee

2010-12-03T17:06:00.000-05:00

The recently proposed legislation protecting fashion design has been approved by the Senate Judiciary Committee.

For a summary of the bill, see the Chronicle's earlier post discussing the IDPPA and whether fashion should be protected by copyrighted.

A new question now remains: Because there is a “lame duck” session currently in Congress, will the bill pass before Congress ends its session?

There seems to be some question as to whether Congress will move forward with any legislation before the new year (other than tax-related legislation).

I do not know how much of a priority the IDPPPA is to members of Congress. Similar legislation, such as the Design Piracy Prohibition Act, has previously been introduced near the end of a Congressional term and the bill never passes before the Congressional term ends. I suspect that this will be the case again given the short time left before the Congressional session ends.

Following the November elections and the anticipated gridlock when the new Congress begins in January 2011, will the IDPPPA be made into law? What do you think?

A Twist of LimeWire - Infringer Pirated

2010-11-18T16:22:00.000-05:00

Following the decision that LimeWire’s peer file-sharing network infringed copyrights in a lawsuit filed by the Recording Industry Association of America, Judge Kimba Wood issued a permanent injunction against the company on October 26, 2010. The injunction was granted with LimeWire's consent.

In the 17 page order, the Court did go through the permanent injunction factors from the Salinger case in the Second Circuit. You can see the entire injunction here.

The Court found that LimeWire would be unlikely to be able to pay the statutory damage award. If LimeWire were not permanently enjoined, it would continue to facilitate “generations of infringement.” The RIAA would also be harmed because LimeWire would offer the copyrighted works that plaintiffs sell for free, thereby significantly affecting the market for the copyright owners’ works.

The Court also found the statutory damage award was not an adequate remedy at law especially to prevent future infringements and this factor favored a permanent injunction.

Because the Court found LimeWire’s business model was infringement, the balance of the hardships clearly favored plaintiffs. Finally the Court found that a permanent injunction serves the public interest by upholding copyrights and the harm caused by LimeWire.

In effect, LimeWire’s network has been shut down.

However, according to news reports, there is a software sharing program called LimeWire Pirate available on downloading sites on the Internet.

LimeWire has posted a notice on its website claiming it has recently become aware of third parties using the LimeWire name. The notice also includes a cease and desist to all parties using the LimeWire software, name and trademark.

Supreme Court Hearing on Copyright First Sale - November 8, 2010

2010-11-11T10:22:00.001-05:00

I was in attendance at the Supreme Court on Monday, November 8, 2010 for the hearing in the Costco v. Omega matter. You can read the transcript of the hearing here.

It was interesting to hear the judge’s questions on the first sale doctrine and its applicability to copyrighted works made and distributed abroad.

A couple of non-substantive observations. (Disclosure: I have worked on this case on behalf of Omega from 2004 – present)

The outside of the courthouse is well-kept and architecturally stands out (even in Washington DC surrounded by other similar inspiring buildings including the Library of Congress, Capital Building and the Senate and House office buildings.

The building itself is celebrating its 75th Anniversary. The huge halls and columns inside are majestic but in some ways only lead up to disappointment once entering the courtroom itself. The courtroom is small. The seating capacity could not have been over 250 people. The vaulted ceilings may make everything seem small but there were relatively few rows of seats. (Some were bench type seating while chairs in rows and on ends of benches comprised the remainder of the seats.) I have been to circuit courts with more abundant seating.

The justices themselves were well prepared and were engaging with questions. Given the serious nature of Supreme Court proceedings in general, I was surprised that there were a couple of moments of laughter (where Justice Breyer indicated that even he had to draw the line somewhere and Justice Scalia quipped, "Let me write that down.").

Relatively speaking, the hour went by fairly quickly with three speakers, Aaron Panner for Respondent Omega, Roy Englert for Petitioner Costco, and Malcolm Stewart for the United States in support of Respondent.

A decision will be made before the end of June.

Contributory Infringement or Settlement Negotiations?

2010-11-03T13:04:00.000-04:00

On Saturday, Cablevision and NewsCorp, owner of the Fox television stations, settled their ongoing dispute over programming fees.

During the two week long battle, in which over 3 million Cablevision customers in the New York/Philiadelphia area were without News Corp's channels, Fox apparently sent a cease and desist letter to Cablevision accusing the company of copyright infringement.

Fox is accusing Cablevision of contributing or vicariously infringing on its copyrights by having the Cablevision service representatives advising its customers how to obtain content from Fox (and its other networks such as National Geographic Channel and Fox Business) via networks such as Ivi.

Ivi offers a subscription based service which delivers television live over the internet. Unlike websites such as Hulu, where someone can access episodes of previously aired shows, the Ivi player shows the original broadcast of whatever the television stations are airing at the time.

No specific companies were named in the letter, which can be seen here. However, Fox is part of a group of broadcasters, who include ABC, NBC, and CBS among others, who last month sued Ivi for copyright infringement. The case is WPIX Inc v. Ivi Inc, 10-7415, Southern District of New York.

Fox will likely need to show that Cablevision knew that it was inducing others to infringe on Fox’s copyrights. It may also need to show that Cablevision knew or instructed its customer services representatives to advise its customers how to obtain the programming.

Could the actions of Cablevision be further complicated if Cablevision was aware or received complaints about the Ivi website as either an Internet provider (unlikely due to the safe harbor provisions as currently interpreted by the Court in Viacom v. YouTube) or as a content provider themselves (Cablevision's subsidiary Rainbow Media Holdings owns such networks as AMC, IFC and the Sundance Channel)?

Was this a mere ploy by Fox to settle on more favorable terms? Could Cablevision bring a declaratory judgment action for a finding that it is not infringing on Fox’s rights? Now that an agreement has been reached by Fox and Cablevision, will Fox follow through or stop pursuing the claim for copyright infringment?

Is Copying or Parody the Sincerest Form of Flattery?

2010-10-28T13:04:00.000-04:00

A recent episode of South Park included a parody of the movie Inception. Normally a parody would be considered a fair use in terms of copyright. However, in this instance the creators of South Park claimed to have never seen the film. How was this discovered?

The South Park episode contained several quotes from a video that appeared on the website collegehumor.com. The video (which first appeared in August contained the line, “Sometimes my thoughts of my dead wife manifest themselves as trains.” The line never appeared in the movie Inception. However, the line was used, along with others from the web show, in the South Park episode, entitled 'Insheeption.'

The South Park creators have apologized to the collegehumor.com creators.

In the case of a parody defense to copyright infringement, the copying must be close so that the work can be recognized as a parody of the original work – however, it is a fine line – as a parody must only take what is necessary. This can be a very fact intensive process. See Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994)

It is often difficult to determine when copying occurs. (In the instances of text, publishers will often print books with typographical errors to determine if someone has merely made a copy of its work.) Sometimes, the slightest changes will conceal whether a copyrighted work was in fact copied. Ideas and facts can often be expressed in many ways. However, because the South Park episode slavishly copied the collegehumor.com work, it was easy to tell where and what was copied.

Privatizing U.S. Copyright Registrations?

2010-10-18T18:50:00.000-04:00

Continuing on last week's discussion of the Copyright Principles Project, I am going to discuss one of the reform proposals being suggested by the CPP.

The CCP wants to make the copyright registration process more like the domain name registrar process. CPP: Directions for Reform, p. 26. Since many countries do not require a registration in the first place, I cannot see how this process would work. A decentralized registration process will only make copyrighted registrations more difficult to find. If you have ever tried to locate information regarding domain name registrations and owners, it is not an easy process. (In addition, some domain name registrars encourage and profit from the anonymity of its registration owners.)

There is also a more puzzling aspect – how and who would be in charge of managing copyright deposits. For obvious reasons, the Copyright Office does not post or make available online, a copy of the deposit for copyright applications. I do not believe that copyright registrars would post this information either. Therefore, all the registration would include is a title, author and possibly a description of the type of work.

The U.S. Copyright Office while often referring to itself as a record keeping office, must make some determinations on registration. It is nowhere near the rigorous standards of patent or trademark offices but a minimal review is required. It would be inappropriate for registrars to make determinations on whether the work itself is copyrightable.

There are a couple of organizational steps the Copyright Office could take. One example would be to better categorize the types of works. Broad categories such as sound recordings, performing arts, text and visual arts are somewhat helpful but today we have more definite descriptions that would make it more helpful in searching the copyright office records. Computer software programs, lyrics, musical compositions, websites, sculpture, paintings, architectural designs, etc. are better descriptions for others to search copyright records. (Titles themselves are not an accurate harbinger of what is contained in a deposit for a copyrighted work.)

While the CPP points out that it would also be advisable to have a sort of “small claims” procedure, it would be more than inappropriate to have separate registrars determine such claims. Copyright is a Constitutional principle:

"The Congress shall have power ... To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries." U.S. Constitution Article I Section 8.

Turning over decisions to determine rights to private registrars may not only result in conflicting results (such as in the instance of domain name registrations) but confusion. Besides the federal court system, a governmental agency such as the Copyright Office would be the only other appropriate way to decide such cases.

The Copyright Principles Project - Copyright Law Reform

2010-10-05T16:08:00.004-04:00

The Copyright Principles Project: Directions for Reform is attempting to influence a movement to reform the current copyright law to be simpler, easier to understand the more malleable due to changing times. The report can be found here and will be published in the Berkeley Technology Law Journal this fall.

While I agree that the U.S. copyright law could use some revisions especially given technological advances, some of the ideas raised in the report are highly problematic.

First, in a practical sense, the U.S. copyright law has been amended well over 50 times in the past 30 years. 1 Patry on Copyright §§ 1:110-114 (2008).

This has not resulted in the law being able to keep up with the advances in technology. But viewed in terms of other areas of the law, copyright law manages to updated with regularity. The law will never be able to catch up with technology. By the time many laws are passed, new issues arise. It is unrealistic to believe that changes in the copyright law will cause it to catch up to the technology.

It is also inconsistent to believe that we can make copyright law simpler and easier to understand and at the same time catch up with technology. Technologies are complicated. The DMCA is an attempt by Congress to create a system of laws to apply copyright law to the digital age.

Striking a balance between creating an incentive for the creation and promotion of the arts and the rights of the public is not easy. Efforts by the Principles Project create imbalance for sake of ease.

For example, avoiding liability for non-commercial uses of a copyrighted work could make the law easier in terms of understanding what the law is; however, it takes the balance and weighs it heavily in favor of public rights and takes the rights of the author away. Courts have struggled with the problem of non-commercial uses especially under the fair use doctrine, but commercial/non-commercial uses are not the only factor. See e.g. Harper & Row Publishers, Inc. v. Nation Enterprises, 471 U.S. 539, 539 (1985).

The Principles Project has several other proposals including more “safe harbor” provisions, consistency in damage awards, and other provocative ideas which may the subject of future blog entries.

BATTLES IN SEATTLE - Vernor v. Autodesk, Inc. Decision

2010-09-29T20:50:00.025-04:00

A couple of months ago, Copyright Chronicle covered the 3 cases (UMG Recordings v. Augusto, Vernor v. Autodesk, Inc., and MDY Indus. v. Blizzard Entertainment) involving the first sale defense heard in Seattle by the Ninth Circuit in our First Sale Frenzy: Battles in Seattle series of posts.

The first decision has been made in the Ninth Circuit in the Vernor v. Autodesk case.

Procedural History/Summary: Vernor sold copies of Autodesk’s software on eBay. Autodesk filed several DMCA takedown notices with eBay. After several notices, Vernor’s account was suspended. Vernor filed a declaratory judgment action against Autodesk.

Autodesk alleged that it had licensed its software to CTA. Part of the license included that when updates were provided to its customers, they were to destroy the previous versions. However, CTA sold Version 14 to Vernor.

Autodesk was able to trace the software available on eBay to CTA. Autodesk maintained activation codes and serial numbers to verify registrations of its software. Portions of Autodesk’s agreements with its customers include use restrictions associated with the software.

The district court granted Vernor summary judgment finding that Vernor did not infringe on Autodesk’s software because Vernor was protected by the first sale defense under Section 109 and the essential step defense. The primary issue and question in the case was whether the transaction between Autodesk and CTA was a license or a sale. The first sale under Section 109 and the essential step defense do not apply to licenses but only to sales. The district court found that the transaction between Autodesk and CTA was a sale and therefore, Vernor was free to sell Version 14 on eBay. Vernor v. Autodesk, Inc., 2009 U.S. Dist. LEXIS 90906, *42-44 (W.D. Wash. 2009).

The case was appealed to the Ninth Circuit. The Court found the following factors relevant to the inquiry of whether a transaction is a license or a sale: (1) whether the copyright owner specifies that the user has a license; (2) whether the copyright owner significantly restricts the user’s ability to transfer the software; (3) whether the copyright owner places restrictions on use by the user. The Court found that the district court erred in finding that a sale occurs when a transferee is entitled to keep the work. Because Autodesk did not require a return of its work, the district court found there was a sale. Vernor v. Autodesk, Inc., 2010 U.S. App. LEXIS 18957, *25-26 (9th Cir. Wash., Sept. 10, 2010).

The Ninth Circuit reversed and remanded, holding that a software user is a licensee where the copyright owner: (1) specifies that the user is granted a license; (2) significantly restricts that user’s right to transfer the work; and (3) imposes restrictions on use. As these criteria were met in the transaction between Autodesk and CTA, Vernor was in the same position as CTA and had no right to sell Autodesk’s software. (CTA has previously settled with Autodesk.)

There were several amici involved in the case who had indicated that there were significant policy considerations; however, the Court found its ruling based on its precedent and Congress was free to amend or modify the law based on policy considerations. Vernor at *37.

Should Fashion be Protected by Copyright? - Guest Post by Oren Gelber

2010-09-17T09:11:00.005-04:00

The American fashion industry often points out that the United States is the only industrialized nation that does not provide protection for fashion designs.

Back in August, New York Senator Charles Schumer sought again to change that fact when he introduced new legislations intended to provide protection to fashion designs. The Innovative Design Protection and Piracy Prevention Act (IDPPPA), was sponsored by Mr. Schumer and ten other senators. See the entire IDPPA here. (via Counterfeit Chic)

The IDPPPA is proposed as an amendment to Chapter 13 of the Copyright Act (which currently applies only to vessel hulls). If passed, the IDPPPA would provide some intellectual property protection to fashion designs.

There have been some who criticize the IDPPPA as unnecessary. However, some of these critiques of the proposed legislation ignore the fact that this legislation is rather limited in what it protects.

In its present form, the proposed legislation only covers the most original fashion designs. This means that while the bill covers all fashion designs, including clothing and products like handbags, belts and sunglasses, in order to qualify for protection, the item must be original, unique, distinguishable, non-trivial and a non-utilitarian variation over prior designs—in essence it must be original and novel. Any original design which predates this legislation and anything that does not meet this high standard of originality remains in the public domain.

Factors that cannot be used to determine the uniqueness of a design are color, patterns and a graphic element (patterns on cloth and graphic elements may be eligible for copyright protection separately even without this amendment).

Clearly, this is a rather high standard for protection. Moreover, the protection itself is limited to a three-year period from the time the item is first seen in public, such as during a runway show. Three years is short when compared with the normal term of a copyright—for individual authors, copyright protection is granted for a term of the life of the author, plus 70 more years; work made for hire copyrights are protected for a term of 120 years from the date of creation.

A designer seeking to enforce a copyright-protected design must also bear a heavy burden. The IDPPPA provides that a designer asserting infringement of his/her design will have to plead an infringement with particularity—that is, the Complaint must allege specific facts establishing that the design was protected (“a unique, distinguishable, non-trivial and non-utilitarian variation over prior designs”) and an infringement occurred. Such a heightened pleading standard is intended to discourage frivolous lawsuits. The designer would further bear the burden of proving that the copy is “substantially identical” to the protected design. The substantially identical standard is more stringent that the “striking similarity” requirement for copyright infringement of literary, visual or musical works under current U.S. law.

As with existing U.S. Copyright Law, the IDPPA also has exceptions and defenses. Independent creation is a defense to a cause of action under the new proposed legislation. If an alleged infringer can establish that the design he is claimed to have copied was actually conceived of and created independently, there will be no liability for infringement, even if the works are identical. There is also a fair use “home sewing” exception, which would allow individuals to sew a single copy of the protected work for their personal use (not to be sold or used in commerce until after the expiration of the protection period).

The IDPPA is thus not as far reaching or all encompassing as its opponents would lead us to believe. In actuality, this proposed legislation is very limited in the scope of its protection (only the most original designs will actually be protectable) and the term of protection is short.

As most commentators familiar with the legislation will point out this new bill represents a compromise between the two sides of the fashion copyright debate. Unlike previous legislation, the American Apparel and Footwear Association and Council of Fashion Designers of America both took part in the crafting of this legislation and are both supporters of this legislation. The collaboration of the American Apparel and Footwear Association and Council of Fashion Designers of America on this legislation is a large step in the right direction.

However, even if the Innovative Design Protection and Piracy Prevention Act does become law, designers will still face an uphill battle in combating knock-offs given the limited protection that IDPPPA grants and the heavy burden of proof for establishing infringement.

Considering the creativity and ingenuity that go into crafting some of these fashion designs (on par with traditional subjects of copyright protection), the argument that fashion designs do not merit this limited protection is unpersuasive.

The Settlement of Summer - Don Henley v. Chuck DeVore

2010-08-31T16:24:00.000-04:00

Earlier this month, Don Henley (along with fellow songwriters Mike Campbell and Danny Kortchmar) settled a copyright lawsuit with California State Assemblyman and former Senate hopeful Chuck DeVore.

Copyright Chronicle has been following this case, which involved two music videos made by DeVore’s campaign using the music and lyrics from Don Henley’s songs “The Boys of Summer” and “All She Wants to Do Is Dance.” DeVore changed “The Boys of Summer” to “The Hope of November,” with lyrics mocking Barack Obama and “All She Wants to Do Is Dance” to “All She Wants to Do is Tax,” with lyrics aimed at Senator Barbara Boxer.

In DeVore’s cross-motion for summary judgment, he claimed the fair use defense. According to DeVore, the use of Henley’s songs was intended to parody Henley and the liberal bias in Hollywood. (I’ve previously mentioned how the parody defense would be a tough sell for DeVore considering the subjects of the commentary in his two songs are not the subjects of Henley’s songs.)

In June, U.S. District Judge James Selna rejected DeVore’s parody claims, ruling that DeVore had not established a fair use defense, and granted Henley summary judgment on the copyright infringement claims. A full-text of the decision can be found here.

A large portion of the Court’s decision focused on the parody inquiry and the distinction between parody and satire. While parody of a work is considered fair use, the Court noted that many courts remain split over whether parody of the author of a work is also protected. In the decision, the Court framed its analysis of DeVore’s songs with the assumption that “parody-of-the-author” would constitute fair use. Under this framework, the Court found that “Dance” was purely satire, as the song “makes no implicit or explicit reference to Henley or Kortchmar, much less ridicules them” (p. 17). “November” was found to have parodic element, as the narrator in both songs express disillusionment with politics; however, it was only a minor part and therefore the extent of DeVore’s use was not justified.

The Court also found that DeVore’s use of the songs as campaign advertisements was commercial. In his opposition brief, Henley argued that the videos were intended to increase campaign donations (each of the videos contained links to DeVore’s campaign website and the emails publicizing the videos linked directly the donation page on DeVore’s website). See Harper & Row, Publishers, Inc. v. National Enterprises, 471 U.S. 539; 105 S. Ct. 2218; 85 L. Ed.2d 588; 53 U.S.L.W. 4562.

The court agreed with Henley. Despite noting that courts have normally ruled campaign advertisements as non-commercial speech (See Mastercard Int’l Inc. v. Nader 2000 Primary Comm., No. 00 Civ. 6068 (GBD), 2004 WL 434404 at *12 (S.D.N.Y. Mar. 8, 2004)), the Court based their decision on the Ninth Circuit case Worldwide Church of God v. Phila. Church of God, Inc., 227 F.3d 110, 117 (9th Cir. 2000):

“Like the church in Worldwide Church, which stood to gain parishioners through the unlicensed use of the plaintiff’s copyrighted work, DeVore and Hart stood to gain publicity and campaign donations from their use of Henley’s music. In fact, the videos contained links directing viewers to the DeVore campaign website, encouraging viewers to directly donate. Thus, under the logic of Worldwide Church, the Defendants “profited” from their use in the sense that they benefitted or gained an advantage without having to pay customary licensing fees to the Plaintiffs. 227 F.3d at 1118.” (p. 19)

Despite deciding for Henley on the issue of copyright infringement, the Court declined to rule on whether DeVore’s infringement was willful. The Court also rejected the Henley’s Lanham Act claims and granted summary judgment on the issue in favor of DeVore.

Do you remember when I licensed that copyright to you?

2010-08-23T11:33:00.003-04:00

S...The law says that license ends in 35 years if I want it to.

Not a lot of people realize that copyright assignments can be terminated after 35 years. There is a five year window to terminate. It is written into the Copyright Act. 17 U.S.C. § 203(a)(3) for transfers executed by the author on or after January 1, 1978. There is a process by which the author (or his/her heirs) can terminate the license. (Other statutes and time periods apply for works created prior to the enactment of the 1976 Copyright Act which are governed by 17 U.S.C. § 304.)

The first set of terminations may take place for licenses made in 1978 (for works created pursuant to the 1976 Copyright Act) in 2013. Notifications can already be served and must provide at a minimum 2 years before the termination date. 17 U.S.C. § 203(a)(3) and 203(a)(4)(A).

There are not many reported cases involving copyright termination rights. These cases all involve terminations made prior to the 1976 Act and usually involve the heirs of an author. One such case involves Superman. See Siegel v. Warner Brothers Entertainment, Inc., 542 F. Supp 2d 1098 (C.D. Cal. 2008). In that case, the widow and daughter of Jerome Siegel, one of the joint owners of the Superman character, was able to terminate the copyright assignment to Warner Bros. (the successor in interest to DC Comics). Siegel, 542 F. Supp 2d at 1145. The heirs of the other owner (Joseph Shuster) are now attempting to terminate its license and have filed termination notices effective in 2013.

Both Siegel and Shuster’s heirs are using the same lawyer – Marc Toberoff to terminate the rights in the Superman character.
DC Comics sued Toberoff claiming Toberoff is preventing his clients from settling or negotiating with DC. DC also claims that he wants a share in the rights. The case is pending and Toberoff recently filed a motion to strike based on California’s anti-SLAPP laws. (See Toberoff’s motion here, via THR, Esq.)

Despite the new provisions, termination of granted rights is not guaranteed. The few reported cases involving copyright termination are likely to provide guidance for the future of copyright terminations.

Several recent cases deal with the “agreement to the contrary” provision found in §304(c), which states, “termination of the grant may be effected notwithstanding any agreement to the contrary, including an agreement to make a will or to make any future grant.” 17 U.S.C. §304(c)(5).

Twice, courts have denied heirs’ efforts to terminate rights granted prior to 1978. In both cases, the courts ruled that the termination rights to the original grants were considered forfeited due to post-1978 grants by the heirs. See Penguin Group (USA) v. Steinbeck, 537 F. 3d 193 (2d Cir. 2008) (termination notice to rights granted in 1938 was ruled invalid due to a 1994 agreement between Steinbeck’s wife and the publishing company); Milne v. Stephen Slesinger, Inc., 430 F. 3d 1036 (9th Cir. 2005) (termination notice to 1930 grant ruled invalid due to 1983 agreement).

The Ninth Circuit addressed §304(c)(5)’s language again in 2008 in Classic Media, Inc. v. Mewborn, 532 F.3d 978 (9th Cir. 2008) and in this case ruled that the rights to Lassie could come home to the daughter of author Eric Knight, despite an 1978 assignment. (Interesting note: Marc Tobleroff was counsel for Mewborn, Knight’s daughter)

It will be interesting to see how many copyrights transfers are terminated. I suspect that there will be many more of these suits in the future. The ramifications of these termination provisions will be the subject of (what is likely to be) a series of posts.

What If They Take Away Your Internet?

2010-08-11T16:35:00.001-04:00

In the U.S. there is the dramshop rule where if you drink too much alcohol, the provider will cut you off. If a new law is passed in New Zealand, if you commit copyright infringement over the Internet, the court may order your internet service cut off.

It is always interesting to see how other countries handle the problems of copyright infringement. In most instances, governments cannot keep up with the technologies to create laws to prevent certain infringing activities before they develop.

This dilemma has been compounded by the Internet which allows the sharing (and copying) of copyrighted materials almost instantaneously.

For instance, in Canada, a copyright reform bill has been proposed to develop a system of copyright laws to catch up with technology. In New Zealand, a new bill proposes a court injunction to suspend copyright infringers’ internet service provider account for six months. (I am not sure this idea has been fully developed as it would be difficult to prevent someone from opening up a new internet account or obtaining a new computer or going to a library or internet café for access.) Such a remedy would certainly face a high level of scrutiny in other places.

Internet access has been treated as a human right in countries such as France and Finland. It would seem more difficult to enforce a remedy such as the one proposed in New Zealand where broadband and wireless communications would make it difficult to track infringers who were denied internet access.

While the proposed remedy may be an effective tool to prevent copyright infringement over the Internet, whether this spreads to other countries remains to be seen.

Protecting Your Website

2010-08-05T15:10:00.001-04:00

In reviewing this recent article about a law firm that is primarily involved in settling copyright infringement lawsuits involving downloads of movies from BitTorrent (including The Hurt Locker which I have previously discussed), it serves as an overlooked reminder for protection of intellectual property rights – copyright your website.

The U.S. Copyright Group claims that they never had a live site (located at dglegal.force.com/sitelogindglegal.com) similar to the one located at www.copyrightsettlements.com. The U.S. Copyright Group’s website does not look this way.

However, this may serve as an important reminder that a website may be copyrighted as to the text and pictures (and the compilation and/or arrangement of these elements) located on the web. Time, effort, energy, creativity, research, development and marketing decisions go into many companies’ outward public appearance – such as brochures, advertisements, press kits, and press releases.

Many of these materials are copyrighted to protect from having anyone else copy these efforts. Websites should be thought of similarly. It is fairly easy to copy someone’s website (and in fact, very often, the underlying code to produce such a website can be easily reproduced). Some also offer a service on how to copy other websites.

There are copyright infringement lawsuits in instances where a copyrighted website is lifted and posted at other locations. See FragranceNet.com, Inc. v. FragranceX.com, Inc., 679 F. Supp. 2d 312 (E.D.N.Y. 2010) (where defendant used over 900 copyrighted images from Plaintiff's website). See also SMC Promotions, Inc., et al. v. SMC Promotions, et al., 355 F. Supp. 2d 1127 (C.D.Cal. 2005) (where defendant used copyrighted photos and product descriptions from plaintiff's online members-only catalog).

For those who hire web designers to create their websites, they should make sure that there are proper contracts in place to ensure that the designer has created an original work and that the resulting website is not infringing on anyone else’s work. Also, a copyright registration for the website is necessary in order for U.S. based authors to sue possible infringers.

For the most part websites contain text and visual works which in combination comprise the copyrighted work. In the course of a copyright application, the applicant must disclaim any part of the works which they cannot claim copyright protection in (such as a previous work or a work not made by the author).

Also if a website contains video and or sound recordings (such as background music), I would recommend that this material be separately copyrighted (apart from the website itself) as these materials could be easily lifted separately and may have their own independent worth. (Also, an applicant should realize that when a deposit for registration for a copyright which includes “screen shots” of the website – it does not include the contents of the videos or the background music – and thus would not be registered.)

(Full disclosure: Collen IP does offer copyright registration services for websites including enhanced services under its Brutus® Protection Program.)

Barbie vs. Bratz - You can't script this reality show

2010-07-28T11:49:00.002-04:00

Brief Update regarding last week’s blog entry: One day after the announced settlement regarding “Shaq Vs.” and pointing out that ideas are not copyrightable I pointed to the example of Pros Vs. Joes on Spike as a prior example of a similar idea. On Thursday, I found a lawsuit brought by two men from Long Island against Spike TV for infringing on its script for a similar reality television show (Yes, I know I just wrote script for a similar reality show.) See Complaint here. I will continue to monitor to the case and keep the blog updated.

Part of the premise to last week’s blog is that ideas themselves are not copyrightable but the expression of those ideas. Partially based on this premise, the Ninth Circuit reversed an injunction for copyright infringement in the ongoing Mattel v. MGA Entertainment Inc. case involving Bratz dolls.

To briefly summarize, Carter Bryant, an individual employed by Mattel to design fashion and hairs styles for collectible Barbie dolls, developed the concept of Bratz including the names of some of the characters, sketches, and sculpt. Bryant allegedly violated his employment contract with Mattel by presenting the idea for Bratz dolls to MGA. At trial, the jury found generally that MGA was liable for copyright infringement and enjoined MGA from “producing or marketing virtually every Bratz female fashion doll."

One of the issues that should have been decided was whether Bryant’s employment contract assigned rights to Bryant’s works were created outside the scope of his employment. (If it was within the scope of Bryant’s employment, it would be a work made for hire and Mattel would be the author of the work.) Because this issue was not decided, the Ninth Circuit vacated the copyright injunction.

While the appellate court agreed that Mattel owned the copyright and MGA had access to the sketches and sculpt, whether the Bratz dolls infringe on the sculpt and the sketches was still an open question. One of the reasons the question remained open is due to the fact that only the particular expression of the doll idea was covered by copyright not the idea of the doll itself. “Otherwise the first person to express any idea would have a monopoly over it.” Mattel v. MGA Entm’t Inc., Appl No. 09-55673 at 10540.

The Ninth Circuit finds that the substantial similarity must be based on what is protectable – not idea. The court finds that the expression of an attractive young, female fashion doll with exaggerated proportions can only be expressed so many ways – for the sculpt – but not for the sketches. Thus, the court finds the sketches can have broad protection for the substantial similarity test.

The court remands the case to filter out the ideas within the sketches to determine whether the sketches were infringed by the Bratz dolls. The court also advises the district court that while some of the first Bratz dolls were substantially similar to the sketches a large majority of the subsequent generations of Bratz dolls evolved. Any substantially similarity to the original sketches to the subsequent generations may have only been similarity to the ideas.

The appellate court vacated the injunction and remanded. There are other pending issues on appeal including damages which are yet to be decided.

The Whole Shaquille

2010-07-21T17:39:00.000-04:00

This recent article regarding a settlement reached in the television show “Shaq Vs.” reminded me about an overlooked element of copyright law by many – an idea is not copyrightable.

The case was filed in a Los Angeles Superior Court and thus, it is unlikely that there was an allegation of copyright infringement. Yet, this is a difficult concept for many to understand but copyright protects the expression of an idea, not the idea itself. 17 U.S.C. Section 102(b).

In the “Shaq Vs.” case, Plaintiff Todd Gallagher sued Endeavor Talent Agency alleging that Plaintiff’s book “Andy Roddick Beat Me with a Frying Pan” was the basis for the “Shaq Vs.” television show. Apparently Gallagher through his talent agency had attempted to “shop” his show to various networks; however, the show moved forward with Shaq (another client of Endeavor) replacing Gallagher.

“Shaq Vs.” features Shaquille O’Neal challenging famous celebrities and sports stars in the field for which they are famous. Examples include boxing against Oscar De La Hoya and beach volleyball against Kerri Walsh and Misty May-Treanor.

Gallagher’s book is based on stories where the author challenged professional athletes where the athletes would face a handicap such as Andy Roddick playing tennis with a frying pan.

While the case was settled out of court, it may be that there were more specific facts or instances that were highly similar (or there may have been a non-disclosure agreement) or bad blood between Gallagher and Endeavor but it seems that the underlying idea may have been taken but this is not copyright infringement.

An idea or broad concept cannot be copyrighted. One of the simplest reasons that this is true is because if every idea could be taken, there would not be any incentive but every new book, television show, etc. would merely be a re-tread of something already done.

In this instance, Gallagher’s book may have provided an idea but there are differences. Clearly, Gallagher’s competitions involved a handicap to the sports professional. “Shaq Vs.” does not always have gimmick handicaps such as using a frying pan for a tennis racket. Also, while Gallagher’s book appears to be sports oriented, “Shaq Vs.” includes such competitions this season as cooking against Rachel Ray and a spelling bee against the National Spelling Bee Champion.

Also, Gallagher’s book could easily be based on other prior ideas such as “Pros v. Joes” (which began in March 2006) which was prior to the publication of Gallagher’s book in October of 2007.

Viacom v. YouTube, Part III - Limitations of Liability

2010-07-15T10:28:00.001-04:00

The final part of the Viacom v. YouTube trilogy focuses on the DMCA limitations of liability in Section 512.

A copyright includes a certain bundle of exclusive rights such as distribution, reproduction, public display, and the right to make derivative works. See 17 U.S.C. § 106. Under the DMCA, Section 512 provides the limitations for liability for online materials specifically for online service providers.

Under the statutory scheme of Section 512, there are several subsections for different liabilities. For example, 512(a) is a safe harbor for “infringement of copyright by reason of the provider’s transmitting, routing, or providing connections for, material through a system or network controlled or operated by or for the service provider, or by reason of the intermediate and transient storage of that material in the course of such transmitting, routing, or providing connections…” This is followed by specific conditions:

the transmission of the material was initiated by or at the direction of a person other than the service provider;
the transmission, routing, provision of connections, or storage is carried out through an automatic technical process without selection of the material by the service provider;
the service provider does not select the recipients of the material except as an automatic response to the request of another person;
no copy of the material made by the service provider in the course of such intermediate or transient storage is maintained on the system or network in a manner ordinarily accessible to anyone other than anticipated recipients, and no such copy is maintained on the system or network in a manner ordinarily accessible to such anticipated recipients for a longer period than is reasonably necessary for the transmission, routing, or provision of connections; and
the material is transmitted through the system or network without modification its content.

Section 512 (b) is for storage for system caching with specific conditions and 512 (d) is for infringement by reason of reference or linking to an online location with infringing materials or activity.

In YouTube, the Court granted summary judgment for Defendants under the safe harbor provision of Section 512(c) which excepts Internet Service Providers from liability for “infringement of copyright by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider…,” provided certain conditions are met.

Viacom argued that there cannot be a safe harbor under 512(c) for infringements made by virtue of replicating, transmitting and displaying videos. The safe harbor, according to Viacom, was for storage only. However, the Court decided that Viacom gave “storage” too narrow a meaning, and it must include activities which flow from the material’s placement on the provider’s system or network.(See Page 24.)

However, even if granted a broad interpretation, the Court has taken “storage” way too far. If each exclusive right (such as distribution (transmission) and reproduction (storage)) in a copyright are independent, then the exceptions for liability under 512 must be treated similarly.

If Section 512(c) is for storage and 512(d) is for linking or referring to infringing pages, they must be analyzed separately, as each is a separate right being infringed. Clearly the liability under 512(a) is specifically for “transmission, routing and providing connections,” should have likewise received separate treatment. Instead, the Court relied on 512(c) as the safe harbor from liability. (I think quite possibly, the Court could not escape the title for subsection (c) for Information Residing on Systems or Networks at Direction of Users for storage ignoring that there is a specific 512(a) exception for transmitting, routing and providing connections.)

While the Court painstakingly sifted through the details of the legislative history and the statute during the course of the opinion, Section 512(n) was glaringly omitted. In 512(n), Congress provided specific instructions under the DMCA for construction of the limitations of liability under 512(a)-(d):

Subsections (a), (b), (c), and (d) describe separate and distinct functions for purposes of applying this section. Whether a service provider qualifies for the limitation on liability in any one of those subsections shall be based solely on the criteria in that subsection, and shall not affect a determination of whether that service provider qualifies for the limitations on liability under any other such subsection.

This makes sense because there are certain conditions under each subsection for a safe harbor from liability. YouTube clearly transmits and provides connections for the videos uploaded. This could not be considered “storage” under the circumstances where the videos were uploaded and formatted to be viewed by the public at large on the YouTube website.

To claim that the video feeds streamed to hundreds of thousands if not millions of users qualifies as storage is not only far-fetched, but runs counter to Congressional intent – not from the legislative history but directly from the statute itself.

The Court cites to the Veoh case for support. UMG Recordings, Inc. v.Veoh Networks, Inc., 620 F. Supp. 2d 1081, 1089 (C.D. Cal. 2008). In that case, the court found that it would be troublesome for service providers if liability could be triggered for display and distribution attributable to uploading content on servers (i.e. storage) without the possibility of DMCA immunity. Therefore, the Court found no liability under Section 512(c). See Pages 24-25 of the YouTube opinion. This interpretation ignores the remainder of the statute.

DMCA immunity would still be provided. However, it is not Section 512(c) that should apply, but Section 512(a). Each individual subsection has separate and distinct functions – this is why there are different tests and conditions under each factor. The YouTube Court should have examined 512(a) and its conditions to determine liability for YouTube’s transmission, routing, and providing connections for the videos uploaded. At a minimum, given the state of the proceeding, the Court should have denied summary judgment and found that there are genuine issues of fact for a trial.

Some may ask if there was no liability for the storage under 512(c), what conditions would change that would make YouTube liable under 512(a)?

First, 512(a) does not have a knowledge or financial benefit requirement. Second, 512(a) has a limitation on the maintenance of the material on an ISP’s its system for anticipated recipients only -- not the public at large. (This is likely to mitigate the damage that may be caused if everyone obtained a copy or reproduction or transmission of the work.)

A final example ties into the first two postings: 512(a)(2) requires:

the transmission, routing, provision of connections, or storage is carried out through an automatic technical process without selection of the material by the service provider

in order to avoid liability. There are some serious questions in YouTube’s case regarding whether or not there was any selection on YouTube’s part. See Part I & Part II of my Viacom v. YouTube discussion.

Viacom v. YouTube, Part II

2010-07-08T11:43:00.001-04:00

Last week Part I of the Copyright Chronicle's discussion of the Viacom v. YouTube opinion covered YouTube's protection under the "safe harbor" provision of §512(c) the Copyright Act and the red flag test to determine when facts or circumstances of infringing activity is apparent.

Part II discusses the Court's analogies to Tiffany v.Ebay and Grokster in its opinion.

The district court's opinion makes 2 analogies which are troubling. The first is the correlation to the Tiffany v. Ebay decision in the Second Circuit and the second is the correlation between Grokster (and related cases) and YouTube.

The Ebay Analogy

Starting on page 18 of the Viacom decision, the Court discusses the recent Second Circuit decision in Tiffany v. Ebay. Ebay was found not liable for contributory infringement when a significant number of the TIFFANY goods sold on its website were found to be counterfeit. The Court compares Ebay’s generalized notice that some of the Tiffany products sold on Ebay are counterfeit with YouTube and similarly decides that YouTube is not liable for infringement. However, there are distinguishing facts and circumstances.

First, unlike eBay, YouTube has control over the infringing material. eBay may sell goods through its website; however, eBay itself never had possession, custody or control over the goods themselves. eBay has no way of inspecting or reviewing the goods to determine whether the goods are fake or real. (Although, eBay’s level of promotion and general knowledge regarding counterfeits of Tiffany products on its website may raise a question regarding false advertising versus fair use.)

YouTube does have possession, custody and control over the submissions of users. (YouTube requires that videos posted to its website be uploaded to its servers.) Viacom had evidence that YouTube monitors the content of its website. See Page 39 and footnote 20 of Viacom’s Opposition to YouTube’s Motion for Summary Judgment and YouTube’s Answer to the First Amended Complaint at ¶ 39:

“Defendants admit that the Terms of Use contain certain content-based restrictions on the types of videos users may upload and store on the service, and that YouTube reserves the right to remove from the service material uploaded in violation of YouTube’s Terms of Use.”

The Court quickly brushes aside YouTube’s “monitoring” as defensible as part of providing online service citing 17 U.S.C. § 512(m)(1) and monitoring for cataloging or editor review to provide information location tools under 17 U.S.C. § 512(d). See Pages 14 and 16.

However, YouTube’s affirmative step of reviewing video posts for content should present not only a question of fact (the case was decided on summary judgment), but also a different analysis than eBay. The standard must be raised for an internet service provider who monitors and reviews the content. YouTube chooses the content it wants to make available on its website.

Unlike eBay, YouTube knows what goes up on its website. While there is apparently less monitoring now, it does not change the fact that YouTube specifically monitored the content being posted for more than mere categorization. See Footnote 20 of Viacom’s Opposition to YouTube’s Motion for Summary Judgment.

As alleged in the Complaint, YouTube was actively looking for and removing pornography from its website. If such content based decisions were being made by YouTube, YouTube is more than an online service provider and merely adhering to the safe harbor provisions is a cop out.

A higher standard must be applied when content is being reviewed in the first instance and more than for references to “pirating,” as proposed by the Court’s decision as a red flag for copyright infringement. It could not be Viacom’s burden under these circumstances to know which specific videos were monitored. YouTube is in complete control of the videos and the decisions after reviewing the content of its posts – both general and specific. (If YouTube does not keep records or tracking of the specific videos reviewed for content, how could YouTube prove that their knowledge was only general? Again this is another instance of a factual inquiry which should not have been resolved at summary judgment.)

While the Court takes some solace in the success of the notice and takedown provisions under the DMCA by claiming that the problem is fixed after notification to YouTube, it is of little solace to the copyright content owners whose exclusive rights and work value is already diminished.

Perhaps fittingly and unwittingly, in quoting the eBay decision, there is an indication that there is a solution for Viacom and other content providers: “Some contemporary knowledge of which particular listings are infringing or will infringe in the future is necessary.” See Page 20.

Perhaps, the proposal in the previous posting that Viacom could put everyone on general notice (and perhaps YouTube on specific notice) that none of its content is permitted on the Internet to be streamed and provided an indicator (such as the CBS eye or Comedy Central logo in the corner) may appropriately satisfy the Second Circuit’s requirement for liability.

The Grokster Analogy

The Court’s analogy between Grokster, Fung, Lime Group, and the infamous Napster cases seems to make a better case that Napster and other peer file-sharing website may have been simply before their time and as the law catches up, there may be different results. The Court relies heavily on the statement of Viacom’s General Counsel that the behaviors of Grokster and YouTube are not the same. But I am not sure how this matters or of the complete context of this statement.

In distinguishing YouTube from Grokster, the Court finds that Grokster’s conduct did “not comport with that of a service provider who furnishes a platform on which its users post and access all sorts of materials as they wish, while the provider is unaware of its content, but identifies an agent to receive complaints of infringement, and removes identified material when he learns it infringes.” See Page 23.

Given the broad definition applied to service providers (which would include YouTube), it is difficult to say that Grokster (and for that matter Napster) was not a service provider. Grokster and Napster provided a platform for the exchange of information online. Napster, at its height, was unlikely to be aware of (or even capable of ascertaining) all of the content posted on its website. There is also a clear argument to be made that Grokster had generalized knowledge similar to YouTube. The difference then is really that Grokster and Napster did not have complaint departments and did not or could not remove specifically identified information.

I think that analogizing YouTube to Napster and Grokster and their progeny may have unintended ramifications. It would seem all you need is a DMCA notice and takedown policy and Napster, in its previous form, would still be around today.

Viacom v. YouTube, Part I

2010-06-30T19:24:00.000-04:00

Last week, the Southern District of New York ruled in favor of YouTube in the Viacom case. In deciding Cross-Motions for Summary Judgment, the Court held that YouTube is protected under the “safe harbor” provision of section 512(c) of the Copyright Act.

See Opinion here.

While a lot of credit is given to YouTube for having removed the specific videos requested following the DMCA notice, there are some troubling aspects to this decision.

First, the critical question for the Court was whether the service provider has actual knowledge or “in the absence of such knowledge, is not aware of facts or circumstances from which infringing activity is apparent” is meant to be a general awareness of infringements or a specific infringement of individual items. (The quote is not from the opinion but from the actual statute 512(c)(1)(A)(ii).)

The Court then goes on to discuss the “red flag” test in the legislative history of the Senate and House Reports – “whether infringing activity would have been apparent to a reasonable person operating under the same or similar circumstances – an objective standard should be used.” (See Opinion at page 10.)

Later in the legislative history, an example of a red flag would be a directory that typically uses the terms “pirate” “bootleg” or other slang terms in their URL and header information to make their illegal purpose obvious to other Internet users. (See Opinion at page 12.) This avoids “discriminating judgments about potential copyright infringement from online editors and catalogers creating search information. (See Opinion at Page 13.)

The legislative history concludes that awareness “should typically be imputed to a directory provider only with respect to pirate sites or in similarly obvious and conspicuous circumstances, and not simply because the provider viewed an infringing site during the course of assembling the directory.” (See Opinion at Page 15.)

This leads the Court to the decision that there must be more than mere knowledge of infringement in general but specific and identifiable infringement for individual items. The Court relies on the Perfect 10 case regarding DMCA notification where the Court will refuse to shift the burden from copyright owner to provider. This gives the impression that the burden will never shift. This may produce a much more chilling effect than, I think, the Court may have intended. This gives copyright owners no incentive to provide their content online. I do believe that it is possible some people may label materials “pirated” but most people are smart enough to avoid such a keyword that would raise a “red flag.”

However, would the circumstances be different if Viacom and/or others did not allow their content to be reproduced on the Internet. Could the red flag and general and specific awareness be implied from the well-known fact that the content provider does not permit the reproduction of its material for media online?

Could the simple solution be a campaign informing the public and/or a specific letter to YouTube claiming that all episodes of Show X are not available on the Internet or streaming media? Any copies in said form are unauthorized infringing copies for which no user has permission. Would this be the criteria necessary for specific knowledge for any individual posting?

Leading By Example

2010-06-23T17:20:00.000-04:00

Yesterday, the U.S. Intellectual Property Enforcement Coordinator (“IPEC”), released the 2010 Joint Strategic Plan on Intellectual Property Enforcement (“Report”). As part of the PRO-IP Act, this report is a required follow up on the enforcement initiatives and economic impact of counterfeiting and piracy for intellectual property.

Perhaps, the oddest highlight was right in the very beginning as part of the objectives for the government to protect American intellectual property rights was to get the federal government to stop using and purchasing infringing materials. (Later, the report specifies the particular problem that government contractors may be using infringing copies of software.)

On one hand, it is commendable that the government is willing to recognize that intellectual property enforcement is a problem even internally, on the other hand, if the government cannot clean up infringement of intellectual property internally, it is somewhat hypocritical to expect the government to enforce intellectual property rights against others.

Perhaps the subtitle explains it best “Leading By Example.” (See page 7 of Report.) The IPEC will also measure public perceptions of intellectual property rights. (See page 47.)

Other highlights of the Report include:

The continued consideration for confidentiality in international trade negotiations. (Page 8)
A shared governmental database regarding ongoing investigations and cases regarding intellectual property infringement (Page 11).
A heavy focus (and rightfully so) on counterfeit pharmaceuticals including a Counterfeit Pharmaceutical Interagency Committee (Page 13).
Lots of facts about the economic impact of intellectual property and enforcement including:
- An 800% increase in i.p. investigations and prosecutions in the last 10 years (Page 29).
- 50 FBI Special Agents pursuing intellectual property investigations (Page 30).

BATTLES IN SEATTLE (Part 3 of 3)

2010-06-18T17:17:00.001-04:00

We're back with the third and final round in our "Battles in Seattle" series.

Round 3 - MDY Indus. v. Blizzard Entertainment

Blizzard Entertainment and Vivendi Games (“Blizzard”) are the creators and operators of the popular Massively Multiplayer Online Role-Playing Game (MMORPG) World of Warcraft. Blizzard owns the copyright for the World of Warcraft software. MDY Industries created a bot (short for robot) known as WowGlider. The WowGlider bot plays World of Warcraft for its user while he or she is not playing, thus enabling WowGlider users to advance, and attain experience and game assets more quickly within World of Warcraft than other players. MDY sought declaratory judgment that its Glider program did not infringe Blizzard’s copyright and Blizzard counter-claimed against MDY for trademark infringement, contributory and vicarious copyright infringement, tortuous interference with contract, violation of the DMCA, unfair competition and unjust enrichment.

In arguing against Blizzard’s counerclaims, MDY urged the District Court to adopt the Western District of Washington’s decision in Vernor v. Autodesk, Inc. and find that WoW players are owners of the software because they are entitled to keep the copy of the software they acquire from Blizzard. The District Court of Arizona did not adopt MDY’s position.

The District Court of Arizona granted summary judgment in favor of Blizzard with respect to MDY's liability for tortious interference, contributory copyright infringement, and vicarious copyright infringement. The court granted summary judgment in favor of MDY on a portion of the DMCA claim and on the unfair competition claim. In making its ruling on Blizzard's copyright infringement claims, the Court inquired whether purchasers of WoW owned their copy of the game. Pursuant to to 17 U.S.C. § 117, owners of computer programs are allowed to create copies or adaptations of the computer program if it is an essential step towards utilization of the program. The Court found that WoW purchasers were not owners of their copy of the game but rather were licensees. Thus, the players are required to adhere to the End User License Agreement and the Terms of Use set by Blizzard in order to play the game. Blizzard expressly prohibits "the use of bots or third-party software to modify the WoW experience" in the Terms of Use and End User License Agreement. Thus, the Court found that players who use Glider violated the Terms of Use and were not licensed to use WoW and therefore the copying of the World of Warcraft software to RAM constituted copyright infringement.

Unlike UMG Recordings Inc. v. Augusto and Vernor v. Autodesk, Inc., the oral arguments in MDY Indus. v. Blizzard Entertainment dealt predominantly with the contractual issues and the validity of shrinkwrap licenses. Counsel for MDY argued, along the lines of Vernor, that Blizzard’s End User License Agreement and Terms of Use were merely labeled as licenses but were not and that merely stating in the contract that a certain action was copyright infringement did not make is so.

You can listen to the oral argument in its entirety here.

BATTLES IN SEATTLE (Part 2 of 3)

2010-06-17T16:29:00.007-04:00

Today is the second part of our three part series discussing the oral arguments in a trio of copyright cases presented to the Ninth Circuit on June 7, 2010.

Round 2 - Vernor v. Autodesk, Inc.

Autodesk holds the copyright in AutoCAD, a 3-D modeling software program that sells for approximately $4,000. AutoCAD is sold with a shrinkwrap license which prohibits, among other things, resale of the software. In addition, AutoCAD is sold in sealed boxes for a fixed price with no-recurring fees or expirations for use.

Craig Vernor purchased several copies of AutoCAD from an architecture firm and listed those copies on Ebay and ultimately sold two copies for approximately $400 per copy. Autodesk sent Ebay a takedown notice claiming copyright infringement. Vernor responded with a counter-notice stating that he was reselling legitimate software. As a result of additional complaints from Autodesk, Ebay suspended Vernor’s account for a month.

Vernor then filed a declaratory judgment lawsuit in Federal District Court seeking a holding that he did not infringe upon Autodesk’s copyright. The District Court held in Vernor’s favor, finding that his actions were protected by the first sale doctrine and that his resale of legitimate copies of AutoCAD did not infringe Autodesk’s copyright. Autodesk counter-claimed for copyright infringement and contributory copyright infringement

Autodesk argued that it retained ownership of the copy of the software by virtue of the license agreement, and that the copy was merely licensed and not owned by the original purchaser. Therefore, Autodesk products could not be resold to third parties because only an "owner of a copy" has rights under the first-sale doctrine, as codified 17 U.S.C. § 109(a). Vernor was thus infringing Autodesk's copyright and Autodesk was within their rights to block such sales. Autodesk further claimed that, because the CD was a mechanism for making a copy of the software, Vernor enabled his clients to make unlicensed copies of Autodesk software and Vernor was liable for contributory copyright infringement.

The District Court noted a conflict in the precedent. The Court noted that the transfer of software from Autodesk accompanied by a restrictive license under the MAI Sys. Corp. v. Peak Computer, Inc., 991 F.2d 511 (9th Cir. 1993), Triad Sys. Corp. v. Southeastern Express Co., 64 F.3d 1330 (9th Cir. 1994), and Wall Data, Inc., v. Los Angeles County Sheriff's Dept., 447 F.3d 769 (9th Cir. 2006) cases would not be a sale and the first-sale doctrine would not apply, and thus Vernor would not be permitted to redistribute the software. However, under United States v. Wise, 550 F.2d 1180 (9th Cir. 1977), Vernor would be protected under the first-sale doctrine because the transfer of copies of Autodesk's software implies a right of perpetual possession of the copy. Given the conflicting precedents, the court felt compelled to rely on the earliest precedent, Wise, and thus found in Vernor's favor.

The oral arguments in Vernor v. Autodesk, Inc. centered on whether or not the sale of a software CD was a sale or a license. Counsel for Vernor likened this situation to that of Bobbs-Merrill Co. v. Straus (the 1908 Supreme Court case where Bobbs-Merrill sued Macy’s for selling copies of a book for 89 cents when the book publisher printed a "license agreement" in the front flap of the book, stating that any book dealer who sold the book for less than one dollar would be liable for infringing the publisher's copyright. The Supreme Court ultimately ruled that merely labeling something a "license” does not make it a license, and that resellers could sell the book at 89 cents.). When a justice challenged this analogy, counsel for Vernor noted that Autodesk had no expectation of getting the CD back once it was sold, thus the realities of the transaction are inconsistent with Autodesk’s assertions that they retain ownership in the copy. Autodesk’s counsel, meanwhile, focused upon the impact on the software licensing system and the industry as a whole. Autodesk also noted that the significant restrictions, enumerated in the shrinkwrap license, attendant to the use of the AutoCAD software indicate that users are truly licensees, rather than “owners”. Autodesk’s attorney argued that it does own the individual copies of its software that users purchase, Autodesk just doesn’t have any interest in getting them back. (This statement in particular might prove troublesome for Autodesk).

Implications: If the District Court’s ruling in Vernor v. Autodesk is upheld it may harmonize the application of the first-sale doctrine by treating used copies of software like used books, music CDs, and movie DVDs. On the other hand, the foundation of the software industry’s business model may be damaged, requiring a restructuring of software sales going forward and potentially raising software prices.

Listen to the oral argument in its entirety here.

Stay tuned...The third and final round of our "Battles in Seattle" series takes place tomorrow!

BATTLES IN SEATTLE (Part 1 of 3)

2010-06-16T18:56:00.003-04:00

In the copyright context, the determination of whether an individual or entity is a licensee rather than an owner of the copy can depend on the actions of the parties, despite contractual writings and notices. Whether an individual is an owner or a licensee can have an impact on the application of the copyright first sale doctrine.

On June 7, 2010, the Ninth Circuit panel sitting in Seattle, Washington heard oral arguments in UMG Recordings Inc. v. Augusto (a copyright first sale case about promotional sound recordings purchased at used music stores), Vernor v. Autodesk, Inc. (a copyright first sale case involving the sale of software on Ebay), and MDY Indus. v. Blizzard Entertainment (a copyright case related to software code in the computer game World of Warcraft).

With this trio of cases, the Ninth Circuit is presented with three different fact patterns. When considering these cases, the Court must determine, among other things, under what set of circumstances can a transaction be deemed a license and what constitutes a sale.

Copyright Chronicle will be covering each of these cases in a three part series over the next three days.

The parties are in their corners. Let’s get ready to RUMBLE!

Round 1 - UMG Recordings Inc. v. Augusto

As is common practice in the music industry, UMG sends out promotional CDs to radio stations, music reviewers, and other industry insiders prior to the official CD release. The promotional CDs contain labels with language substantially similar to the following:

“This CD is the property of the record company and is licensed to the intended recipient for personal use only. Acceptance of this CD shall constitute an agreement to comply with the terms of the license. Resale or transfer of possession is not allowed and may be punishable under federal and state laws”.

Some recipients do not adhere to the instructions on the promotional CDs and sell them. Troy Augusto purchased a large collection of promotional CDs, including many UMG promotional CDs, from used record stores around Los Angeles and then sold the CDs on eBay. The Recording Industry Association of America Acting (RIAA), acting on behalf of UMG, sent Augusto a cease and desist letter and takedown notices, alleging that his sale of UMG's promotional CDs violated the terms of the promotional license and constituted copyright infringement. Augusto continued to sell the promotional CDs and UMG filed a suit claiming that Augusto's unauthorized sale of the promotional CDs violated UMG's copyright in the sound recordings featured on the CDs, specifically the exclusive right to distribute its works under 17 U.S.C. § 106(3).

Augusto asserted that the first sale doctrine, claiming that UMG disposed of the promotional CDs thus the first sale had been exhausted and UMG was prohibited from controlling further downstream transactions by 17 U.S.C. § 109(a).

The District Court held that UMG transferred title in the physical CDs to the initial recipients, and did not, as it argued, merely license them for a limited purpose to a limited group. The court relied in part on an obscure postal statute, 39 U.S.C. § 3009, which characterizes unordered merchandise as a “gift.” The District Court then held that the first sale doctrine applies to a copyrighted work after the "first authorized disposition by which title passes” thus finding that Augusto’s actions were protected by the first sale doctrine.

The oral arguments before the Ninth Circuit focused predominantly on defining the transaction between UMG and “industry insiders”—whether the promotional CDs were licensed to the intended user or whether they were a gift because they were unsolicited. Counsel for Augusto conceded that it was the Defendant’s burden to establish a first sale defense and argued Augusto had carried his burden by pointing to the actions of UMG and its relationship with recipients of the promotional CDs.

Check back tomorrow for Round 2!

My School Infringed My Homework

2010-06-10T10:57:00.002-04:00

On May 13, 2010, the blog located at Redstate.com posted Elena Kagan’s senior thesis To the Final Conflict: Socialism in New York City, 1900-1933 from Princeton University.

Subsequently, the blogger received a notice from Princeton University to remove the copy of the thesis from her website. See notice here. The Princeton University Archives claims that the copies provided are governed by U.S. Copyright Law, are for private individual use only and electronic distribution is prohibited.

This got me thinking…how did Princeton University Archives obtain rights to this thesis? Clearly Princeton University could not claim that they were the author, unless the student, in this case, Elena Kagan, was employed by Princeton University and the thesis was prepared in the context of her employment. (Ed. – for what students pay to attend most universities, no student produced material should ever be considered a work made for hire.) The rights of an educational institution with respect to a student - produced work is quite a quagmire and includes issues of authorship and fair use / educational purposes defenses, among others. It should not be.

The student created the work. The student should be free to do what they wish with the work and not be subjected to what the school would do with the submitted work. At least on this level I will give Princeton some credit….

This is when I found a copy of the senior thesis of Michelle Obama (then Robinson) from Princeton University on the Politico blog and figured out what Princeton University had – a limited license.

The introductory pages to Michelle Obama’s thesis provided an explanation. The title page includes a notice that the writing is "a thesis presented to Princeton University in partial fulfillment of the requirements for the degree of Bachelor of Arts in Department of Sociology.” See Michelle Obama Senior Thesis. The following page provides that the student authorizes "Princeton University to lend this thesis to other institutions or individuals for the purposes of scholarly research.” Id at page ii.

In addition, the student “further authorize[s] Princeton University to reproduce this thesis by photocopying or by other means, in total or in part, at the request of other institutions or individuals for the purpose of scholarly research.” Id at page ii.

This raises a slew of issues. The first being whether an authorization/license should be viewed as void as a contract of adhesion. A senior thesis is one of the requirements to obtain a degree. However, if included in that requirement is an obligation to also authorize Princeton University to lend and reproduce the senior thesis, then I would consider that a contract of adhesion and void on its face. (Full disclosure: I do not know if Princeton University requires such an authorization but even if it merely included this language giving the students the impression that this authorization was part of the submission process, this would certainly give rise to a question as to whether this is a contract of adhesion and whether the license should be void.)

While it may be admirable that Princeton University shows that they are concerned with the exclusive rights of copyright granted to their students, there is some doubt as to their altruistic nature of invoking these rights on behalf of their students.

Following the nomination of Elena Kagan, the Princeton University Archives at the Mudd Manuscript Library (the same representative that wrote the cease and desist letter to Redstate.com) website posted information on obtaining Elena Kagan’s senior thesis found here. The website offers an electronic copy of the thesis by electronic pdf for only $54.60. (Kagan’s thesis is 156 pages which makes the costs roughly $.35 per page.) In addition, Princeton University claims that “Due to copyright considerations, the entire thesis cannot be provided online.”

Legally, Princeton University’s actions are reprehensible for multiple reasons. First, it is the author (i.e. Elena Kagan) who is the copyright owner. As the copyright owner, she is entitled to certain exclusive rights under 17 U.S.C. § 106 including the right to distribute, sell, and publicly display, among others. Princeton University owns a non-exclusive limited license. Princeton does not own the copyright nor does it have an exclusive right under the copyright. In legal terms, Princeton lacks standing. It has no authority to enforce Kagan’s copyright against others and its ability to stop others is completely lacking. Sending the cease and desist letter could be nothing more than a mere threat, as Princeton had no authority to enforce the copyright against the Redstate blogger.

Perhaps, more alarming, however, is the fact that Princeton University clearly has overstepped its bounds and the terms of its license. It is certainly more than hypocritical for Princeton to use the copyright laws as way to stop others from using the copyrighted work when Princeton is itself violating the exclusive rights of the copyright owner which were not granted to Princeton University. There is a clear case for copyright infringement by Princeton University. (Maybe the Redstate blogger should have written a cease and desist letter to Princeton University.)

Under the license provided in the Michelle Obama senior thesis, Princeton is allowed to lend and reproduce the thesis for the purposes of scholarly research. While Princeton may have been granted a license to reproduce and lend the thesis, there is no right to sell the work. It is most alarming that Princeton University clearly was charging money for the copies of the senior thesis. There is nothing in the license that allows Princeton to charge for Kagan’s work. The price is far from minimal. (If this were a 156 page book produced by a major publishing house, I doubt the price would be anywhere near $54.60.) Princeton’s website offering Kagan’s senior thesis includes nothing about use for education purposes or scholarly research. (Note: This is not a commentary on whether the blogs Redstate.com or Politico do or do not fall within the “educational purposes or scholarly research” category but to point out that from the posting on Princeton’s website – they clearly did not care.)

It is Kagan’s work, not Princeton University’s. I have some doubt that Kagan would seek a copyright infringement action for violation of this license. But the revenue should be Kagan’s. This should be true at every educational level – be it a kindergarten fingerpainting by the future Picasso, a short story in fifth grade from Stephen King, or a high school poem by Maya Angelou – the student is the author. Educational institutions should not be able to profit from students’ work submitted for grading.

A copyright course would benefit Princeton University – but it should be mandatory and not just for the students.

Weekly Wednesday Wrapup - Update Edition

2010-06-02T13:24:00.000-04:00

This week we follow up on updates from previous columns:

Limewire asks that the district court reconsider its finding of copyright infringement. Two week ago, summary judgment was entered against Limewire on grounds of copyright infringement.

In its motion to reconsider, Limewire claims there was error where the judge did not consider conflicting evidence and resolving the conflicting evidence in Limewire’s favor (as the non-moving party). Such motions for reconsideration are rarely granted. Denying summary judgment would require issues of material fact.

Based on the decision, I do not see Limewire getting too far with this argument especially on a motion for reconsideration. I will keep looking to see if Limewire follows through and files an appeal to the Ninth Circuit.
Two weeks ago, I also included an article regarding the producers of “The Hurt Locker” potentially filing lawsuits against those who downloaded the movie from BitTorrent. The lawsuit has been filed against 5,000 defendants. See Complaint here.

Maybe producers of motion pictures will file more of these lawsuits to fill the gap in the number of copyright lawsuits now that the RIAA is no longer pursuing illegal downloaders of music. See Blog Entry of May 19, 2010.
Finally, the Don Henley / Chuck Devore lawsuit regarding the parody defense which changed the lyrics to “The Boys of Summer” and “All She Wants to Do Is Tax” has been briefed for summary judgment. Cross motions for summary judgment were filed.
- Henley opposition brief
- DeVore opposition brief
A hearing was scheduled for yesterday. It would seem to be a tough sell for DeVore to show how his videos “parody” Henley’s songs especially given the commentary directed at politicians Barbara Boxer and Barack Obama not the subjects of Henley’s songs. This parody / social commentary argument was recently rejected in the Salinger case because the parody must be on the work itself not on the artist or another topic. 641 F. Supp. 2d at 256-257.

Weekly Wednesday Wrapup - MORE THAN MEETS THE EYE

2010-05-26T11:28:00.004-04:00

According to Wired, Paramount Pictures, the production company behind the Transformers movie franchise, is claiming that a video showing people filming footage for the Transformers 3 movie posted on YouTube constitutes copyright infringement. The video in question is 3 minutes long and shows the movie crew standing around, followed by a few seconds of a hydraulic lift shooting a car 100 feet down an alley. You can see a snippet of the original YouTube video here.

So far, Paramount has issued a DMCA take down notice prompting YouTube to the video. Ben Brown, the poster of the YouTube video, has filed a counter-notice contesting Paramount’s claims.

Is the posting of this YouTube video copyright infringement or is Paramount impermissibly using copyright law to shut down a legitimate video?

It depends.

In order to have a copyright, you must have a work fixed in a tangible medium. Paramount cannot claim a copyright in the footage until it is filmed. Thus, if Ben Brown shot his video at the same time that Paramount was shooting its scene, fixation could have arguably occurred simultaneously, thus both Paramount and Ben Brown own copyrights in their respective footage. However, if Paramount created copyrightable story boards for the action sequences, unauthorized filming and posting of the live action scene could be considered an infringing derivative work of the story boards.

Even assuming Paramount has a valid copyright claim, there is still a defense of de minimis copying. The footage of the crew preparing for filming is probably not part of Paramount’s shoot (unless it is being filmed by Paramount for “making of” features for the DVD release) and the actual action sequence that was filmed was only a few seconds long. In the context of the amount of footage Paramount will film for the movie (hundreds of hours) or even the final product (approximately two hours), Ben Brown’s snippet could be considered de minimis copying.

It could further be argued that Ben Brown’s YouTube video would not replace the market for the original feature length film. However, Ben Brown’s YouTube video could impact the sale of DVDs, which often include DVD extras such as deleted scenes and “making of” features.

Oren Gelber is an associate at Collen IP. She is guest posting while Tom is in Boston for INTA 2010.

Weekly Wednesday Wrapup

2010-05-19T10:54:00.000-04:00

This week the big copyright news story was the RIAA victory against Limewire, a file sharing website for copyright infringement. See Decision here. In the course of the decision, the Court specifically notes the success of the RIAA against individuals. See Decision at footnote 22.

Is this the zenith for the recording industry in lawsuits for copyright infringement for file sharing?

Quite possibly as the recording industry has claimed that it will stop pursuing file sharing copyright infringement lawsuits. [Wall Street Journal]

The number of copyright infringement lawsuits nearly doubled from 2004 to 2005 (just under 6,000 lawsuits filed) when the RIAA lawsuits for file sharing were ramping up. However, a steady decline in the number of lawsuits has occurred to the point were the number of copyright infringement lawsuits is slightly more than 2,000.
Source: Administrative Office of the Courts

As one set of copyright owners may be ending its lawsuits on file sharing…BitTorrent may be the next target. As technology advances, the spectrum and size of the files to be shared grows. The producers of the Best Picture – “The Hurt Locker” are threatening suit and to learn the identities of BitTorrent users that illegally copied the movie. [ABC News]

Given that the RIAA has paved the way with its successes in copyright infringement actions and learning the identities of downloaders through ISP subpoenas, the MPAA and its members may have an easier time stopping infringements (and possibly fewer lawsuits filed for movie downloads).

Weekly Wednesday Wrapup - May 12, 2010

2010-05-12T18:29:00.000-04:00

FIRST SALE FRENZY: On June 7, 2010 the Ninth Circuit will hear appeals in UMG Recordings Inc. v. Augusto, a first sale case involving promotional sound recordings sold on Ebay; Vernor v. Autodesk, Inc., a first sale case involving software; and MDY Indus. V. Blizzard Entertainment, a first sale case involving software code in World of Warcraft video game.

Google filed for declaratory judgment claiming DMCA protection claiming that Google timely removed and/or disabled links to Plaintiff’s DMCA takedown notice where Plaintiff, a record company alleged and filed a previous suit for contributory and vicarious copyright infringement when RapidShare links appeared in internet searches on Google and Microsoft search engines. Plaintiff previously contested that Google and Microsoft responded to the DMCA takedown letter. The case raises issues about responses to DMCA takedown notices as well as the boundaries of contributory and vicarious copyright infringement.

In a case initially filed in the Southern District of New York and recently transferred to Central District of California, over 40 photographers, owners of photography copyrights and the organization that operates the San Diego Zoo are seeking more than $11 million in damages from the fast-food chain Taco Bell for copyright infringement.

Catcher in the P.I. (preliminary injunction)

2010-05-11T15:45:00.001-04:00

The April 30, 2010 decision by the Second Circuit has been the subject of many reports – predominantly regarding the likelihood of success for the Trustees of the J.D. Salinger literary trust. However, there is a separate and independent significance within the decision – the scope of the eBay decision by the Supreme Court [547 U.S. 388 (2006)] on injunctive relief. The Second Circuit’s decision remanded and vacated the preliminary injunction order (with a ten day stay to allow for Salinger’s estate to seek a temporary restraining order).

For a preliminary injunction to issue, the plaintiff must demonstrate,

“a likelihood of success on the merits or sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly in [plaintiff]’s favor…[and] that [plaintiff] is likely to suffer irreparable injury in the absence of an injunction…” (Page 18) (citations omitted)

The Court must also consider,

“the balance of hardships between the plaintiff and defendant and issue the injunction only if the balance of hardships tips in the plaintiffs’ favor…[and] the public interest.” (Page 18) (citations omitted).

The Second Circuit has adopted the eBay test for not only permanent injunctions in the patent context but has broadened the test to copyright cases and in the preliminary injunction context. In addition, the Court removed any rule or presumption of irreparable harm on the basis of a likelihood of success on the merits. Interestingly, before providing its opinion that there is a likelihood of success on the merits under the facts of the case, the Court did advise that courts should be aware that it is difficult to predict “the merits of a copyright claim at a preliminary injunction hearing.” (Page 19) Specifically, the court cited to the limited briefing time, the fact-intensive inquiry of substantial similarity and varying perceptions of fair use. (Page 19)

Will this decision make it more difficult for injunctions in copyright infringement actions? What do you think?

The Salinger brief can be found here.
The Colting brief can be found here.

Weekly Wednesday Wrapup - May 5, 2010

2010-05-05T11:52:00.029-04:00

This week the Second Circuit and rappers bring the headlines in copyright news:

Remember: Copyright does not cover ideas including pureeing vegetables to “sneak” them into kids' diets. The Second Circuit Court of Appeals, upheld a lower court’s decision that no copyright infringement occurred as Jessica Seinfeld’s cookbook Deceptively Delicious: Simple Secrets to Get Your Kids Eating Good Food was “very different” from Missy Chase Lapine’s cookbook The Sneaky Chef: Simple Strategies for Hiding Healthy Foods in Kids' Favorite Meals. See order here.

Second Circuit upholds RIAA’s method of obtaining identities of alleged copyright infringers who downloaded music through subpoenas of internet service providers. See order here.

Second Circuit vacates preliminary injunction and remands to district court to follow the Supreme Court’s decision in Ebay v. MercExchange where court finds likelihood of copyright infringement of The Catcher in the Rye and its main character Holden Caufield by Fredrik Colting and his book 60 Years Later: Coming Through the Rye. See order here.

Now onto the rappers:

Lil Wayne has been sued for copyright infringement by rapper Dirahn Gilliams who claims Lil Wayne used portions of his song “Grinding Like A Goon” in the multi-platinum hit “Lollipop”.

Continuing with the hip hop theme, Akon filed a copyright lawsuit in the Southern District of New York against Konvict cosmetics over their Konvict fragrance. According to the rapper, he had been in talks with the company over a fragrance line, however no deal was actually finalized.

And in other news:

Don Henley has sued the Republican Senate hopeful Chuck DeVore for copyright infringement after Devore retooled Henley’s songs “The Boys of Summer” and “All She Wants to Do is Dance” to “Hope of November” and “All She Wants to Do is Tax” in campaign videos.
See complaint here.

Weekly Wednesday Wrapup - April 28, 2010

2010-04-28T10:10:00.009-04:00

2 DAYS LEFT – DEADLINE APRIL 30, 2010 5PM
The U.S. Copyright Office is seeking comments on termination rights particularly for those grants which occurred prior to the enactment of the 1976 Copyright Act on January 1, 1978 AND the creation of the work began after the enactment of the 1976 Copyright Act on January 1, 1978. An example is provided by the Copyright Office. Send comments here.
Commentary on Radio Royalties and whether performers should be paid royalties for airplay on AM/FM radio.

In what ways, if any would the payment of royalties for performance affect airplay on the radio? What if for instance certain record companies or artists “waived” their royalties for radio airplay? Would radio stations give more spins to performance royalty-free songs? What do you think?

Ripped from the Headlines takes on a whole new meaning as Dow Jones alleges copyright infringement and hot news misappropriation against Briefing.com for copying and re-publishing Dow Jones headlines and articles.
Aquarium Facebook games faceoff in copyright infringement action.
Copyright infringement alleged against former student by professor for course materials in teacher’s certification program.

Weekly Wednesday Wrapup - April 21, 2010

2010-04-21T10:10:00.005-04:00

This past week has been very eventful in terms of copyright law news. Below is a listing with links of some of the headlines from the past week.

Supreme Court to decide copyright first sale doctrine case – Costco v. Omega
More documents made public in Viacom v. YouTube copyright infringement lawsuit.

Individual documents here:
Exhibit 52, Exhibit 59, Exhibit 60, Exhibit 63, Exhibit 81, Exhibit 242, Exhibit 314 , Exhibit 321, Exhibit 340
Frankie Valli files copyright infringement lawsuit against former Jersey Boys.
Library of Congress will retain public tweets.
Also, the coincidence of the week, the approval process has started for a futures investment market for box office sales in the first week of release.

This has not received a warm welcome from the motion picture studios. For the past 2 weeks, the results of the box office have been too close to call with later revisions determining the projected winner in fact was in second place.
And finally, just when you thought it was safe to send out cease and desist and offers to settle letters to copyright infringers…..apparently computer hackers are threatening copyright infringement lawsuits to scam those who download from BitTorrent.

Has Amazon Revived the Recall Remedy?

2010-04-01T10:08:00.001-04:00

     Recall is a seldom used remedy in intellectual property infringement cases, often due to the difficulties and costs associated with a recall. However, with the downloadable nature of many copyrighted works, the burdens associated with recalls are being minimized. As evidenced by Amazon’s recent recall of George Orwell books, recall may be a remedy worth a second look.

BACKGROUND

     In June 2009, Amazon learned of certain unauthorized copies of George Orwell novels, Animal Farm and 1984 (hereafter, “Infringed Works”) which were available for sale for Amazon’s electronic book reader, the Kindle.[1]

     Between July 16th and 17th, 2009, Amazon voluntarily went into their customers’ personal Kindle devices and remotely removed versions of George Orwell’s “1984” and “Animal Farm,” without prior notice. In an email Amazon justified the recall by explaining that the legal copyright holder of the Orwell works had notified them that their purchased versions were not authorized. Amazon refunded all money that Kindle users paid for the Infringed Works. No court ordered Amazon to undertake this task. Purportedly, Amazon has also recalled books by Ayn Rand and J.K. Rowling in 2009 by simply removing them from customers’ Kindle readers.[2]

     Despite two separate apologies issued by Amazon and a promise to refrain from conducting additional recalls, many Kindle customers voiced their displeasure and frustration with Amazon’s actions.[3] One such customer, 17-year-old Justin Gawronski, had bought “1984” for his summer reading project. When Amazon took his copy back, Mr. Gawronski only retained his notes, which were useless without the text that went along with them.[4]

     Mr. Gawronski bought his copy of the book for 99 cents sometime during June 2009. Another customer, Antoine J. Bruguier, purchased another version of the same book on April 25, 2009 for $3.20. Different prices and different copies on the Amazon e-book store might have been an early indicator to Amazon that it may have been selling copies from questionable or infringing sources.

     Mr. Gawronski and Mr. Bruguier filed a lawsuit against Amazon.com, Inc. and Amazon Digital Services, Inc., which runs the portion of the company that sells the Kindle. The case was filed in U.S. District Court in Seattle on July 30, 2009.[5] They claimed trespass to chattel, conversion, breach of contract, and violation of both the Computer Fraud and Abuse Act and the Washington Consumer Protection Act. The pair requested the court award them unspecified damages and asked to be certified as a class. The suit alleged, “…Amazon violated [The Computer Fraud and Abuse Act] by intentionally accessing Plaintiffs’ Kindles, protected computers, without authorization, and as a result, caused damage to Plaintiffs’ Kindles by remotely deleting content stored on them."[6] The suit also requested that the company remove its ability to remotely delete material off users’ Kindle devices.[7]

     In response to the Gawronski/Bruguier lawsuit, the parties entered into a settlement agreement approved by the Court.[8] The settlement terms include Amazon’s offer to provide a copy of the e-book they purchased at no charge, or a check, or an Amazon gift card in the amount of $30. In addition, Amazon agreed not to remove e-books in the future unless (1) the consumer consents; (2) the consumer fails to pay; (3) removal is necessary to protect the Kindle or the network; or (4) it is required by a court or regulator to do so.[9]

     While potentially appeasing its customers with modifications to its Terms of Service, did Amazon in the process revive the remedy of recall?

RECALL AS A REMEDY

     Courts have infrequently imposed recall of infringing items upon violators (more often used in the context of trademark and unfair competition than copyright infringement actions). Courts often find such a remedy “unduly burdensome”.

     Courts derive their power to impose a recall from the broad equitable powers inherent in Federal Court jurisdiction. See Hecht Co. v. Bowles, 321 U.S. 321, 329, 64 S.Ct. 587 (1944). In Perfect Fit Industries, Inc. v Acme Quilting Co., Inc., 646 F.2d 800 (2d Cir. 1981), the court imposed a recall under New York state unfair competition and trademark infringement laws. In this case, the defendant infringed the plaintiff’s mattress pad design. The district court ordered a recall, and the defendant appealed. The Second Circuit affirmed the lower court’s order, stating that a recall is “well within the district’s court’s broad powers as a court of equity…” and that recall was a proper remedy and exercise of the district court’s power. Id. at 805. The court decided recall was appropriate because it would “naturally hasten the removal of the offending materials …and therefore seek to end quickly the injury to Perfect Fit.” Id. at 807. The court rejected Acme’s argument against recall as “unduly burdensome.” The court stated:

Finally, we note that there is federal precedent for use of the recall remedy in cases such as this. See Kiki Undies Corp. v. Promenade Hosiery Mills, Inc., 308 F.Supp 489 (S.D.N.Y. 1969) (on remand from 411 F.2d 1097 (2d Cir. 1969), cert. dismissed, 396 U.S. 1054, 90 S. Ct. 707, 24 L. Ed. 2d 698 (1970)); Sweetarts v. Sunline, Inc., 299 F. Supp. 572 (E.D. Mo. 1969) aff’d in part and rev'd in part on other grounds, 436 F.2d 705 (8th Cir. 1971); Clairol Inc. v. Shapiro, 158 U.S.P.Q. 427 (C.D. Cal. 1968). See also Cutler-Hammer, Inc. v. Standard Relay Corp., 328 F. Supp. 868, 881 (S.D.N.Y.1970), aff'd per curiam, 444 F.2d 1092 (2d Cir. 1971). The circumstances in Kiki Undies were remarkably similar to those of the present case, except that the plaintiff's claim was decided under federal trademark laws rather than under state laws of unfair competition. The injunctive order fashioned by the district court required the defendant, inter alia, to use its best efforts, on a continuing basis, to withdraw the offending materials from all customers, retailers and other persons.

     Recall has also been fashioned as a remedy in copyright infringement cases. See Gund v. Golden Bear Co., Ltd., 1992 U.S. Dist. LEXIS 18712 (S.D.N.Y. 1992). In Gund, the plaintiff moved for an injunction against defendant Golden Bear seeking to enjoin it from selling its version of a stuffed dog toy, alleging copyright infringement. Id. at *1. The infringing toys were already widely distributed to K-Mart. A prior order granting Gund’s motion for a temporary restraining order and recall order had been granted by the court. Id. Golden Bear opposed the motion for preliminary injunction and requested that the recall order be vacated. Id. at *2. The court conducted a balance of the hardships and granted Gund’s motion for an injunction and continued the recall order. Id. Since Golden Bear had only one order from K-Mart for the toys and no other pending offers, the Court found greater injury to Gund. The Court did require a $75,000 bond be posted by Gund.

     Expressly rejecting defendant’s argument that a recall was unduly burdensome, the court went on to state that the benefit to Gund of removing the infringing toys from K-Mart’s shelves during the busy holiday season outweighed any burden to the defendant. Id. at *15. In fact, the court expressly found recall “as the only effective remedy.” Id. at *14.

     Some courts have found recall to be an unacceptable remedy. See NBA Props. v. Untertainment Records LLC, 1999 U.S. Dist. LEXIS 7780 (S.D.N.Y. May 25, 1999). In support of its decision to deny a recall against defendant Untertainment for its use of an infringing mark in magazine ads, the court cited to a long line of cases:

Recall orders involving books and magazines are generally denied. See, e.g., Thomas Nelson, Inc. v. Cherish Books, Ltd., 595 F. Supp. 989, 992 (S.D.N.Y. 1984) (granted permanent prohibitory injunction but denied a request for a recall order of the infringing books where the burden and expense to the infringer outweighed the benefits to the trademark owner and the court ordered that the losing party pay for a corrective advertisement); Harlequin Enterprises Limited v. Gulf & Western Corp., 503 F. Supp. 647, 653 (S.D.N.Y. 1980) (granting preliminary injunction against defendant publisher for future publications but denying recall for books not yet shipped which contained infringing cover design and format), aff'd, 644 F.2d 946 (2d Cir. 1981); Orion Pictures Co., Inc. v. Dell Pub. Co., Inc., 471 F. Supp. 392, 397 (S.D.N.Y. 1979) (granting preliminary injunction against subsequent printings of the infringing book but denying plaintiff's request for a recall order because it was impractical to recapture books "already in the hands of retailers and the reading public"); Casa Editrice Bonechi, S.R.L. v. Irving Weisdorf & Co., Ltd., 1995 U.S. Dist. LEXIS 12849, 1995 WL 528001, at *12 (S.D.N.Y. Sept. 6, 1995) (finding a likelihood of success on the merits on plaintiff's claims under section 43(a) and New York's anti-dilution statute for infringement and dilution of its travel books but rejecting the plaintiff's request for a recall order); Universal City Studios, Inc. v. Ideal Publishing Corp., 1977 U.S. Dist. LEXIS 13682 at *6 (S.D.N.Y. Sept. 30, 1977) (recall order denied in part because magazines were already distributed to wholesalers and were on the stands "making recall a practical impossibility").

BALANCING THE HARDSHIPS

     As with any equitable remedy, the court is likely to craft a remedy balancing the hardships on a case by case basis. See Kraft General Foods, Inc. v Friendship Dairies, Inc., 1991 U.S. Dist. LEXIS 18213, *15 (S.D.N.Y. June 26, 1991). Despite finding intentional copying, recognizing the perishable nature of the goods (sour cream) sought to be recalled, the court rejected the effectiveness of imposing a recall, weighing the burdens and impact on the parties at the preliminary stage in the proceedings. Id. As explained above, another main reason recall was denied as a remedy for infringement was due to impracticability. See National Research Bureau, Inc. v. Kucker, 481 F. Supp. 612, 615 (S.D.N.Y. 1979) (court declines to order a recall of defendant’s already distributed directory).

     While there will be myriad arguments on both sides as to why recall may or may not be a proper remedy,[10] it seems that Amazon has demonstrated that in this technological era, the “unduly burdensome” argument against recalls has eroded sharply for many forms and methods of distribution for copyrighted works such as movies, music, and books.

     Downloads of electronic works are readily available. Purchase by download also makes it easier to keep track of where and to whom downloaded copies are sold. Clearly, Amazon’s fairly remarkable actions show that certain recalls can be effected on a large scale with the distributor’s click of a single button. (Discovery requests during litigation may be used to learn how easy or difficult it would be for any defendant in a lawsuit to recall infringing materials.)

     Amazon may have unwittingly changed the framework by which recall is imposed as a remedy. It may now be an implausibility for an electronic provider to argue that imposing recall is an undue burden on an infringing party.

CONCLUSION

     With the changes in technology as evidenced by Amazon’s ability to retract infringing books from users of its Kindle readers, recall may no longer be unduly burdensome but instead a more common remedy in infringement actions.
[Are recalls possible through other devices such as the Sony Reader, Barnes & Noble’s Nook, iPod, Zune, video game consoles, and cell phones? Is anyone aware of any other recalls of copyrighted works from electronic devices?]

[1] See Gawronski v. Amazon.com, Inc., Sept. 25, 2009 Stipulation of Settlement, 09-CV-01084 (JCC) (W.D. Wash.) D.E. # 15.
[2] Brad Stone, Amazon Erases Orwell Books from Kindle, http://www.nytimes.com/2009/07/18/technology/companies/18amazon.html (July 17, 2009).
[3] Id.
[4] Id.
[5] Amazon Sued for Kindle Deletion of Orwell, http://www.cbsnews.com/stories/2009/07/31/tech/main5201198.shtml
(August 10, 2009).
[6] David Sarno, Highlights from the ‘1984’ Lawsuit Against Amazon, http://latimesblogs.latimes.com/technology
/2009/07/highlights-from-the-1984-lawsuit-against-amazon.html (August 10, 2009).
[7] Plaintiff’s complaint, page 2.
[8] See Oct. 7, 2009 Order of Dismissal, 09 CV 01984 JCC (W.D. Wash. 2009) [D.E. #16] and Sept. 25, 2009 Stipulation of Settlement [D.E. # 15].
[9] Id.
[10] In the case of e-books, some authors such as J.K. Rowling do not allow their books to be made available through electronic means. See http://www.usatoday.com/life/books/news/2005-06-14-rowling-refuses-ebooks_x.htm. Recall would be an effective remedy where e-books were not an authorized distribution method by the author and/or publisher.