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June 19, 2010

Don't Despair: Even Without a Presumption of Irreparable Harm You Are Still Likely to Win a Preliminary Injunction in Copyright Litigation after Establishing a Likelihood of Infringement

By Andrew Berger

Plaintiffs seeking a preliminary injunction in a copyright infringement case have long benefited from a presumption of irreparable harm that followed a showing of a likelihood of success on the merits. The presumption was a free pass; show success and the court assumed irreparable harm. Irreparable harm is actual and imminent injury that cannot be remedied by monetary damages if a court denies the injunction and waits until the end of trial to resolve the harm.

The Supreme Court in eBay v. Merc-Exchange threw out that presumption in patent cases. The Second Circuit in Salinger v. Colting recently held that eBay also ends that presumption in copyright and trademark cases.

As a result you will need to show irreparable harm to be entitled to a preliminary injunction. But it is unlikely the new standard will make much practical difference in most cases. Salinger was careful "not to say that most copyright plaintiffs who have shown a likelihood of success on the merits would not be irreparable harmed absent preliminary injunctive relief (emphasis added).

Nevertheless, because of Salinger we may all need a quick refresher course in demonstrating irreparable harm. Here are a few suggestions.

Loss of Market Share

You may want to focus first on loss of market share, which has traditionally been viewed as irreparable. That is because, as Salinger noted, citing to an earlier 2d Circuit opinion in Omega Importing v. Petri-Kine "'to prove the loss of sales due to infringement is ... notoriously difficult.'" The viral nature of unauthorized digital distribution on the Internet increases the loss of market share. Each user is capable of making a perfect copy of an infringing file, thereby exponentially multiplying the number of unauthorized copies available for distribution.

Market Confusion

Market confusion caused by illegal copying also produces irreparable harm. The confusion, as Clonus Assocs. v. Dreamworks pointed out, results in damage to the copyright holder in "incalculable and incurable ways." For instance, the defendant's illegal copy may be so poor in quality that prospective purchasers will turn to other competitors rather than buy from either the plaintiff or the defendant. Or that illegal copy may be so good and priced so low that consumers would have no reason to continue to buy the plaintiff's work.

Loss of Monopoly Control

You might also focus on the loss of control over one's copyrights caused by infringement. A copyright is a grant of a limited monopoly which gives the holder the right to control the use of its work. Without a preliminary injunction the copyright holder loses the power to control the exploitation of its property giving the wrongdoer what is in effect a compulsory license to profit from its infringement until the case is over. Courts find that loss of control results in incalculable damage.

Loss of Incentive to Create

Loss of incentive to create may also win you an injunction. As Salinger noted, copyright provides "individuals a financial incentive to contribute to the store of knowledge." Infringement damages the incentive. In Warner Bros. v. RDR Books, J.K. Rowling, the author of the Harry Potter series, convinced the court, based solely on her self-serving testimony, that the continued sale of the defendant's unauthorized companion guide to that series would "destroy" Rowling's incentive to write her own companion guide. That loss of will to create, which may be difficult to rebut on cross-examination, coupled with the loss of sales resulted from the presence of the infringing guide, were enough to establish irreparable harm even in the absence of the presumption.

Continuing Threat of Further Infringement

Finally, if a defendant's past history of infringement is likely to continue absent a preliminary injunction, irreparable harm will also be present. As Powell v. Walt Disney indicates, a repeat infringer's convenient plea that it will infringe no more may not be enough to avoid an injunction.

The More Things Change ...

In sum, has Salinger "changed the contours of copyright litigation" as two noted and respected commentators have stated in an article published in a NY Law Journal article on May 21, 2010. Only slightly. Plaintiffs will have to pay more attention to proof of irreparable harm. But because that harm is usually clear in infringement cases, I suggest that courts will continue with the same frequency to issue preliminary injunctions in most copyright infringement cases.

Andrew Berger is a copyright/trademark lawyer at Tannenbaum Helpern Syracuse & Hirschtritt LLP in New York.


June 24, 2010

EASL Lawyers in Transition (LIT) Committee is Happy to Announce the EASL LIT Job Bank

The EASL LIT Committee is happy to announce that the EASL LIT Job Bank is now live! EASL LIT's primary objective is to help new EASL lawyers handle the transition from law school to their first legal jobs. During this difficult economic climate, one of our Committee's goals was to create a Job Bank geared toward EASL LIT members. The EASL LIT Job Bank is accessible via our Linked In Group Page: NYSBA Entertainment Art and Sports Law, Lawyers in Transition Committee. Our Group Page is open only to EASL members. To gain access, go to www.linkedin.com, search for our Group Page, and request an invitation to join. Upon confirming your membership in EASL, you will be granted access to our Group Page.

We ask that EASL members help make our Job Bank grow. If you would like to create a job post, or if you learn of any opportunities, please forward the posting to EASL LIT Co-Chair, Saryn Leibowitz: sleibowitz@fkks.com. We appreciate everyone's support in helping our Job Bank be a success!

June 28, 2010

YouTube Wins Landmark Copyright Case

By Barry Skidelsky, Esq.

In a 30 page decision dated June 23, 2010 (Viacom et al v. You Tube et al, CV Civ. 2013), Judge Louis Stanton of the United States District Court in the Southern District of New York granted summary judgment sought by defendant Google-owed YouTube, dismissing before trial copyright infringement claims brought by plaintiff Viacom seeking more than $1 billion in damages in connection with video clips culled from the media giant’s cable channels such as Comedy Central and MTV.

The opinion and order focused on whether the defendants were entitled to so-called “safe harbor” protections found at 17 U.S.C. § 512(c) in the Digital Millennium Copyright Act (DMCA), which 12 year-old statute provides protection against copyright infringement claims brought against various types of on-line providers who qualify.

To qualify for this protection, the DMCA in part requires that service providers designate an agent to receive statutorily defined notices of alleged copyright infringement, as well as establish and follow certain notice and take-down policies. After a lengthy review of the DMCA’s legislative history, the court found that the safe-harbor did apply here.

A key issue involved whether the defendants had either actual knowledge or a form of constructive knowledge of copyright infringing activity or material, as specified in the statute. The court interpreted this to require “... knowledge of specific and identifiable infringements of particular individual items. Mere knowledge of prevalence of such activity or material is not enough.” The court went on to find that YouTube lacked the requisite specific knowledge that would disallow the safe harbor.

Reportedly, about 24 hours of new video is uploaded by users to YouTube every minute, which the court found YouTube had no obligation to affirmatively monitor or police for possible copyright infringement. That burden more properly lies with copyright holders. The court also noted that Viacom had spent several months compiling a list of 100,000 videos that it attached to the single takedown notice it sent YouTube in February of 2007; and, that by the next business day, YouTube had removed virtually all of them.

To some, the plaintiff’s case is seen as one of sour grapes, given that Viacom tried to buy YouTube but was out-bid by Google -- which successfully purchased the enormously popular video web-site in 2006 for $1.76 billion, likely motivated in part by the DMCA’s safe harbor provisions. To others, this case is seen as a victory for creative expression and maintenance of the internet as both an outlet for expression and a participatory medium.

Barry Skidelsky co-chairs EASL’s TV & Radio Committee. A former broadcaster and musician, Barry previously served as General Counsel to an Internet Service Provider where his work in part involved the DMCA safe-harbor issues raised in this case. Now in private practice, Barry offers a broad range of legal and business services to those involved directly and indirectly with traditional and new media, telecommunications, technology and entertainment. Contact: bskidelskly@mindspring.com or 212-832-4800.

June 30, 2010

More on Viacom v. YouTube: Another View

After reading Barry Skidelsky's description of the decision in Viacom v. YouTube, a case that will certainly be brought up on appeal, I thought it appropriate to make a few observations. In my view, the court, by requiring "item specific" knowledge in all circumstances before a service provider could be disqualified for protection of the DMCA safe harbor, ignored significant aspects of the statute's language, legislative history and important policy considerations. (Full disclosure - I currently represent a client adverse to YouTube and my firm represented one of the amici who submitted a brief in support of Viacom.)

For example, the statute, in listing certain conditions which a service provider must meet to enjoy the safe harbor does state that the provider must not have "actual knowledge" of infringing material. With respect to the other conditions, however, there is no such requirement of lack of "actual knowledge." Indeed, Sec 512(c)(1)(A)(ii) - the so called "red-flag" knowledge section - explicitly provides that "in the absence of such actual knowledge" the service provider must also "not [be] aware of facts or circumstances from which infringing activity is apparent." By reading the need for item specific knowledge into the red flag exception, the court essentially eviscerated the statute's distinction between red flag constructive knowledge and the actual knowledge applicable to the earlier provision. Given the court's reading, there is essentially no instance of red flag knowledge which would not also constitute actual knowledge.

Congress's intention in adopting the DMCA was not simply to shield service providers from the threat of unpredictable litigation, but also to control piracy on the Internet and to forge cooperation between content owners and service providers in preventing widespread infringement. DMCA did not simply set up a notice-and-takedown system, and I believe Judge Stanton's ruling virtually reduces the legislation to just that.

Most importantly, the decision puts an enormous burden on content owners, especially harmful to independent or individual copyright holders, to monitor vast Internet sites which, if they simply adopt a notice-and-takedown system, may operate even if - in Judge Stanton's words - such sites "not only were generally aware of, but welcomed, copyright-infringing material being placed on their website[s]." Moreover, as a practical matter, the decision will likely discourage the use of the kind of filtering technology several service providers - including YouTube - have begun to employ to respond to the needs of copyright owners. If "actual knowledge" of specific infringing items is the only disqualifier from the safe harbor, why would any service provider go to the expense and trouble of adopting a filtering system which is designed to acquire such knowledge? This is a serious danger which hopefully will be considered by the Second Circuit.

Paul LiCalsi co-chairs EASL's Litigation Committee. He is a partner at Mitchell Silberberg & Knupp LLP

About June 2010

This page contains all entries posted to The Entertainment, Arts and Sports Law Blog in June 2010. They are listed from oldest to newest.

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