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October 2012 Archives

October 4, 2012

MTV's Latin American TM Troubles

By Gergana Miteva

Last week, one of MTV's Latin America distributors, Sam Panama Trading Co. (SPT), sued the network and its parent company Viacom in New York federal court for not registering MTV trademarks in Latin America where SPT had contracted to exploit them. Apparently, SPT was selling merchandise carrying MTV branding in Latin America, and while those trademarks are registered in the United States, they are allegedly not registered in the various countries in which SPT was operating, which prompted it to file a complaint seeking $30 million in damages.
Reportedly, SPT struck a deal with MTV Networks to distribute various clothing and luggage goods carrying MTV branding in 30 countries in Latin America and the Caribbean and only recently discovered that MTV had licensed out rights it had not registered, after getting in hot water with the local authorities. (http://www.hollywoodreporter.com/thr-esq/mtv-sued-30-million-allegedly-logo-latin-america-372929). According to the complaint, the merchandise was "seized by authorities as infringing upon the trademark, copyright and proprietary rights of third parties." This lawsuit has embarked upon the very hairy waters of international trademark protection, so hopefully it will have its day in court and the legal community will get the benefit of a federal judge entangling it.

MTV/Viacom is an unusual suspect to get into this kind of trouble over failing to secure international trademark rights. Small companies are more commonly seen finding themselves in this position because they do not have budgets to hire attorneys to do due diligence, and certainly not to hire in-house counsel. Further, there is then the cost of securing international trademark rights, which can run into the millions of dollars when adding up the filing fees for each country and local counsel for policing the marks. While the Madrid Protocol (http://www.wipo.int/madrid/en/, an international treaty allowing registration of marks in multiple countries with one filing), alleviates significantly the administrative burden of registration, the cost of the filing fees and policing are still substantial. Granting trademark rights is essentially granting a monopoly over the use of a certain name, image, and/or slogan in the marketplace of that country, so it is not surprising that nations place a high price to granting these rights, in particular to foreign companies.

Another point worth mentioning is that not registering the marks may have been a calculated risk for MTV, and the network may still pull out of this one with only a few bruises on its wallet. It is a bit hard to believe that this was merely an oversight on the part of MTV's savvy army of lawyers; it is more likely that the burden of cost and process of registering the marks outweighed the fear of getting sued. In the United States, the entity that first uses a mark in commerce obtains the rights to that mark, in most other countries, the mark belongs to the first to register it. It may well be the case that MTV's legal team did its research and determined that a brand as famous as MTV need not be registered in every country it is used, and MTV, as I am sure, does a good job excluding local entities with substantial public exposure from using it. However, most "first to use" countries tend to have a background in the British legal tradition, so there is a high likelihood that the Latin American countries, where SPT had problems, follow the "first to register" doctrine, vesting all rights to a mark in the entity which first registered it in that country, rather than the one which first used it in commerce.

Even if SPT has a chance of winning this or of getting a sweet settlement, a better route for asserting its rights might have been the preventive one - due diligence and indemnification. It is quite standard for the licensee to ensure that the intellectual property rights being assigned exist before signing a contract, especially as large as this one. In addition, every licensing agreement should obligate the licensor to warrant that it owns all the rights it is bestowing, and failing that, the indemnification clause would save the day for the licensee and MTV would have had to pick the tab contractually for SPT's legal troubles in Latin America.

October 5, 2012

Publishers And Google Reach Agreement

Press Release from the Authors Guild

Mountain View, CA and Washington, DC; October 4, 2012 - The Association of American Publishers (AAP) and Google today announced a settlement agreement that will provide access to publishers' in-copyright books and journals digitized by Google for its Google Library Project. The dismissal of the lawsuit will end seven years of litigation.

The agreement settles a copyright infringement lawsuit filed against Google on October 19, 2005 by five AAP member publishers. As the settlement is between the parties to the litigation, the court is not required to approve its terms.

The settlement acknowledges the rights and interests of copyright-holders. US publishers can choose to make available or choose to remove their books and journals digitized by Google for its Library Project. Those deciding not to remove their works will have the option to receive a digital copy for their use.

Apart from the settlement, US publishers can continue to make individual agreements with Google for use of their other digitally-scanned works.

"We are pleased that this settlement addresses the issues that led to the litigation," said Tom Allen, President and CEO, AAP. "It shows that digital services can provide innovative means to discover content while still respecting the rights of copyright-holders."

"Google is a company that puts innovation front and center with all that it does," said David Drummond, Senior Vice President, Corporate Development and Chief Legal Officer, Google. "By putting this litigation with the publishers behind us, we can stay focused on our core mission and work to increase the number of books available to educate, excite and entertain our users via Google Play."

Google Books allows users to browse up to 20% of books and then purchase digital versions through Google Play. Under the agreement, books scanned by Google in the Library Project can now be included by publishers.

Further terms of the agreement are confidential.

This settlement does not affect Google's current litigation with the Authors Guild or otherwise address the underlying questions in that suit.

The publisher plaintiffs are The McGraw-Hill Companies, Inc.; Pearson Education, Inc. and Penguin Group (USA) Inc., both part of Pearson; John Wiley & Sons, Inc.; and Simon & Schuster, Inc. part of CBS Corporation.

October 8, 2012

Weekly Issues in the News

Google Books

Google Inc. and a group of publishers have agreed to a settlement over making digital copies of books. Google and the Association of American Publishers (AAP) said on October 4th that U.S. publishers can decide whether or not they want their books made available through Google. Google Books has allowed users to browse up to 20% of books in its library and then purchase the digital version through Google Play. Google has spent years scanning over 20 million books in partnerships with major libraries around the world. The Authors Guild responded by filing suit in 2005, alleging that Google violated copyright laws. Google settled the matter in 2008, agreeing to pay $125 to each copyright owner whose copyrighted books had been scanned, and to locate and share revenue with the authors who had yet to come forward. However, the Justice Department rejected the settlement. The Authors Guild stated that in spite of the publishers' settlement, it would continue with its fight. "Google continues to profit from its use of millions of copyright-protected books without regard to authors' rights, and our class-action lawsuit on behalf of U.S. authors continues," Paul Aiken, executive director of the Authors Guild said in a statement.

http://newsandinsight.thomsonreuters.com/Legal/News/2012/10_-_October/Google_settles_with_publishers_over_digital_books/

Steel Magnolias

Victoria L. White, the executive producer of the 1989 film Steel Magnolias, filed a lawsuit on October 1st against Lifetime Entertainment, A&E Networks and Sony Pictures Television, claiming that an upcoming TV movie based on the film is being made without permission or agreement for the underlying rights. The lawsuit was filed in the Superior Court of the State of California, Los Angeles County. In the complaint, White alleges to have been "shocked and dismayed" when she learned about the Lifetime project. White co-produced the film with Ray Stark, who died in 2004. The complaint states that White acquired rights to the movie when she entered into an agreement with Rastar Productions Inc., Stark's company, in 1989. In 1991 Sony acquired Rastar Productions. According to the complaint, there was a 1992 CBS movie based on the same material, and White was credited as a co-producer. The lawsuit says that the defendants told White that her rights to a TV version were limited to the 1992 TV movie. She claims that is not the case, and that she is entitled to royalties on all future TV versions. White believes that she is entitled to producing credit on the TV movie, and compensation of $5,000 per episode plus a $10,000 bonus, and a share of net profits. White has also asked the court to stop the release of the new Lifetime movie unless she gets a screen credit for her compensation.

http://www.hollywoodreporter.com/thr-esq/lifetime-steel-magnolias-lawsuit-375548

YouTube

YouTube recently added a more comprehensive appeals process that could help uploaders confronted with unjustified take-down notices in YouTube's Content ID program. Content ID is a program used by YouTube to automate the take-down process of unlicensed content. The program has been in place for four years, and YouTube said Wednesday that it has been used by more than 3,000 content owners, who have supplied the site with more than 300,000 reference files. YouTube announced the changes on its site stating:

"Users have always had the ability to dispute Content ID claims on their videos if they believe those claims are invalid. Prior to today, if a content owner rejected that dispute, the user was left with no recourse for certain types of Content ID claims (e.g., monetize claims). Based upon feedback from our community, today we're introducing an appeals process that gives eligible users a new choice when dealing with a rejected dispute. When the user files an appeal, a content owner has two options: release the claim or file a formal DMCA notification."

Adding the DMCA could help uploaders defend their use of material when it is covered by the fair use doctrine, and could help YouTube to convince more content owners to monetize. YouTube also said that it has improved its algorithms to detect false take-down notices, which could reduce the risk of automated mass take-downs.

http://gigaom.com/video/youtube-revamps-content-id-defaults-to-dmca-in-case-of-unresolved-disputes/?goback=.gmr_105577.gde_105577_member_172112616

California's Student Athlete Bill of Rights

Athletes enrolled in California's four-year institutions or higher education will be protected by the Student-Athletes Bill of Rights, effective January 1, 2013. This is the first law of this nature in the nation. The law applies to California universities that generate more than $10 million annually in athletics-related media revenue. Under the new law, if a student suffers a season-ending injury while participating in his or her scholarship program or exhausts his or her eligibility, the school must continue to provide benefits equivalent to that student's scholarship. Schools must pay the medical premiums for program-related medical claims for lower-income students and must pay the deductible amount for program-related injuries for any athlete. If an athlete requires ongoing treatment for a sports-related injury, the school must provide at least two years of that treatment or treatment covering insurance. The law also requires universities to provide specified financial and life skills workshops, including budget recommendations and time management skills. It directs universities to use their athletic media revenues to pay for complying with the law. Schools directly affected based on current revenue are Stanford, Berkeley, UCLA, and USC. NCPA President Ramogi Huma explained: "This is a great day for college athletes. California has acted to ensure that the players generating billions of dollars for its colleges are guaranteed basic physical, academic, and financial protections. No other state in the nation guarantees its college athletes these protections, and the NCPA will work to change that."

http://www.lexology.com/library/detail.aspx?g=7fcccab1-3c19-4f79-8a88-bde27d7bb95d

Bakers

Bakers Footwear Group Inc., which operates 215 women's shoe stores in the United States, filed for bankruptcy protection on October 3rd. The company has been closing and selling stores, laying off staff and ending licensing deals. Bakers' weak sales pushed it into default on a $30 million secured credit facility it entered into with Crystal Financial LLC. Crystal agreed to lend the company $22 million to get it through its bankruptcy, according to documents filed in St. Louis's bankruptcy court. The loan requires that Bakers have a bankruptcy restructuring agreement in place by Nov. 2, or begin a process to find a buyer for the chain. Bakers has assets worth $41.9 million and debts worth $59.5 million, according to court documents.

http://newsandinsight.thomsonreuters.com/Legal/News/2012/10_-_October/Bakers_shoe_chain_files_for_bankruptcy/

Geisa Balla is an attorney practicing in New York, NY. She can be reached at geisa.balla@gmail.com.

October 12, 2012

Weekly Issues in the News

By Geisa Balla

FTC and COPPA

The operator of Artist Arena, a celebrity fan website for music stars Justin Bieber, Rihanna, Demi Lovato and Selena Gomez, has agreed to settle Federal Trade Commission (FTC) charges that it violated the Children's Online Privacy Protection Act (COPPA) by improperly collecting personal information from children under 13 without their parents' consent. The settlement will impose a $1 million civil penalty on Civil Arena, bar future violations of COPPA, and require that Artist Arena delete information collected in violation of COPPA. "Marketers need to know that even a bad case of Bieber Fever doesn't excuse their legal obligation to get parental consent before collecting personal information from children," said FTC Chairman Jon Leibowitz. "The FTC is in the process of updating the COPPA Rule to ensure that it continues to protect kids growing up in the digital age."

According to the FTC, Artist Arena operated fan websites such as www.RihannaNow.com, www.DemiLovatoFanClub.net, www.BeiberFever.com, and www.SelenaGomez.com, where children were able to register to join fan clubs, create profiles and post on members' walls. Children also provided personal information to subscribe to fan newsletters. The FTC alleged that Artist Arena falsely claimed that it would not collect children's personal information without prior parental consent and that it would not activate a child's registration without parental consent.

http://www.ftc.gov/opa/2012/10/artistarena.shtm

MGM

MGM Distribution won an appellate decision over the distribution of the film Madison. The film was shot by Bill Bindley in 1999. Its financial backers sued MGM in 2009, claiming that the studio failed to properly distribute the film. According to the lawsuit, MGM released Madison in April 2005 with the help of $6.75 million in marketing funds provided by a production company called Madison LLC. The film flopped, grossing just $500,000. MGM released it in only 15 markets and on 93 screens. The film's investors lost tens of millions of dollars and brought suit against MGM, which defended on procedural grounds, arguing that the studio did not have enough contact with Illinois to be sued there. Two years later the court ruled that it was proper to exercise jurisdiction over MGM in Illinois. MGM appealed. The appellate court overturned the trial court on September 28th, holding that MGM should not have been sued in Illinois. "We find that MGM Distribution did not in fact have sufficient minimum contacts with Illinois to support the exercise of specific personal jurisdiction in this case," and remanded it back to the trial court.

http://www.hollywoodreporter.com/thr-esq/mgm-wins-appeals-court-ruling-377720

Disney

Stan Lee Media, the company that controls the rights to several Marvel characters, including Spider Man and Iron Man, has filed suit in the U.S. District Court in Colorado against Walt Disney Co., seeking "billions of dollars of profits" over the rights to many characters. Stan Lee himself is no longer associated with the company. The company claims that Lee assigned to it his rights to the Marvel characters in 1998, but then assigned the same rights to Marvel Enterprises one month later. Disney acquired Marvel Enterprises in 2009 for $4.3 billion. "The Walt Disney Company has represented to the public that it, in fact, owns the copyright to these characters as well as hundreds of other characters created by Stan Lee," states the complaint. "Those representations made to the public by the Walt Disney Company are false." The lawsuit focuses on successful movies based on Marvel characters that Disney has released since the acquisition, such as The Avengers. Disney claims that the suit is without merit, and that "it arises out of the same core facts and legal claims that have been rejected by three federal district court judges."

http://newsandinsight.thomsonreuters.com/Legal/News/2012/10_-_October/Stan_Lee_Media_sues_Disney_for_billions_over_Marvel_rights/

Electronic Arts

U.S. District Judge Claudia Wilken ruled on October 10th that Electronic Arts (EA) can settle antitrust claims by paying $27 million and releasing exclusivity rights to league-branded football video games. In 2008, lead plaintiffs Geoffrey Pecover and Jeffrey Lawrence claimed that EA killed off competing football video games by partnering with the National Football League (NFL), the National Collegiate Athletic Association (NCAA), the Collegiate Licensing Co. (CLC) and the Arena Football League (AFL). According to the complaint, EA was free to hike up the prices of its own games and gouge customers by monopolizing the market for these games. EA denied the allegations as well as any wrongdoing, eventually filing the joint settlement on July 20, 2012. The agreement bars EA from renewing its exclusive NCAA and CLC football licenses for at least five years after they expire in 2014. EA must also refrain from obtaining exclusive rights to the AFL for five years. The settlement will not affect EA's exclusive licensing with the NFL, even though the "Madden NFL" video game was central to the original lawsuit. The $27 million settlement fund will be distributed to consumers who purchased "Madden NFL," "NCAA Football" or "American Football League" games that were published between Jan. 1, 2005, and June 21, 2012.

http://www.courthousenews.com/2012/10/10/51143.htm

Elton John

On October 10, 2012, the UK High Court held that Elton John was not defamed in The Times article about a tax avoidance scheme. On June 21st, the British newspaper carried the headline "Screen Play: how movie millions are moved offshore," and mentioned Ingenious Media top executive Patrick McKenna, who was said to be Elton John's former accountant and one of two main providers of film investment schemes in the UK. The paper also included another article that referenced John in a report about the "world of glitz and glamour that's on the Revenue's radar." John's attorneys sent a letter to the publishers, and The Times ran a correction stating that McKenna had never been John's accountant and then printed a "clarification" that Ingenious Media had not been involved in tax avoidance activities. Despite the correction, John sued, saying "the allegations are particularly damaging to the claimant's reputation in the sphere of charity fundraising." UK High Court Justice Michael Tugendhat held that the publication was not defamatory. "The conclusion I have reached is that the words complained of are not capable of bearing the meaning attributed to them by the claimant or any other defamatory meaning."

http://www.hollywoodreporter.com/thr-esq/elton-john-loses-libel-case-the-times-murdoch-377814


Geisa Balla is an attorney practicing in New York, NY. She can be reached at geisa.balla@gmail.com.

October 17, 2012

Message from the Chair

By Rosemarie Tully

I am pleased to report that two bills that EASL reviewed and helped shape were recently signed into law by the Governor. Below are brief summaries of the two pieces of legislation excerpted from my Remarks in the upcoming EASL Journal.

Arts Consignment Law

On legislative issues, EASL's voice was front and center. Under the leadership of EASL's Immediate Past Chair, Judith Prowda, EASL helped shape an amendment to the Arts and Cultural Affairs Law (NYSCAL) relative to consignments of works of art to art merchants by artists, their heirs and personal representatives (the Arts Consignment Law). The revised statutes, Articles 11 and 12 of the NYSCAL, serve to strengthen pre-existing trust property and trust fund provisions, fortifying the rights of consignors (and their heirs) which rights otherwise may have been lost. This legislation was passed, signed into law by the Governor, and will be effective as of November 7, 2012.

Talent Agency Law

EASL also reviewed and supported amendments to the General Business Law and the Arts and Cultural Affairs Law in relation to theatrical employment agencies (the Talent Agency Law Revisions). Founding Chair Marc Jacobson spearheaded EASL's working group on this issue. Among the changes, the amendments add a definition for "artist," adjust the writing requirement for agency contracts, and deal with agency fees relative to negotiation or renegotiation on original or pre-existing contracts. In sum, the revisions clarify and create consistency in the regulation of theatrical employment agencies. This legislation was passed and signed into law by the Governor on October 3, 2012.

October 19, 2012

Weekly Issues in the News

By Geisa Balla

Clint Eastwood

Earlier this week, Clint Eastwood settled his claim with Evofurniture over the use of his name to sell furniture. In April 2012, Eastwood filed the lawsuit, claiming that Evofurniture was selling ottomans and chairs as "Clint" and "Eastwood" and trading on the goodwill associated with his name and his movies. Eastwood claimed that Evofurniture was "continuing to use Mr. Eastwood's name, identity and persona for the purpose of attracting attention to the infringing products," alleged the lawsuit. Evofurniture had advertised: "When you're invited into a person's home, you get to see the good, the bad and the ugly. When visitors come to your home, the Clint 47'' Entertainment Center makes your family room alone look like you live in a perfect world of a million-dollar baby." Eastwood sought a permanent injunction against the chair that bore his famous name, plus damages for misappropriation of right of publicity. Following mediation, the parties informed the court that they had reached an agreement on a global settlement to end all claims. The settlement terms were not disclosed.

http://www.hollywoodreporter.com/thr-esq/clint-eastwood-ends-legal-war-chair-379021

The Bachelor

U.S. District Judge Aleta Trauger dismissed a civil rights lawsuit filed by two men who claimed that they were rejected for the starring role of ABC's "The Bachelor" because of their race. The lawsuit was filed by Nathaniel Claybrooks and Christopher Johnson in Nashville federal court. The plaintiffs claimed that ABC had never cast a person of color in the show's central role as a matter of policy. Claybrooks and Johnson had sued ABC, which is owned by Walt Disney Co, Warner Horizon Television Inc., which produces the show, Next Entertainment Inc., NZK Productions Inc. and executive producer Michael Fleiss in April. Judge Trauger stated that the men's goals were "laudable", but that the rights of the show's producers to control their creative content are protected by the First Amendment. Claybrooks and Johnson "seek to support social acceptance of interracial relationships, to eradicate outdated racial taboos, and to encourage television networks not to perpetuate outdated racial stereotypes," Trauger wrote. "Nevertheless, the First Amendment prevents the plaintiffs from effectuating these goals by forcing the defendants to employ race-neutral criteria in their casting decisions in order to 'showcase' a more progressive message."

http://newsandinsight.thomsonreuters.com/Legal/News/2012/10_-_October/Lawsuit_accusing_ABC_of_racial_bias_in__The_Bachelor__dismissed/

Madonna and Marlon Brando

CMG Worldwide Inc. (CMG) has filed a breach of contract lawsuit against Marlon Brando's estate, claiming that the estate is reneging on a deal allowing the use of Brando's name and likeness during Madonna's 2012 World Tour. The complaint alleges that after CMG entered into a valid contract with Brando's estate, the estate backed out and demanded more money for the use of Brando's name, likeness and image. Under the initial agreement, Madonna would be able to use Brando's name, likeness and image for $5,000. According to CMG, the deal with Brando was exactly the same as those deals reached with the other deceased stars and the agreement itself included a "most favored nations" clause that ensures that each star receives equal financial treatment. After an oral acceptance of the deal, followed by acceptance via electronic message, Brando's estate reportedly upped its fee a week later -- to $20,000. CMG is seeking the declaration of a valid and enforceable contract between the parties, and demanding that Brando's estate be enjoined from bringing suit against CMG under the agreement.

http://www.medialawbytesandpieces.com/2012/10/11/the-material-girl-may-have-to-pay-up-for-use-of-brandos-name-and-likeness/

Go the Distance Baseball LLC

Go the Distance Baseball LLC (Got the Distance) filed a lawsuit against the Residential & Agricultural Advisory Committee in Iowa on October 12, 2012 over the construction of an "All-Star Ballpark Heaven." Go the Distance, a development company run by Denise and Mike Stillman, is involved in a $38 million project to turn a 193-acre farm in Dyersville, Iowa into a destination spot for youth baseball and softball athletes. The development would be constructed on the same site used in the 1989 film "Field of Dreams". However, the residents of Dyersville objected to the development plan. Citizens distributed a "Save our Town" letter in June, warning of hotel and parking issues, as well as food threats as a result of the development. The Residential & Agricultural Advisory Committee initiated legal action to have the city's rezoning decision reconsidered. That attempt was denied. An appeal would derail the Stillmans' hope to close on the deal by the end of the year, and thus they filed their own lawsuit to push the project forward. The lawsuit brings claims of tortious interference and defamation. The "Save our Town" letter has become an exhibit in support of the allegation that the Advisory Committee is attempting to interfere with the plans. The Stillmans accuse the local residents of lying to their neighbors about the development and libeling them with defamatory statements.

http://www.hollywoodreporter.com/thr-esq/real-life-field-dreams-plan-379343


Warner Brothers

On October 17, 2012, the U.S. District Court for the Central District of California granted Warner Brothers' motion for summary judgment on in its Superman copyright claim. The issue was whether a 1992 agreement with Jean Peavy, the sister of Superman's co-creator Joe Shuster, precludes the Shuster estate's attempt to terminate a copyright grant. The judge ruled "that the 1992 Agreement, which represented the Shuster heirs' opportunity to renegotiate the prior grants of Joe Shuster's copyrights, superseded and replaced all prior grants of the Superman copyrights. The 1992 Agreement thus represents the parties' operative agreement and, as a post-1978 grant, it is not subject to termination." Defendants' counsel stated: "The order for the most part is the tentative order issued over six weeks ago before oral argument. We respectfully disagree with its factual and legal conclusions, and it is surprising given that the Judge appeared to emphatically agree with our position at the summary judgment hearing."

http://www.hollywoodreporter.com/thr-esq/warner-bros-wins-big-court-379770?goback=%2Egde_105577_member_176593976

Geisa Balla is an attorney practicing in New York, NY. She can be reached at geisa.balla@gmail.com.

Jovani Fashion v. Fiesta Fashions

By Barry Werbin

The Second Circuit, in an unpublished Oct. 15th short opinion, addressed fashion design functionality and copyright in JOVANI FASHION v. FIESTA FASHIONS, No. 12-598-cv. Jovani sued Fiesta for copyright infringement of its design of a prom dress. To avoid the "utilitarian" functionality defense to copyrightability under Copyright Act Section 101's definition of a ""useful article," Jovani alleged that the dress merited copyright protection because its design constituted a combination of features "that can be identified separately from and are capable of existing independently of, the utilitarian aspects of the article," specifically, "the arrangement of decorative sequins and crystals on the dress bodice; horizontal satin ruching at the dress waist; and layers of tulle on the skirt." The Second Circuit's response: "We are not persuaded." Dismissal followed.

The Court held that in the context of clothing designs, "[p]hysical separability can be shown where one or more decorative elements 'can actually be removed from the original item and separately sold, without adversely impacting the article's functionality.'"....That is plainly not the case here. Jovani has not alleged, nor could it possibly allege, that the design elements for which it seeks protection could be removed from the dress in question and separately sold."

The Court also addressed "conceptual separability," where a designer exercises artistic judgment "independently of functional influences," rather than as "a merger of aesthetic and functional considerations." In this case, the Court found that the artistic judgment exercised with respect to the alleged design elements "does not invoke in the viewer a concept other than that of clothing... these design elements are used precisely to enhance the functionality of the dress as clothing for a special occasion. In short, here the aesthetic merged with the functional to cover the body in a particularly attractive way for that special occasion." The Court's discussion also addressed the seminal Barry Kieselstein-Cord case (Kieselstein-Cord v. Accessories by Pearl, Inc., 632 F.2d at 993) and Halloween costume cases (such as Chosun Int'l, Inc. v. Chrisha Creations, Ltd., 413 F.3d 324, 328 (2d Cir. 2005) and Whimsicality, Inc. v. Rubie's Costume Co., 891 F.2d at 455).


October 22, 2012

Symposium And Call For Papers

The Rutgers Conflict Resolution Law Journal is hosting a symposium on April 4th, 2013 at 4:00 PM to be held at the Rutgers School of Law - Newark. The theme will be alternative dispute resolution in the field of sports
law. We invite submissions of papers on a sports law topics with a conflict resolution nexus for potential publication in our Spring issue.

1-2 manuscripts will be accepted for publication. Topics of special interest include, but are not limited to, sports negotiations and contracts. Selected authors will also be invited to speak at our symposium.

Submissions should be between 15-25 pages and submitted electronically by 12/25/2012 to the following address: rcrlj@pegasus.rutgers.edu.

HathiTrust

By Barry Werbin

On the heels of Google's settlement of long-running claims by the Association of American Publishers concerning the Google Library Project, on Oct. 10th, Judge Harold Baer (SDNY) granted a motion for summary judgment that had been filed by defendants in The Authors Guild, Inc. et al v. Hathitrust et al. HathiTrust and other defendants had been sued by the Authors' Guild and others for copyright infringement based on the HathiTrust project's planned scanning of books owned by various universities, including the University of Michigan, University of California, University of Wisconsin, Indiana University and Cornell University, which were also named as defendants. In addition to the Author's Guild, the other plaintiffs included various individual authors and other U.S. and foreign authors' associational organizations. The National Federation of the Blind also was permitted to intervene.

In addition to the summary judgment motion concerning the substantive copyright claims and fair use defense, the court also ruled on the defendants' motion to dismiss asserting a lack of standing by the associational plaintiffs (to the extent they asserted rights of their members) and that claims concerning the Orphan Works Project (OWP) were not ripe for adjudication.

Background

The university defendants had entered into agreements to allow Google to create digital copies of works in the universities' libraries, in exchange for which Google would provide digital copies to the universities (referred to as the Mass Digitization Project or MDP). According to the complaint, this digital repository at the time of filing the action held some 10 million digital volumes, of which approximately 73% were protected by copyright. Once digitized, Google also makes "snippets" of the books available for viewing online, and the universities also "contribute" their digital copies to the HathiTrust Digital Library (HDL), a partnership of the participating universities.

In addition, as described in the court's opinion, for works by known authors, such digitized works within the HDL are used in three ways: (1) full-text searches; (2) preservation; and (3) access for people with certified print disabilities, such as the blind. For works that are not in the public domain or for which the copyright owner has not authorized use, "the full-text search indicates only the page numbers on which a particular term is found and the number of times the term appears on each page."

The universities (except for Indiana) also had agreed to participate in the OWP, an initiative to "identify and make available to University students, faculty and library patrons full copies of so-called 'orphan works'--works that are protected by copyright but whose rights holders theoretically cannot be located..." If initial attempts to contact a copyright owner/author or an orphan work failed, the HathiTrust would then list bibliographical information for such works on an Orphan Candidates webpage for 90 days, after which the works, if not claimed, would be fully viewable to students, professors and other authorized users at participating universities. After the filing of the original complaint, however, the University of Michigan announced that it would temporarily suspend the program because the OWP procedures had allowed many works to be included on the Orphan Works Lists in error. On a side issue, because the OWP was being challenged based on what it would in the future create, Judge Baer held that such claims were not ripe for adjudication.

Standing

The defendants challenged both associational (constitutional) standing and statutory standing under the Copyright Act. The court found that the three-part test for associational standing established in Washington State Apple Advertising Commission v. Hunt, 432 U.S. 333, 343 (1977) were satisfied because individual members of the Authors Guild would otherwise have standing to sue, the interests involved were germane to the Authors Guild's purposes, and participation of the Authors Guild's individual members was not necessary, in accordance with the recent ruling in Author's Guild v. Google, Inc., 2012 WL 1951790, at *6 (S.D.N.Y. May 31, 2012) [currently on appeal].

With respect to statutory standing under the Copyright Act, however, Judge Baer held that the U.S. domestic associational plaintiffs, including the Authors Guild, lacked such standing because the Copyright Act's standing clause, 17 U.S.C. 501(b), expressly limits who may enforce copyright claims to "the legal or beneficial owner of an exclusive right under a copyright...." Looking for guidance outside the Second Circuit, Judge Baer concluded that statutory standing for U.S. associations is not permitted under the Copyright Act.

With respect to foreign associational plaintiffs, the court also had to assess the issue under the "national treatment" provisions of the Berne Convention and Universal Copyright Convention. Citing the Second Circuit's decision in Itar-Tass Russian News Agency v. Russian Kurier, Inc., 153 F.3d 82, 89 (2d Cir. 1998), which permitted a Russian reporters' organization to bring copyright claims in the U.S. where Russian law authorized the creation of such organizations "for the collective administration of the economic rights of authors," Judge Baer concluded that "whether a foreign association has satisfied the statutory standing requirements necessary to assert a claim is determined by foreign law." While four of the foreign associational plaintiffs asserted they had similar authority under their national laws, Judge Baer held that because the defendants "do not challenge the actual foreign law basis for the assertion of statutory standing by these three associations," he would not raise any objection to such standing.

Fair Use

Similar to the pending Authors Guild v. Google case now on appeal to the Second Circuit, the key issue was whether the book scanning and digitization project was subject to a fair use defense, which Judge Baer found was applicable after assessing each of the statutory fair use factors under 17 USC ยง 107, and also assessing the limited library exception in Section 108 of the Copyright Act (which allows libraries to make a limited number of copies of certain works for specified purposes, but without affecting any separate fair use right under Section 107). Judge Bear initially rejected the defendants' argument that Section 108 limited any fair use defense.

With respect to the first fair use factor, the "purpose and character of the use," the court found that the intended purpose here -- "scholarship and research" --met this first prong. In addition, Judge Baer held that the use of the works within the HDL was "transformative because the copies serve an entirely different purpose than the original works: the purpose is superior search capabilities rather than actual access to copyrighted material." Such use also was deemed "transformative" because it facilitated "access for print-disabled persons."

As for the second factor, the "nature of the copyrighted works," Judge Baer found that because the use is transformative -- "intended to facilitate key-word searches or access for print-disabled individuals" -- this second factor was not dispositive and he essentially ignored it.

The third factor, the amount of the work copied, was found not to be a bar either because making complete "[i]ntermediate" copies of entire works "may not be infringing when that copying is necessary for fair use," concluding that making entire copies were necessary in order to facilitate searches and provide access for print-disabled individuals.

As for the final factor, the effect on the market for the copyrighted works, drawing on the "Betamax" case, Judge Baer held that where a challenged use is non-commercial, "the plaintiff must show 'by a preponderance of the evidence that some meaningful likelihood of future harm exists,'" under Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 455 n.40 (1984). He concluded that the plaintiffs failed this test as well, based on the alleged facts. Even if the defendants had purchased additional copies of the books, "purchase of an additional copy would not have allowed either full-text searches or access for the print-disabled individuals, two transformative uses that are central to the MDP." Finally, he found that defense arguments concerning potential loss of existing and potential licensing opportunities was "conjecture" and hypothetical, making the interesting comment that "[a] copyright holder cannot preempt a transformative market."

One significant take-away from the decision, which will be appealed, is the overriding impact of a "transformative use" finding under the first statutory factor, and how it carried the day in the court's assessment of the other three factors in the case. Despite "transformative use" being a judicially created doctrine not found expressly in Section 107, we have seen this trend evolve in this direction in recent years across federal jurisdictions. Regardless of how the Second Circuit ultimately will assess "transformative" use and the fair use factors in this case, and perhaps the pending Authors Guild v. Google case if it ever gets to that substantive stage, will be one of the seminal copyright rulings of the modern era.

About October 2012

This page contains all entries posted to The Entertainment, Arts and Sports Law Blog in October 2012. They are listed from oldest to newest.

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