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April 7, 2012

Poindexter v. EMI

By Barry Werbin

This quietly noteworthy music copyright infringement decision was issued March 27th by Judge Swain (SDNY), and reminded me of the 6th Circuit's 2005 decision in Bridgeport Music Inc. v. Dimension Films (410 F.3d 792 (6th Cir. 2005)), where that Circuit, in a case of first impression, held there was no "de minimus" copying defense as a matter of law in music sampling infringement cases (Bridgeport addressed a two-second sample of a rap song used in a film). Now, in Poindexter, a case that primarily addresses lack of standing and scope of work for hire/assignment agreements, Judge Swain also held that the subject sample consisting of a single "F-sharp" note played on a piano for less than two seconds was de minimus and not subject to copyright protection because a single note is not copyrightable, citing Swirsky v. Carey (376 F.3d 841 (9th Cir. 2004)).

The decision can be accessed here: http://docs.justia.com/cases/federal/district-courts/new-york/nysdce/1:2011cv00559/374395/40/.



September 21, 2012

Kernel Records Oy v. Timothy Z. Mosley p/k/a Timbaland, et al.

By Barry Werbin

A very interesting and detailed case addressing what constitutes a published "US work" in the context of global online publishing and distribution, is Kernel Records Oy v. Timothy Z. Mosley p/k/a Timbaland, et al. (11th Cir. Sept. 14, 2012). The plaintiff, a Finnish record company, had purchased rights to a musical computer arrangement called Acidjazzed Evening, which was first published by the original author allegedly in Australia in August 2002 as a "disk magazine" called Vandalism News, and later by a Swedish website, which had uploaded it. The defendants (including UMG, EMI and other music publishers) created, distributed and marketed an allegedly infringing (sampled) song called Do It. Kernel failed to apply for U.S. copyright registration, but alleged that because the work was first published outside the U.S., no U.S. registration was required as a prerequisite to sue. Mosley argued, however, that by making Acidjazzed Evening available for download from an "Internet site," the work was simultaneously "published" in every country of the world having Internet service and, thus, the work was subject to the U.S. registration requirement. The Florida District Court agreed and dismissed the case on a summary judgment motion based on its view that the Copyright Act dictates that a work simultaneously published in every country of the world should be treated as a "United States work" under Section 411 of the Act, and therefore is subject to the Copyright Act's registration requirement.

The 11th Circuit affirmed on alternative grounds under Section 411 of the Act but rejected the District Court's analysis and basis for the summary judgment grant, stating: "The district court...confounded 'the Internet' and 'online' with 'World Wide Web' and 'website.' Because of the strict temporal and geographic requirements contained in the statutory definition of 'United States work,' conflating these terms had a profound impact on the district court's evidentiary analysis. By confounding 'Internet' with 'website,' the district court erroneously assumed that all 'Internet publication' must occur on the 'World Wide Web' or a 'website.' The district court then erroneously assumed all 'Internet publication' results in simultaneous, worldwide distribution. [A] proper separation of the terms yields a very different analysis." The Court ultimately held that Mosley failed to meet his factual burden in establishing the exact nature of the online posting of the song and its intended scope of distribution to support summary judgment in defendants' favor. The Court noted that "proof of distribution or an offer to distribute, alone, is insufficient to prove publication. Central to the determination of publication is the method, extent, and purpose of distribution" and in the context of whether a work was first published abroad, also relevant is the "timing and geographic extent of the first publication."

However the Court ruled alternately that, based on discovery in the case, summary judgment was still warranted because "[t]he record reveals a lack of sufficiently probative evidence to determine that Acidjazzed Evening is a foreign work" because there was no evidence that the Australian "disk magazine" site was ever made "publicly accessible." The Court concluded that there was only "simple speculation that Acidjazzed Evening "was published on the Internet [in Vandalism News] in August 2002. A reasonable fact-finder could not find that a simultaneous, worldwide publication occurred in August 2002. Because the record lacks sufficiently probative evidence of simultaneous worldwide publication, we need not determine what effect simultaneous worldwide publication would have under 17 U.S.C. §101's definition of a United States work." As Kernel Records bore the burden of proving compliance with statutory formalities, the Circuit affirmed summary judgment on this alternative ground.

Therefore the core issue remains of what constitutes a "U.S. work" for first publication purposes in the context of online/Web/Internet uploading first done outside the U.S.

October 19, 2012

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

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 § 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.

February 13, 2013

Morris v. Young

By Barry Werbin

Another new interesting artwork photography/art fair use - "transformative use" - decision was issued 1/28/2013 by the C.D. California (Morris v. Young (CD Cal. 2013)), mirroring the same issues as in Cariou v. Prince, 784 F. Supp. 2d 337, 349 (S.D.N.Y. 2011) [on appeal]. In this case, the defendant, Young, was an artist who created a series of works based on photographic images of the punk band the Sex Pistols that he found on the Internet, which Young believed were in the public domain because they bore no copyright notice. The photos had been taken by the plaintiff photographer Morris, who had published two books on the Sex Pistols originally in the UK. The books contained original photographs of the Sex Pistols on tour, taken by Morris, including the photograph in issue (Subject Photograph), which depicts Sid Vicious and Johnny Rotten performing on stage.

Young took that photo and created three different "artistic" variations of it. One was called "Sex Pistols in Red" and depicts the Subject Photograph, "cropped slightly to more closely frame the subjects and tinted in a deep red color." The second one was called "Sex Pistols" and "depicts the Subject Photograph, printed using black enamel on an acrylic background." Young "altered the colors and shades, deepened the contrast between the black and white portions of the image, and added 'grittiness' to the image by printing it in black enamel on an acrylic background." A third a piece called "White Riot + Sex Pistols," depicts two images of the Subject Photograph side-by-side, "with a Union Pacific logo and the words "White Riot" and red stars graffitied atop the images."

On a motion for summary judgment by plaintiff Morris, the court held that Young's fair use defense failed as to the first two of the three images identified as "Sex Pistols" and "Sex Pistols in Red" because they were "not transformative works", and Young failed to carry his burden on the four traditional fair use factors. In particular, the court cited favorably to Bill Graham Archives v. Dorling Kindersley Ltd., 448 F.3d 605, 609 (2d Cir. 2006) and Cariou v. Prince. The court found that the "works were [not] created for any reason other than to emphasize the characteristics with which the band was already associated" and such use of the Subject Photograph was "not transformative because it lacks any significant expression, meaning, or message that is unique vis à vis the works' original purpose."

However, with respect to the third work, "White Riot + Sex Pistols," the court denied summary judgment finding the image "bears certain aesthetic characteristics that raise the question of transformation, and, by extension, fair use." [Here we have a court, in my view, using the judicially created concept of "transformation" as a test seemingly apart from "fair use" itself.] "[U]nlike the other two Accused Works, 'White Riot + Sex Pistols' incorporates images beyond the band itself and arranges them such that the composition may convey a new message, meaning, or purpose beyond that of the Subject Photograph." Citing the Supreme Court's decision in Campbell v. Acuff-Rose Music Inc., 510 U.S. 569 (1994), the court held there were issues of fact "as to whether the work does more than 'merely supersede[] the objects of the original creation,' and therefore a trier of fact may reasonably deem it transformative. Campbell, 510 U.S. at 579. The transformative character of a work bears upon the weight and meaning of the other fair use factors."

February 15, 2013

The Batmobile Is A Protectable "Character"

By Barry Werbin

A very interesting decision from January 26th out of the C.D. Cal., ruling on cross summary judgment motions, finds in favor of DC Comics (Warner) that the iconic Batmobile® is akin to a "character" protectable by copyright as opposed to an unprotected functional automobile.

The defendant, Gotham Garage, is a manufacturer of television and movie replica vehicles. Gotham and its co-defendant individual owner lost their "useful article" defense. A copy of the lengthy decision is available at http://www.hollywoodreporter.com/sites/default/files/custom/Documents/ESQ/batmobile.pdf.

As the court holds:

"The Batmobile is a character and exists in both two- and three-dimensional forms. Its existence in three-dimensional form is the consequence of the Batmobile's portrayal in the 1989 live-motion film and 1966 television series. [...] Defendant did not copy the design of a mere car; he copied the Batmobile character. The fact that the unauthorized Batmobile replicas that Defendant manufactured -- which are derivative works -- may be 'useful articles' is irrelevant. A derivative work can still infringe the underlying copyrighted work even if the derivative work is not independently entitled to copyright protection."

-- and --

"The Batmobile, and the so-called functional elements associated with it, is not a useful object in the real world, and incorporates fantasy elements that do not appear on real-world vehicles. The 'functional elements' - e.g., the fictional torpedo launchers, the Bat-scope, and anti-fire systems - are only 'functional' to the extent that they helped Batman fight crime in the fictional Batman television series and movies. Thus, the Batmobile's usefulness is a construct."

The decision also sets forth a detailed history of copyright protection for fictional characters in the Ninth Circuit. The first part of the decision addresses trademark infringement and unfair competition claims, also ruling in favor of DC Comics on both counts.

February 21, 2013

Ashby Donald and others v. France

By Barry Werbin

A fascinating and unusual decision of first impression (published only in French) from the European Court of Human Rights (ECHR) involves the rights of photographers to use photographs taken at French fashion shows. Under French law, the fashion houses own the copyrights to any photos taken at a show. In the case, Ashby Donald and others v. France [ECtHR (5th section), 10 January 2013], the Court clarified for the first time that a copyright infringement conviction based on illegally reproducing or publicly communicating copyright protected material can be deemed an interference with the rights of freedom of expression and information under Article 10 of the European Convention.

The petitioners were three fashion photographers (one being an American), two of whom republished on their own fashion website for their own purposes photos taken by one of the other plaintiffs at fashion shows without permission of the fashion houses. They were ordered by a Paris court to pay fines and damages to a clothing designer and five fashion houses, totaling €255,000. After losing an appeal to the French Supreme Court, the photographers appealed to the ECHR.

Article 10 provides for an EU right to freedom of expression, that "may be subject to such formalities, conditions, restrictions or penalties as are prescribed by law and are necessary in a democratic society..." en.wikipedia.org/wiki/Article_10_of_the_European_Convention_on_Human_Rights. French copyright law has an exception "allowing the reproduction, representation or public communication of works exclusively for news reporting and information purposes." echrblog.blogspot.com/2013/01/copyright-vs-freedom-of-expression.html.

The ECHR found for the first time that national copyright laws may have to yield in proper circumstances to this EU law of freedom of expression (similar to the First Amendment in the context of a fair use debate), but noting that "[t]he Court hereby confirms its approach that while freedom of expression is subject to exceptions, these exceptions must be construed strictly, and the need for any restrictions must be established convincingly." Id.

However, based on the facts of this case, the ECHR held there was no violation of Article 10 because the use of the photos was "not related to an issue of general interest for society and concerned rather a kind of 'commercial speech.'" Id. It also emphasized that national laws are entitled to wide deference. In addition, the ECHR found the fines and substantial damages award not to be disproportionate to the legitimate goals of the French copyright law, noting that the petitioners presented no evidence that the monetary awards had "financially strangled" them. Id.

So we are not alone in the U.S. in struggling with finding the right balance between copyright protection and freedom of expression in a modern Internet age.

If you read French, you may access the opinion at: hudoc.echr.coe.int/sites/eng/pages/search.aspx?i=001-115845

An excellent blog by a German professor that interprets and translates parts of the opinion is available at: echrblog.blogspot.com/2013/01/copyright-vs-freedom-of-expression.html. Of interest is the professor's note that "the Court's judgment is a clear illustration of the difference between, on the one hand, expression and content contributing to an issue of public debate or a debate of general interest for society, and on the other hand, 'commercial speech'. Speech, messages, pictures and content which are merely money driven do not enjoy the added value of the protection guaranteed by Article 10 of the Convention."

March 12, 2013

SOFA Entertainment, Inc. v. Dodger Productions, Inc.

By Barry Werbin

The Ninth Circuit issued a March 11, 2013 decision in SOFA Entertainment, Inc. v. Dodger Productions, Inc. The Court affirmed the district court's grant of summary judgment and attorneys' fees in a copyright infringement suit regarding use in Jersey Boys of a seven-second clip of Ed Sullivan's introduction of the Four Seasons on "The Ed Sullivan Show".

Per the Court staff's case summary: "[T]he panel held that the defendants were entitled to prevail on their fair use defense as a matter of law. The defendants used the clip in Jersey Boys, their musical about the Four Seasons, to mark a historical point in the band's career. The panel held that this was a fair use because by using the clip for its historical significance, the defendants had imbued it with new meaning and had done so without usurping whatever demand there was for the original clip."

To the chagrin perhaps of the "transformative use" study group, the substantive part of the decision on the Section 107 fair use factors begins: "The central inquiry under the first factor is whether the new work is 'transformative.' Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 579 1994). Transformative works 'add[] something new' to an existing work, endowing the first with 'new expression, meaning, or message,' rather than merely supersed[ing] the objects of the original creation.' Id. By using [the clip] as a biographical anchor, Dodger put the clip to its own transformative ends...."

The Court also "doubted" whether the clip even qualified for copyright protection.

The discussion on awarding attorneys' fees to the defendant also bears note. Citing the prior case of Elvis Presley Enters., Inc. v. Passport Video, 349 F.3d 622, 629 (9th Cir. 2003), also involving use of a clip, the court harshly stated that SOFA should have received an "education" and "should have known from the outset that its chances of success in this case were slim to none." The Court also agreed with the district court's assessment that suits of this type have a "chilling effect on creativity insofar as they discourage the fair use of existing works in the creation of new ones."

To read the decision, click here: SOFA.pdf

March 20, 2013

UMG Recordings, Inc v. Veoh Networks, Inc. et al

By Barry Werbin

On March 14, the 9th Circuit came down with a lengthy superseding opinion in UMG Recordings, Inc v. Veoh Networks, Inc. et al [prior withdrawn opinion is at 667 F.3d 1022 (9th Cir. 2011)], holding that Veoh, the video sharing site and service, is entitled to a defense under the DMCA's "safe harbor" in 17 U.S.C. § 512(c), which limits a service provider's 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."

In affirming a Cal. District Court's grant of summary judgment in favor of Veoh, the Court agreed with the Second Circuit's opinion in Viacom Int'l v. YouTube, Inc., 676 F.3d 19, 31 (2d Cir. 2012), in rejecting UMG's arguments that that the DMCA safe harbor did not apply because: "(1) the alleged infringing activities did not fall within the plain meaning of 'infringement of copyright by reason of the storage [of material]at the direction of a user;' (2) genuine issues of fact remained about whether Veoh had actual knowledge of infringement, or was 'aware of facts or circumstances from which infringing activity [wa]s apparent;' and(3) Veoh 'receive[d] a financial benefit directly attributable to . . . infringing activity' that it had the right and ability to control." [from Court's Summary]

In particular, the court rejected UMG's arguments that Section 512(c) of the DMCA only applied to web hosting services as opposed to a much broader class of "service providers," such as Veoh, and that the statute limited the safe harbor only to "storage" but not "facilitation of access." As the Court stated: "To carry out their function of making websites available to Internet users, web hosting services thus routinely copy content and transmit it to Internet users....We cannot see how these access-facilitating processes are meaningfully distinguishable from Veoh's for § 512(c)(1)purposes." (at p. 25)

With respect to "actual knowledge" and "red flag" awareness, the Court held that the district court was correct in finding that UMG "failed to rebut Veoh's showing 'that when it did acquire knowledge of allegedly infringing material - whether from DMCA notices, informal notices, or other means - it expeditiously removed such material.'" (at p. 28) "We therefore hold that merely hosting a category of copyrightable content, such as music videos, with the general knowledge that one's services could be used to share infringing material, is insufficient to meet the actual knowledge requirement under §512(c)(1)(A)(i)." (at p. 33)

With respect to "red flag" knowledge --whether a provider is "aware of facts or circumstances from which infringing activity is apparent" -- the Court held that "Veoh's general knowledge that it hosted copyrightable material and that its services could be used for infringement is insufficient to constitute a red flag." (at p. 34) Consistent with the Second Circuit's opinion in Viacom v. YouTube, the Court observed that while a service provider can't "bury its head in the sand to avoid obtaining such specific knowledge," after "viewing the evidence in the light most favorable to UMG as we must here, however, we agree with the district court there is no evidence that Veoh acted in such a manner. Rather, the evidence demonstrates that Veoh promptly removed infringing material when it became aware of specific instances of infringement. Although the parties agree, in retrospect, that at times there was infringing material available on Veoh's services, the DMCA recognizes that service providers who do not locate and remove infringing materials they do not specifically know of should not suffer the loss of safe harbor protection." (at p. 34)

The Court also affirmed the District Court's finding that "Veoh did not have the necessary right and ability to control infringing activity and thus remained eligible for safe harbor protection." (at p. 40) In part, the Court rejected UMG's view that "control" under Section 512(c) should be equated with common law vicarious liability (which was applied in Napster), an interpretation also rejected by the Second Circuit in Viacom. The Ninth Circuit held:

"We agree with the Second Circuit and hold that, in order to have the 'right and ability to control,' the service provider must 'exert[] substantial influence on the activities of users." Id. 'Substantial influence' may include, as the Second Circuit suggested, high levels of control over activities of users... Or it may include purposeful conduct, as in Grokster. In this case, Veoh's interactions with and conduct toward its users did not rise to such a level."

There's a lot more discussion and interesting reading about additional facts relating to "knowledge," such as emails sent to Michael Eisner, one of Veoh's investors, by Disney's CEO citing specific infringing content. But the Court viewed this as a "deficient" DMCA notice coming from a copyright owner, and that the cited content was thereafter promptly removed anyway.

A copy of the decision is available at: umg_veoh_Decision.pdf

March 23, 2013

Penguin v. American Buddha

By Barry Werbin

Attached is a "post-script" opinion of the SDNY, dismissing Penguin's long-standing suit vs. American Buddha based on lack of personal jurisdiction, following the Second Circuit's remand after the New York Court of Appeals, on a certified question, ruled in 2011 that the "situs" of a copyright injury for purposes of New York's long arm statute was where the copyright owner was located, not where the infringing activity took place. The defendant is an Oregon non-profit corporation that operates in Arizona. Its website had hosted unauthorized copies of the plaintiff's copyrighted books as an online library, which was not primarily involved in sales of the works.

The court now finds there is no jurisdiction under CPLR 302(a)(3)(ii) because the evidence showed that the defendant's revenues from the infringing activity amounted to only about $2,000, and this was not sufficient to be deemed revenues derived from "substantial" interstate commerce.

For litigators, the case has interesting language on modern Internet-based jurisdiction.

Here is the decision: Order3-7-13-PenguinvAmericanBuddha.pdf

April 1, 2013

WNET v. Aereo

By Barry Werbin

The Second Circuit's decision in WNET v. Aereo, affirming the denial of a PI, found that the District Court "correctly concluded that Aereo's system is not materially distinguishable from the system upheld in Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008)." Judge Chin dissented.

The Court focused on whether Aereo's service infringes the plaintiffs' public performance right under the Copyright Act. The plaintiffs argued that the "Aereo's transmissions of broadcast television programs while the programs are airing on broadcast television fall within the plain language of the Transmit Clause and are analogous to the retransmissions of network programming made by cable systems, which the drafters of the 1976 Copyright Act viewed as public performances."

Looking at its Cablevision decision and a reading of the Transmit Clause, the Court noted that "the Cablevision court concluded that Cablevision's transmission of a recorded program to an individual subscriber was not a public performance....Each transmission of a program could be received by only one Cablevision customer, namely the customer who requested that the copy be created. No other Cablevision customer could receive a transmission generated from that particular copy."

The Court found that the two key features of the Cablevision system are also present in the Aereo system: (1) the creation of "unique copies of every program a Cablevision customer wished to record," and (2) the "transmission of the recorded program to a particular customer was generated from that unique copy; no other customer could view a transmission created by that copy." As described by the Court, in Aereo's system: "when a ... customer elects to watch or record a program using either the "Watch" or "Record" features, Aereo's system creates a unique copy of that program on a portion of a hard drive assigned only to that Aereo user. And when an Aereo user chooses to watch the recorded program, whether (nearly) live or days after the program has aired, the transmission sent by Aereo and received by that user is generated from that unique copy. No other Aereo user can ever receive a transmission from that copy. Thus, just as in Cablevision, the potential audience of each Aereo transmission is the single user who requested that a program be recorded."

The plaintiffs' argument that Cablevision had a license as opposed to Aereo was rejected, because the Court found there was no public performance and, therefore, no license was needed. The Court also rejected plaintiffs' argument that discrete transmissions should be aggregated to determine whether they are "public performances," noting that this interpretation of the Transmit Clause had been rejected by Cablevision. The Court emphasized that the interpretation adopted by Cablevision "focuses on the potential audience of the performance or work being transmitted, not the potential audience of the particular transmission."

The Court also rejected the plaintiffs' argument that the two cases also should be distinguished because "Cablevision was decided based on an analogy to a typical VCR, with the RS-DVR simply an upstream version, but Aereo's system is more analogous to a cable television provider." The Court explained that its interpretation of the public performance right in Cablevision was not "influenced by any analogy to the stand-alone VCR."

Further, the Court rejected the plaintiffs' analogy of the Aereo system to Internet streaming as a public performance. The Court found that an Aereo' user's "volitional control over how the copy is played makes Aereo's copies unlike the temporary buffer copies generated incident to internet streaming."

The Court found nothing wrong with Aereo designing its system to avoid copyright liability. In this respect, the Court further analogized Aereo to "many cloud computing services, such as internet music lockers..." Despite the plaintiffs' concern, shared by Judge Chin, that complex technological workarounds should not excuse functionality that would otherwise constitute a public performance, the Court observed: "Perhaps the application of the Transmit Clause should focus less on the technical details of a particular system and more on its functionality, but this Court's decisions in Cablevision and NFL, 211 F.3d 10, held that technical architecture matters." In interpreting the public performance provisions of the Copyright Act, the Court noted that "[i]n the technological environment of 1976, distinguishing between public and private transmissions was simpler than today" and new devices such as RS-DVRs and Slingboxes complicate the analysis. Nevertheless, while "Aereo's service may resemble a cable system, it also generates transmissions that closely resemble the private transmissions from these devices."

Lastly, the Court made the interesting observation that "[o]ne panel of this Court...'cannot overrule a prior decision of another panel'....We are 'bound by the decisions of prior panels until such time as they are overruled either by an en banc panel of our Court or by the Supreme Court.'" [Emphasis added] This assuredly is not the end of this issue.

Notable is Judge Chin's strong 27-page dissent, which starts out by characterizing Aereo's system as "a sham. The system employs thousands of individual dime-sized antennas, but there is no technologically sound reason to use a multitude of tiny individual antennas rather than one central antenna; indeed, the system is a Rube Goldberg-like contrivance, over-engineered in an attempt to avoid the reach of the Copyright Act and to take advantage of a perceived loophole in the law." Judge Chin concludes that Aereo's transmission of live public broadcasts over the
Internet to paying subscribers are unlicensed transmissions 'to the public.'"

The decision is available at: WNET v Aereo Opinion-2d Cir 12-2786.pdf


April 25, 2013

UMG Recordings Inc. v Escape Media Group Inc.

By Barry Werbin

Attached is a copy of the First Department's unanimous reversal of Justice Kapnick's prior decision in UMG Recordings, Inc. v. Escape Media Group, Inc., which held that pre-1972 sound recordings were covered by the DMCA despite such works not being covered by the Copyright Act. UMG Recordings Inc v Escape Media Group Inc.pdf The First Department noted that Justice Kapnick's decision had relied "heavily on Capitol Records, Inc. v MP3tunes, LLC (821 F Supp 2d 627 [SD NY 2011]), in which the United States district court tackled precisely the same issue and found that the DMCA embraced sound recordings fixed before February 15, 1972."

The Court held that to adopt defendant's view "would directly violate section 301(c) of the Copyright Act." Instead, it adopted UMG's view that "Section 301(c) forbids the Act from 'annull[ing]' or 'limit[ing]' the common-law rights and remedies of owners of such works, and the DMCA, if it were to bar infringement actions against Internet companies that otherwise comply with the DMCA, would do just that." The Court observed that in the absence of the DMCA, "there would be no question that UMG could sue defendant in New York state courts to enforce its copyright in the pre-1972 recordings, as soon as it learned that one of the recordings had been posted on Grooveshark [defendant's Internet music streaming service]." Thus, any "material limitation" on a copyright owner's New York common law rights, "especially the elimination of the right to assert a common-law infringement claim, is violative of section 301(c) of the Copyright Act."

Further, in reading the Act as a whole, the Court emphasized that the DMCA's textual references to "copyright" or "copyright infringers" pertains "only to those works covered by the DMCA. The DMCA expressly identifies the rights conferred by the Copyright Act in stating who a 'copyright infringer' is for purposes of the DMCA. Had Congress intended to extend the DMCA's reach to holders of common-law rights it would have not have provided so narrow a definition."

Lastly, the Court reconciled two underling policies: "The statutory language at issue involves two equally clear and compelling Congressional priorities: to promote the existence of intellectual property on the Internet, and to insulate pre-1972 sound recordings from federal regulation. As stated above, it is not unreasonable, based on the statutory language and the context in which the DMCA was enacted, to reconcile the two by concluding that Congress intended for the DMCA only to apply to post-1972 works."

In conclusion, the Court suggested that "it would be far more appropriate for Congress, if necessary, to amend the DMCA to clarify its intent, than for this Court to do so by fiat."

August 12, 2013

Dereck Seltzer v. Green Day, Inc. et al

By Barry Werbin

The Ninth Circuit issued its significant opinion on Aug. 7th in Dereck Seltzer v. Green Day, Inc. et al., affirming on fair use grounds the District Court's grant of summary judgment to the rock band Green Day and its concert tour video producer and photographer, who had created a four-minute video that included an image of the plaintiff's copyright-protected "Scream-Icon" poster affixed to a wall on Sunset Boulevard. The still image of the poster was taken by the photographer and set designer, Roger Staub, initially for his personal use, who also was a co-defendant and made the video. The video added graphic elements to the plaintiff's work, and was played as a backdrop for one of Green Day's songs ("East Jesus Nowhere") on its 2009-10 national concert tour, including at some 70 concerts and the MTV Video Music Awards.

The Court recognized this was a "close and difficult case," but found that this was a fair use and was [no surprise] "transformative." Yet the Court to its credit delves into the propriety and scope of "transformative use," including as it has been applied by other courts and discussed in various respected law review articles and commentaries.

From the case syllabus: "First, the purpose and character of the use was transformative because the video altered the expressive content or message of the illustration, and the use was not overly commercial. Second, the illustration was a creative work, but its nature included its status as a widely disseminated work of street art. Third, the defendants copied most of the illustration, but it was not meaningfully divisible. Fourth, the video backdrop did not affect the value of the illustration."

The court's description of the video and how the image was "modified" is important and is analogous to Cariou v. Prince (which is referenced in the opinion):

"The video depicts a brick alley way covered in graffiti. As "East Jesus Nowhere" is performed, several days pass at an accelerated pace and graffiti artists come and go, adding new art, posters, and tags to the brick alleyway. The graffiti includes at least three images of Jesus Christ, which are defaced over the course of the video. Throughout the video, the center of the frame is dominated by an unchanging, but modified, Scream Icon. Staub used the photograph he had taken at Sunset and Gardner, cut out the image of Scream Icon and modified it by adding a large red "spray-painted" cross over the middle of the screaming face. He also changed the contrast and color and added black streaks running down the right side of the face."

With respect to the first Section 107 factor, the Court cited to the Supreme Court's statement in the Campbell case (1994) that the "central purpose" of this factor is to see "whether and to what extent the new work is transformative." However, the Court noted (citing to the dissent in Cariou) that "whether a work is transformative is a often highly contentious topic." The Court described the legal body of transformative use cases and commentaries as "treacherous waters." In particular, it focuses on the creation of the doctrine in Campbell based on Judge Leval's 1990 Harvard Law Review article, and found that under that analysis, the use of the poster here was transformative because Scream Icon is only one component of "what is essentially a street-art focused music video about religion and especially about Christianity." While the "message and meaning" of Scream Icon "is debatable," it "clearly says nothing about religion."

The Court also noted that "Although the law in this area is splintered ... our conclusion on transformation is generally in line with other appellate authority on transformative use. In the typical "non-transformative" case, the use is one which makes no alteration to the expressive content or message of the original work.... In contrast, an allegedly infringing work is typically viewed as transformative as long as new expressive content or message is apparent. This is so even where--as here--the allegedly infringing work makes few physical changes to the original or fails to comment on the original." [Citing Cariou v. Prince]

Last, under the first factor, the Court found that "Green Day's use of Scream Icon was only incidentally commercial; the band never used it to market the concert, CDs, or merchandise. Under these circumstances, the first fair use factor weighs in Green Day's favor."

With respect to the second factor, while "Scream Icon is a creative work, meriting strong protection," at the same time the Court considered as a mitigating factor that Scream Icon also had been widely published initially by Seltzer himself as street art, including on the Internet, which "weighs only slightly in Seltzer's favor."

On the third factor, because it is a single image, "Scream Icon is not meaningfully divisible..." Thus, "this court has acknowledged that this factor will not weigh against an alleged infringer, even when he copies the whole work, if he takes no more than is necessary for his intended use."

Finally, on the fourth potential market harm factor, the Court noted that "Where the allegedly infringing use does not substitute for the original and serves a 'different market function,' such factor weighs in favor of fair use." This factor also weighed in favor of fair use because: "The original, created six years before Green Day's use, was primarily intended as street art. Green Day's allegedly infringing use, on the other hand, was never placed on merchandise, albums, or promotional material and was used for only one song in the middle of a three hour touring show. In this context, there is no reasonable argument that conduct of the sort engaged in by Green Day is a substitute for the primary market for Seltzer's art."

The Court did reverse the District Court's award of legal fees against Seltzer, finding that his position not "objectively unreasonable" especially in this case: "This was a close and difficult case. We concluded that Seltzer's work was transformed by Green Day's use. But that transformation was far from obvious given Green Day's only slight alterations to the original. Furthermore, of the remaining three factors, one was in Seltzer's favor, one was in Green Day's favor, and one was neutral. There is simply no reason to believe that Seltzer "should have known from the outset that [his] chances of success in this case were slim to none."

A copy of the decision is attached.Green Day decision.pdf

Dish Network

By Barry Werbin

On July 24, 2013, the Ninth Circuit affirmed the District Court's denial of a preliminary injunction against Dish Network over its "Hopper" DVR that skipped over commercials, as well as its PrimeTime Anytime service. The Court held that the record did not establish that the provider, rather than its customers, made copies of television programs for viewing. The broadcaster did not establish a likelihood of success on its claim of secondary infringement because, although it established a prima facie case of direct infringement by customers, the television provider showed that it was likely to succeed on its affirmative defense that the customers' copying was a "fair use." Applying a "very deferential" standard of review, the panel concluded that the district court did not abuse its discretion in denying a preliminary injunction based on the alleged contract breaches. (The contract claims related to the broadcast contract between Fox and Dish and are not summarized here).

In order to skip over ads on DVR recorded programs, an end user consumer has to enable an "Auto-Hop" feature for programming recording within the Dish PrimeTime Anytime service, which option is not selected by default. Once enabled, however, the consumer only sees the first and last few seconds of an ad. The ads themselves are not deleted from the recording. To create the Auto-Hop functionality, Dish technicians "manually view Fox's primetime programing each night and technologically mark the beginning and end of each commercial. The program content is not altered in any way." These "marked" files are then uplinked and transmitted to subscribers in a special "file" made available to subscribers after a prime time show has aired. Simultaneously with the uplink, Dish records the marked programs for transmission in three selected states for quality assurance testing purposes to make sure that no parts of the programs themselves are cut off.

Citing the Second Circuit's 2008 Cablevision decision (which has been getting quite a lot of mileage lately, but notably had been rejected by the Cal. District Court in the Fox v. Aereokiller case now on appeal), the Court note that "Cablevision's remote-storage DVR system did not directly infringe the plaintiffs' copyrights", because even though a copy made by a user was stored on Cablevision's server and not the user's own equipment, it was akin to making a copy with a VCR. Although here Dish exercised some discretion in setting up the Hopper system, ultimately it was the end user who "must take the initial step of enabling" the prime time viewing option where Auto-Hop was available as an option. Thus, the Court agreed there was no direct infringement because "operating a system used to make copies at the user's command does not mean that the system operator, rather than the user, caused copies to be made. Here, Dish's program creates the copy only in response to the user's command." (This may foreshadow the Ninth Circuit's approach in the Aereokiller appeal with respect to the validity of Cablevision, even though it is a different issue.)

Although the District Court had also found that "Dish likely breached its contract with Fox and directly infringed Fox's reproduction rights" by making the quality assurance copies, it held that Fox was not entitled to injunctive relief because it failed to establish "irreparable harm" as a result of those copies, and the Ninth Circuit agreed, because money damages could be assessed and awarded and "the harms Fox identified - including "loss of control over its copyrighted works and loss of advertising revenue" - did not "flow from" the quality assurance copies themselves, but from the entire AutoHop program."

With respect to secondary infringement, the Court noted that Fox would first have to establish direct infringement by its end users. While the Court agreed that Fox had "established a prima facie case of direct infringement by Dish customers because Fox owns the copyrights to its shows and the users make copies," Dish established that such end use was fair use under Section 107, citing to the Sup. Ct.'s 1984 Sony decision (the "Betamax" case). Fox argued that the time-shifting involved in Sony differed from ad skipping and library building (although the Sony Court had briefly discussed ad skipping by some users and had noted that 25% of users had been fast-forwarding past ads on their Betamax recorders). However the Sony Court never decided whether such skipping was fair use.

Nevertheless, the Ninth Circuit agreed with the District Court that "commercial-skipping does not implicate Fox's copyright interest because Fox owns the copyrights to the television programs, not to the ads... If recording an entire copyrighted program is a fair use, the fact that viewers do not watch the ads not copyrighted by Fox cannot transform the recording into a copyright violation."

With respect to the PrimeTime Anytime service, the Court found that Dish made out a fair use defense. PrimeTime Anytime recordings are stored locally on a customer's Hopper device for a preselected number of days. On the first Section 107 factor, the Court found home viewing was a non-commercial use, as in Sony, because PrimeTime Anytime was a form of time-shifting.

Sony also was cited to support the second and third Section 107 factors, addressing the "nature of the copyrighted work" and "the amount and substantiality of the portion used in relation to the copyrighted work as a whole." The Ninth Circuit found that "the fact that Dish users copy Fox's entire copyrighted broadcasts does not have its ordinary effect of militating against a finding of fair use."

Finally, with respect to the fourth market harm factor, the Court held that this is the "most important element of fair use." As end users record for non-commercial uses, harm to the potential market for the copied works cannot be presumed but must be proven. Unlike in Sony, where no secondary market existed, here Fox licensed its programs to distributors, including Hulu and Apple. However, the Court noted that the trial court record establishes "that the market harm that Fox ... allege[s] results from the automatic commercial-skipping, not the recording of programs through PrimeTime Anytime. Indeed, Fox often charges no additional license fees for providers to offer Fox's licensed video on demand, so long as providers disable fast-forwarding." Thus, "the commercial skipping does not implicate any copyright interest."

A copy of the decision is attached here.Fox v Dish 9th Cir .pdf

August 19, 2013

Metropolitan Regional Information Systems v. American Home Realty Network

By Barry Werbin

Metropolitan Regional Information Systems v. American Home Realty Network (4th Cir. July 17, 2013) is an interesting and important decision involving compilation registrations and copyright protections in databases, here consisting of real estate multiple listing service (MLS) data and related photos. The case also addresses the novel but important question of the enforceability of online electronic transfers of copyright ownership interests under E-Sign.

Metropolitan Regional Information Systems (MRIS) offers an online fee-based MLS to real estate brokers and agents. Defendant American Home Realty Network (AHRN) "circumvents those brokers and agents by taking listing data from online database compilers like MRIS and making it directly available to consumers on its 'real estate referral' website." Brokers/agents subscribing to the MRIS service assign to MRIS their copyrights in photos submitted along with the listing data. MRIS also registers is databases with the Copyright Office under regulations covering automated computer databases, which include the photos, text and the collection and compilation of the MLS listings.

The District Court, which is affirmed by the 4th Cir., issued a preliminary injunction against AHRN based on copyright infringement but limited it pending the appeal to enjoining only AHRN's use of the MRIS photos, not the compilation itself or any textual elements. On appeal, the Fourth Circuit initially rejected AHRN's blanket argument that there was no copyright protection in the MLS database as a whole because of a lack of originality as a compilation, citing the Supreme Court's 1991 decision in Feist; however the Court did not rule on that issue in the context of the MRIS database because the scope of the preliminary injunction was limited to the photos.

AHRN made two arguments against the preliminary injunction: (1) when MRIS registered the database it failed to properly register its copyright in the individual photos; and (2) MRIS did not possess copyright interests in the photos because the subscribers' electronic acceptance of MRIS's terms of use failed to transfer those rights. The Court characterized these arguments as presenting "novel questions," but ruled in favor of MRIS.

The Court discusses the copyrightability of "compilations," noting that the "protection afforded to a compilation is independent of any protection that might be afforded to its individual components." However, "compilations made up of individual components which are themselves copyrightable are called 'collective works.'" Section 201(c) of the Copyright Act also provides "a default presumption that the author of a collective work does not own the copyright in any component part" in the absence of an express transfer of copyright.

With respect to the first question on scope of protection arising from the registration of the compilation, the Court held that Section 409, which provides for registration of compilations, "[a]s applied to a collective work whose author has also acquired the copyrights in individual component works, the text of Section 409 is ambiguous at best." The Register of Copyrights, however, has promulgated regulations on this process under 37 C.F.R. § 202.3(b)(5)-(10), "allowing for group registration of certain categories of collective works: automated databases..." "Under this provision, the author of an automated database may file a single application covering up to three months' worth of updates and revisions, so long as all of the updates or revisions (1) are owned by the same copyright claimant, (2) have the same general title,(3)have a similar general content,including their subject, and(4)are similar in their organization."

The Circuit noted that "courts have disagreed on how to apply the Copyright Act's registration requirement to collective works and their component parts," particularly as to whether the underlying "authors" of the components must be identified in a registration application as a precondition to bringing suit for infringement, as was the ruling in a 2010 SDNY case, Muench Photography, Inc. v. Houghton Mifflin Harcourt Publ'g Co., 712 F. Supp. 2d 84.

Here the Fourth Circuit adopts the view that such disclosure is not necessary and that "[t]he Copyright Office is optimistic that those decisions will be overturned on appeal." As MRIS owned the copyrights in the constituent photos that had been transferred prior to its database registration applications, and listed "photographs" as the basis for updating its database registration claims, "'it would be... [absurd and] inefficient to require the registrant to list each author for an extremely large number of component works to which the registrant has acquired an exclusive license.'" [Citation omitted] "Adding impediments to automated database authors' attempts to register their own component works conflicts with the general purpose of Section 409 to encourage prompt registration... and thwarts the specific goal embodied in Section 408 of easing the burden on group registrations."

[Note that there is a new Copyright Office regulation effective August 8, 2012, requiring that "when a registration is made for a database consisting predominantly of photographs, and the copyright claim extends to the individual photographs themselves, each of those photographs must be included as part of the deposit accompanying the application."]

With respect to the second issue, the Court upheld MRIS's argument "that an electronic transfer may satisfy Section 204's writing and signature requirements, particularly in light of the later-enacted Electronic Signatures in Global and National Commerce Act (the "E-Sign Act"), 15 U.S.C. § 7001 et seq...." The Court discusses this point in detail under E-Sign, particularly in the context of the enforceability of an online terms of use that are affirmatively "accepted" by subscribers. The Court found that none of the express exceptions to coverage in E-Sign applied to copyright transfers and emphasized it was not about to imply any such exception. It did note that there has been only one other case to date in the Southern District of Florida that has addressed electronic copyright transfers, where the court held that email conveyance of copyrights was sufficient. The Fourth Circuit thus concluded that "[t]o invalidate copyright transfer agreements solely because they were made electronically would thwart the clear congressional intent embodied in the E-Sign Act. We therefore hold that an electronic agreement may effect a valid transfer of copyright interests under Section 204 of the Copyright Act."

A copy of the Fourth Circuit decision is available here: MGIS decision (4th Cir ).pdf

Faulkner Literary Rights, LLC v. Sony Pictures Classics Inc., et al

By Barry Werbin

The decision in Faulkner Literary Rights, LLC v. Sony Pictures Classics Inc., et al., (N.D. Miss. July 18, 2013) dealt a quick Rule 12(b)(6) dismissal death-knell to a widely criticized claim by the Faulkner folks who alleged that Sony infringed the copyright in Faulkner's book Requiem for a Nun, where, in Woody Allen's film Midnight in Paris, Owen Wilson's character (Gil Pender) at one point misquotes a line from that book (with attribution credit). The misquoted and original lines are:

Original: "The past is never dead. It's not even past."

Misquote: "The past is not dead! Actually, it's not even past. You know who said that? Faulkner. And he was right. And I met him, too. I ran into him at a dinner party."

The District Court had no trouble finding this was fair use. The court in particular cited to Fifth and Second Circuit precedents for the contention that "the substantiality of the similarity is measured by considering the qualitative and quantitative significance of the copied portion in relation to the plaintiff's work as a whole." Qualitative and quantitative significance of course are one of the four core fair use factors under Section 117 of the Copyright Act.

The court also referenced the de minimis copying doctrine, which has been recognized in the Fifth Circuit but without having "specifically enunciated its proper place in the infringement analysis." The doctrine "is part of the initial inquiry of whether or not the use is infringement in the first instance, as opposed to the fair use inquiry, which is an affirmative defense." Either way, the court deemed "both the substantial similarity and de minimis analyses in this case to be fundamentally related, and wholly encompassed within the fair use affirmative defense." As the de minimis doctrine is "largely undeveloped" the court was "reluctant to address it, except within the context of Sony's affirmative defense, fair use."

With respect to the first fair use factor, the court found that "[t]he speaker, time, place, and purpose of the quote in these two works are diametrically dissimilar... It is difficult to fathom that Sony somehow sought some substantial commercial benefit by infringing on copyrighted material for no more than eight seconds in a ninety minute film." Other factors included the comedic context of the film and that the "minuscule" nine words in issue "adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message." (quoting Campbell) Thus, the court readily found "heavy [in] favor of transformative use that... diminishes the significance of considerations such as commercial use that would tip to the detriment of fair use."

The second factor (nature of the copyrighted work) was found to be "neutral" - the court was not prepared to characterize the film as a parody, but nevertheless did say it was "highly transformative under the first factor, whether parody or not."

Under the third "substantiality" factor, Falkner argued that the quote described the "essence" of Requiem for a Nun, that "there is no such thing as past." Yet the court deemed this to refer to the qualitative theme of Requiem itself, not the "not the qualitative importance of the quote itself." The ideas embodied in Requiem for a Nun cannot be protected, only its expression, which here "constitutes only a small portion of the expression of this idea throughout the novel." The quote itself in the film "is a fragment of the idea's expression."

Interestingly, the court on this factor also held that "the quote at issue is of minuscule quantitative importance to the work as a whole. Thus, the court considers both the qualitative and quantitative analyses to tip in favor of fair use. The court concludes that no substantial similarity exists between the copyrighted work and the allegedly infringing work." [Emphasis added]Query in light of this finding of no "substantial similarity" why fair use even had to be addressed as fair use presupposes there is infringement.

On the last potential market effect factor, the record in the case was silent. In any event, the court considered this factor "to be essentially a non-issue in light of the stark balance of the first factors weighing in favor of Sony..." Nevertheless, the court did not see any relevant market harm resulting from Sony's use of the quote. If anything, the use in the film helped Faulkner's legacy.

Finally, the court expressed its frustration at the entire lawsuit: "How Hollywood's flattering and artful use of literary allusion is a point of litigation, not celebration, is beyond this court's comprehension."

A copy of the decision is available here: Faulkner decision (ND Miss ) (2).pdf

August 25, 2013

Unclaimed Property Recovery Service, Inc., v. Kaplan

By Barry Werbin

The Second Circuit issued a decision of first impression filed on August 20th in Unclaimed Property Recovery Service, Inc., v. Kaplan, holding that "that where the holder of a copyright in a litigation document has authorized a party to the litigation to use the document in the litigation, this constitutes an irrevocable authorization to all parties to the litigation (and to their attorneys, as well as the court) to use the documents thereafter in the litigation throughout its duration."

Here, the plaintiff failed to state a claim for copyright infringement tied to the defendant's use of a complaint written by co-plaintiff Gelb and copyrighted by plaintiff Unclaimed Property Recovery Service, where the plaintiffs alleged that the defendant's amendment of the pleadings infringed on their copyrights.

The Court held:

"This case presents an issue of first impression: whether the holder of a copyright in a litigation document who has authorized a party to a litigation to use the document in the litigation may withdraw the authorization after the document has already been introduced into the litigation and then claim infringement when subsequent use is made of the document in the litigation. We hold that such an authorization necessarily conveys, not only to the authorized party but to all present and future attorneys and to the court, an irrevocable authorization to use the document in the litigation thereafter."

Click here for a copy of the decision: OpenAppellateOpinion aspx.pdf

September 16, 2013

Fox Television Stations, Inc. v FilmOn X, LLC, et al.

By Barry Werbin

On September 5th, the District of D.C. issued a preliminary injunction against FilmOn X, LLC (FilmOn X), in favor of Fox Television Stations, Inc. (Fox) and other over-air broadcasters in the D.C. area, including Disney and Telemundo. FilmOn X isn't a stranger to these claims, as it was previously known as AereoKiller, under which name it was enjoined by a California district court earlier this year in a case currently on appeal to the Ninth Circuit. (After trademark complaints by Brooklyn-based Aereo, AereoKiller changed its name.)

Like Aereo, FilmOn X uses tiny individual antennas to capture broadcast signals over the airways and retransmit them to subscribers. A specific antenna is assigned to one specific individual subscriber only when that subscriber is watching broadcast TV through the system; once a user is done watching TV, the same antenna is then assigned to a different user. No single antenna is used by more than one user at a time. Broadcast data are routed from the antenna to a FilmOn X server, where it is stored in a "unique" directory for each user. After a user stops viewing a program, the data in the user's unique directory is deleted. FilmOn X also employs a DVR that allows its subscribers to pause live programming or record shows for later viewing. User access for standard definition broadcasts is free; hi-definition and selecting shows for later viewing incur fees.

The plaintiffs relied on the AereoKiller decision in California, Fox Television Systems, Inc. v. Barry Driller Content Systems, PLC, 915 F. Supp.2d 1138 (C.D. Cal. 2013), while FilmOn X relied on WNET, Thirteen v. Aereo, Inc., 712F.3d 676 (2d Cir. 2013), reh'g denied 2013 WL 3657978 (2d Cir. July 16, 2013), and the "Cablevision" case - Cartoon Network, LP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008). The D.C. court here made it clear that it was not making a simple "blind choice" between the two.

[Note - Oral argument in the AereoKiller case took place before the Ninth Circuit during the last week of August, so a decision there is imminent. Interestingly, a visiting judge on the Ninth Circuit panel was Hon. Brian Cogan (formerly of Stroock) from the SDNY, where the Second Circuit had upheld Aereo's defenses, finding no infringement.]

The court held that "the Copyright Act forbids FilmOn X from retransmitting Plaintiffs' copyrighted programs over the Internet. Plaintiffs are thus likely to succeed on their claim that FilmOn X violates Plaintiffs' exclusive public performance rights in their copyrighted works." The court first undertook a detailed analysis of the respective decisions in the Barry Driller, Cablevision and Aereo decisions, also emphasizing Judge Denny Chin's strong dissent in Aereo. The court then took a close look at the core issue in all the cases - the proper interpretation and application of the Copyright Act's "Transmit Clause" in 17 U.S.C. § 101.

After analyzing the legislative history, the D.C. court found that such history and the plain language of the Transmit Clause respecting the meaning of the phrase to "perform or display a work 'publicly'" by any "device or process," compelled the conclusion that by "making available Plaintiffs' copyrighted performances to any member of the public who accesses the FilmOn X service, FilmOn X performs the copyrighted work publicly...." The court found the definitions within the Transmit clause are broadly encompassing of new technology, especially in light of the terms "device," "'machine," or "process" being defined as "now known [i.e., in 1976] or later developed." The court thus found that FilmOn X "transmits (i.e., communicates from mini-antenna through servers over the Internet to a user) the performance (i.e., an original over-the-air broadcast of a work copyrighted by one of the Plaintiffs) to members of the public (i.e., any person who accesses the FilmOn X service through its website or application) who receive the performance in separate places and at different times (i.e. at home at their computers or on their mobile devices)."

FilmOn X's one-to-one customer relationship was characterized as a "charitable description" of its technological arrangement. The court emphasized that the "the mini-antennas are networked together so that a single tuner server and router, video encoder, and distribution end point can communicate with them all....This system, through which any member of the public who clicks on the link for the video feed, is hardly akin to an individual user stringing up a television antenna on the roof." The aggregation of new technologies cannot avoid liability, said the court, because Congress defined "device or process" broadly to encompass "any other techniques and systems not yet in use or even invented." The court expressly agreed with Judge Chin's dissent in Aereo, stating in a footnote that the Second Circuit in "Cablevision and Aereo mistakenly substituted 'transmission' for 'performance' in its analysis."

Last, the court had no difficulty in finding, as has every court that has visited the issue (including the District Court in Aereo), that "unauthorized Internet streaming of television and other video programming causes irreparable harm to the copyright owners...." In particular, the court highlighted several findings of non-economic injury that plaintiffs likely would suffer in the absence of injunctive relief: "harm to their ability to negotiate with advertisers; damage to their contractual relationships and ability to negotiate with authorized retransmitters; interference with their proprietary and licensed online distribution avenues...and the loss of control over the distribution and quality of their copyrighted programs." The court concluded that a nationwide injunction was proper but excluded the Second Circuit, "where Aereo is the binding precedent."

The decision is attached and can also be accessed here: http://www.scribd.com/doc/165845374/filmonx

September 23, 2013

IN RE PETITION OF PANDORA MEDIA, INC.: SDNY Allows Pandora to Maintain License to ASCAP's Repertory

By Barry Werbin

On September 17th,Judge Cote in the SDNY issued an interesting decision in favor of Pandora, holding that ASCAP cannot remove individual songs from Pandora's blanket license for streaming purposes without also removing them from its entire catalog, notwithstanding that some of ASCAP's licensors restricted certain songs from being licensed for "new media rights." ASCAP was held to be bound by its longstanding antitrust consent decree from doing that, and thus preferring one customer over another. The court distinguished the Copyright Act's divisibility of the bundle of exclusive copyright rights from the superseding restrictions imposed by the consent decree, which defines "works" as compositions not individual rights.

http://www.hollywoodreporter.com/thr-esq/judge-allows-pandora-maintain-license-631671

October 10, 2013

Aereo Decision

By Barry Werbin

In the ongoing battle between over-the-air-broadcasters and Aereo, as well as Aereo's copycat competitor FilmOn (formerly known AereoKiller), the U.S. District court of Massachusetts issued its anxiously awaited decision on October 8th. The court denied Hearst Stations Inc. (as the owner of a local TV station) a preliminary injunction against Aereo, which rolled out its retransmission streaming over-the-Internet antenna service in the Boston area in May and continues to aggressively expand into other parts of the country. The court sided with the Second Circuit's opinion in WNET, Thirteen v. Aereo, Inc., 712 F.3d 676 (2d Cir. 2013), which held that Aereo's technology system incorporating single-user dedicated dime-size antennas resulted in the transmission of a unique copy of a copyrighted broadcast work to a single unique user, and was therefore not a "public performance" that infringed the broadcasters' exclusive right to publicly perform their works.

The Second Circuit previously affirmed the issuance of a preliminary injunction against Aereo in New York and denied the broadcasters' petition for a rehearing en banc, with a strong dissent from Judge Denny Chin. The broadcasters will file a petition for certiorari to the Supreme Court.

Meanwhile, district courts in the District of Columbia [Fox Television Stations, Inc. v. FilmOnX LLC, 2013 WL 4763414 (D.D.C. Sept, 5, 2013)] and California [Fox Television Stations, Inc,. v. BarryDriller Content Systems PLC, 915 F. Supp. 2d 1138 (C.D. Cal. 2012)] have both ruled in favor of a group of broadcasters in their separate suits against FilmOn, with the D.C. court recently issuing a nationwide injunction (excluding the Second Circuit) against FilmOn. Oral argument before the Ninth Circuit recently took place and a decision from that Circuit is imminent. On October 7th, a group of broadcasters sued Aereo in the District Court of Utah.

In its decision, the District Court of Massachusetts essentially adopted the reasoning of the Second Circuit but without an extensive discussion, citing to the legislative history behind the so-called "Transmit Clause" in Section 101 of the 1976 Copyright Act, which in the court's view favored Aereo's "unique copy/unique user" theory that was essentially adopted by the Second Circuit.

The Boston-based court also found that Aereo likely did not violate the broadcasters' exclusive right to make copies of their broadcast content when Aereo made more than "transitory" copies of those works on hard drives every time one of its subscribers chose to watch or record a program. The court found that Aereo itself did not engage in any "volitional conduct"; rather, it was "likely that the user supplies the necessary volitional conduct to make the copy." However, the court found that this was "a closer question than the issue of public performance", and that discovery "could disclose that Aereo's service infringes WCBV's right to reproduce its work."

Finally, the court found that Aereo's transmissions did not infringe the broadcasters' exclusive distribution right because courts have interpreted the distribution clause to require the "actual dissemination" of copies. As Aereo was not permitting the downloading of programming but only its streaming, Aereo was deemed to be "performing," rather than "distributing," copyrighted works. The court also summarily dismissed a claim that Aereo's transmissions created derivative works by converting the audio/video content into a different digital format compatible with Internet streaming.

With respect to the request for injunctive relief, the court further found that the balance of hardships did not favor one side over the other because each side made cogent arguments concerning irreparable harm, and that these respective contentions "balance out."

A copy of the decision is available here:Aereo-Boston-Ruling.pdf

October 22, 2013

Sorry For Partying, But It's Fair Use

By Barry Werbin and Laura Tam
Herrick, Feinstein LLP

A recent decision by the district court for the Western District of Wisconsin tests the boundaries of the "transformative use" doctrine in the ongoing fair use debate concerning works of visual art. In Kienitz v. Sconnie Nation LLC, 2013 WL 4197454 (W.D. Wis. Aug. 15, 2013), the court held that an apparel company's use of a respected photojournalist's photograph of Paul Soglin, the mayor of Madison, Wisconsin, in modified form, did not constitute copyright infringement. Citing the Second Circuit Court of Appeals' decision in Cariou v. Prince, 714 F.3d 694 (2d Cir. 2013), the court determined that the use of the modified photograph on shirts intended to make a political statement, that were manufactured and sold by the apparel company, was transformative and fair.

In 2011, the plaintiff, Michael Kienitz, photographed Soglin at the mayoral inauguration ceremony. Kienitz, a long-time political supporter of Soglin, gave the mayor permission to use the photograph for any noncommercial purposes, including the official website for the City of Madison, as well as the mayor's Facebook profile.

In 2012, the defendants, Sconnie Nation LLC and Underground Printing - Wisconsin, LLC, decided to create and sell shirts to criticize Soglin's opposition to the Mifflin Street Block Party, a controversial annual event that began in 1969 as part of the student protest movement on a local college campus. Ironically, Soglin had been arrested at the first Mifflin Street Block Party when he was a student protest leader, but had publicly stated in 2011 that he was interested in ending the event. In their search for a recognizable image of Soglin, the defendants downloaded Kienitz's photograph from the City of Madison's website, altered the photo as a high-contrast, monochrome image and colored the mayor's face lime green, adding the phrase "Sorry For Partying" across the image. Fifty-four of the shirts were sold for a net profit of $910.

After Kienitz brought suit for copyright infringement, both parties moved for summary judgment on the issue of whether the use of the Kienitz's photograph was a fair use.

With respect to the first statutory fair use factor under 17 U.S.C. §107, the court determined that the modified image used on the shirt was "transformative," even though it was a commercial product and did not comment on the photograph itself. Kienitz had argued that the shirt was really a derivative work and that the concept of transformative use was meant for cases where there was a commentary on the original work (e.g., a parody), whereas here the shirt was not commenting on the photo itself. The court, however, found Kienitz's argument "debatable." The court noted that by altering the photograph, "the character and expressing of the image is completely different from the original." Moreover, "[d]efendants employed this photograph for the diametric purposes of sophomoric humor and political critique." Citing to Cariou v. Prince, the court noted that "a 'work could be transformative even without commenting on [the author's] work or on 'culture'--'[w]hat is critical is how the work in question appears to the reasonable observer.'" The court found that the "robust transformative nature of defendants' . . . shirts tips this first factor toward fair use, even taking into account the fact that the shirts were a commercial product."

The court determined that the second factor (nature of the copyright work) was a "toss-up." Although the court seemed to agree with the defendants' argument that the photograph did not contain as much artistic expression as photographs in other fair use cases, the court determined that the photo was nevertheless entitled to copyright protection [it was registered with the Copyright Office] because Kienitz "would have made at least some artistic/creative decisions with respect to composition, lighting and timing."

Under the third "substantiality" factor, the court determined that the amount and substantiality of the defendants' use was reasonable since the defendants "did not take the 'heart' of Kienitz's work", as it "figuratively revers[ed] the tenor of the image." Moreover, the court found that this factor favored the defendants because "the artistic elements claimed by Kienitz (e.g., the lighting, expression and pose) fade to insignificance on the [defendants'] shirts, if they do not evanesce completely."

Last, the court acknowledged that the U.S. Supreme Court in Harper & Row Publishers, Inc. v. Nation Enterprises, 471 U.S. 539, 566 (1985), had characterized the fourth potential market effect factor as "'the single most important element of fair use.'" The court found that the image of the mayor on the defendants' shirts was not a substitute for Kienitz's photograph, because the market for the photograph and the market for the shirts "are skew, as in nonintersecting and not even parallel." Kienitz admitted that he would never have licensed his photograph "for the purpose of criticizing, mocking, parodying or satirizing Mayor Soglin." Since it was unlikely that the shirts would reduce the demand for Kienitz's photograph, the court easily found that this factor favored the defendants.

After balancing all the relevant factors, the court held that the defendants were entitled to summary judgment on Kienitz's copyright infringement claim.

The case is yet another example of the ongoing arguable erosion of the exclusive right of copyright owners to create derivative works from their original works of authorship in the field of visual arts. Consider that the term "derivative work" in 17 U.S.C. 101 is defined in relevant part as "a work based upon one or more preexisting works, such as a[n] ... art reproduction.. or any other form in which a work may be recast, transformed, or adapted." (Emphasis added). Notably, while this definition expressly uses the word "transform," the word "transformative," being a judicial-made doctrine, does not appear anywhere in Section 107, which defines the fair use defense. It will be interesting to see how future fair use decisions outside of the Second Circuit will be influenced by that court's analysis in Cariou v Prince.

A copy of the decision is available here: http://bloximages.chicago2.vip.townnews.com/host.madison.com/content/tncms/assets/v3/editorial/d/49/d49b304a-6b21-5b94-9cd2-420d8a9041ff/520e5e96e5b5a.pdf.pdf

November 12, 2013

Seven Arts v. Content Media and Paramount Pictures Corp

By Barry Werbin

An important Ninth Circuit decision of first impression for that Court issued November 6th in Seven Arts v. Content Media and Paramount Pictures Corp. Seven Arts Filmed Ent Ltd v Content Media Corp .pdf. The Court held that "an untimely ownership claim will bar a claim for copyright infringement where the gravamen of the dispute is ownership, at least where, as [in this case], the parties are in a close relationship."

Here, the plaintiff had been embroiled with the defendant Content Media on ownership issues respecting copyrights in motion pictures in Canadian courts (based on a forum selection clause), where the plaintiff ultimately prevailed in an action originally filed in 2003. While the Canadian action was pending, the plaintiff also filed suit in California in 2005, claiming sole copyright ownership of the movies in question (and disputing the validity of an underlying agreement between the parties), but that suit was stayed pending the outcome of the Canadian action. In 2008, the California district court dismissed the California action for lack of prosecution. Meanwhile, Paramount had expressly repudiated the plaintiff's claim of ownership of the copyrights in 2005.

In 2011, the plaintiff won a declaratory judgment in the Canadian action that it was the sole owner of the copyrights under the U.S. Copyright Act. Immediately after, the plaintiff filed this new action in California in 2011 against Paramount based on the Canadian judgment, making the same ownership claims as in its 2005 action, which had been dismissed, but also claiming copyright infringement. The district court construed the gravamen of the claims as ownership claims and dismissed them as time-barred under the three year statute of limitations for ownership claims based on "when plain and express repudiation of co-ownership is communicated to the claimant, and [such claims] are barred three years from the time of repudiation."

The Ninth Circuit agreed that the case was fundamentally about ownership. The Court framed the issue as "whether a claim for copyright infringement in which ownership is the disputed issue is time-barred if a freestanding ownership claim would be barred." As an issue of first impression in the Ninth Circuit, the Court looked to precedent in the Second and Sixth Circuits. [The Second Circuit case being Kwan v. Schlein, 634 F.3d 224, 229 (2d Cir. 2011)]. The Ninth Circuit also cited Nimmer, and held that "Our sister circuits' approach makes good sense -- allowing infringement claims to establish ownership where a freestanding ownership claim would be time-barred would permit plaintiffs to skirt the statute of limitations for ownership claims and lead to results that are 'potentially bizarre....'" Of particular importance was the fact that the plaintiff's predecessor had started a relationship with Paramount over the movie production rights as early as 1998; the Court thus found that Paramount was not a third party stranger to the underlying transactions but was in a "close relationship" among the parties.

The decision thus aligns with those in the Second and Sixth Circuits. The Court expressly declined the plaintiff's urging to create a rift among the Circuits. Of particular interest is the Court's policy statement: "'the creation of a circuit split would be particularly troublesome in the realm of copyright.'.... Creating '[i]nconsistent rules among the circuits would lead to different levels of protection in different areas of the country, even if the same alleged infringement is occurring nationwide.'...Such would contravene Congress's intent in revising the Copyright Act."

It will be interesting to see whether this policy statement affects the Ninth Circuit's much awaited decision in the Aerokiller case or if it will set up a rift with the Second Circuit's Aereo decision.

November 22, 2013

GOOGLE BOOKS IS (LEGALLY) "TRANSFORMATIVE"

By Barry Werbin and Bryan Meltzer, Herrick, Feinstein LLP

The highly publicized, now eight year old, "Google Books" class action case came to a close at the district court level on November 14th, with Southern District Judge Denny Chin granting Google summary judgment on its copyright fair use defense. The Authors Guild, Inc., et al. v. Google Inc., 05 Civ. 8136 (S.D.N.Y. Nov.14, 2013). In the process, Judge Chin revealed that he is among those who believe that Google has changed the world for the better. Retaining the action at the district court level despite his recent appointment to the Second Circuit Court of Appeals, Judge Chin found that Google Books is "transformative" and benefits "all society."

As the backdrop to the unusual trajectory of the case, in 2004 Google turned its attention to the mass digitalization of books by starting an ambitious project called "Google Books." Under the program, Google entered into agreements with various major research libraries to digitally scan their entire collections with optical technology that would permit full text searching. The digital copies would then be made available to participating libraries and Google would permit public online searches of the content. In response to search queries, only portions, or "snippets," of a book's content would be displayed to anyone having Internet access and a computer. As of today, over 20 million books have been scanned for the project.

The Authors Guild and three authors/copyright holders, the plaintiffs in the Google Books case, filed a class action, alleging that Google was committing mass infringement of authors' copyrighted material by digitally scanning and storing the entire contents of the books and displaying the snippets without their permission. The case was assigned to Judge Chin, who was then a District Court judge. After initial extensive litigation and several years of intense negotiation, all the parties reached a complex class action settlement agreement that would have granted broader rights to Google in exchange for a $125 million settlement payment. However, when the settlement was presented to Judge Chin -- who by then had been appointed to the Second Circuit -- for approval in 2011 (as class action settlements require judicial approval), he rejected it in response to many objections filed by interested parties, including the Justice Department, which voiced potential antitrust concerns.

Judge Chin then certified the plaintiff class before addressing any of the substantive copyright issues and Google's fair use defense. Google appealed the class certification to the Second Circuit, which issued an unusual ruling earlier this year in which it reversed the class certification as being premature and remanded the case to Judge Chin for a decision on Google's fair use defense, on the grounds that "the resolution of Google's fair use defense in the first instance will necessarily inform and perhaps moot our analysis of many class certification issues...." Authors Guild v. Google Inc., 721 F.3d 132, 134 (2d Cir. 2013).

After the case was remanded and discovery completed, both plaintiffs and Google moved for summary judgment with respect to the "fair use" defense. Following the judicial trend of focusing on whether the alleged infringement was "transformative," Judge Chin has now held that Google's use of the copyrighted books constitutes "fair use" under Section 107 of the Copyright Act.

The statutory "fair use" defense is derived from the Constitution's directive in Article I, Section 8, that the purpose of copyright, along with patents, is "[t]o promote the Progress of Science and useful Arts." The "fair use" doctrine is codified in Section 107 of the Copyright Act, which requires courts to asses at least four delineated factors, namely: (1) the purpose of the use (i.e., is the use for commercial or nonprofit educational purposes), (2) the nature of the copyrighted work, (3) the amount and substantiality of the infringed portion used compared to the copyrighted work as a whole, and (4) the effect of the infringement upon the potential market for or value of the copyrighted work. While a court must consider these four factors in evaluating a fair use defense, the court is free to consider any other relevant factors, a point also noted by Judge Chin.

Judge Chin cited to Judge Pierre Leval's notable 1990 Harvard Law Review article entitled Toward a Fair Use Standard, where the "transformative use" theory was first articulated. Judge Leval there opined that the use of a copyrighted work should be deemed a "fair use" if it is "transformative" (i.e., "adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message ...") 103 Harv. L. Rev. 1105, 1111 (1990). Following Judge Leval's lead, in 1994 the Supreme Court ruled in the context of a commercial parody that under the first fair use factor, "the enquiry focuses on whether the new work merely supersedes the objects of the original creation, or whether and to what extent it is 'transformative,' altering the original with new expression, meaning, or message. The more transformative the new work, the less will be the significance of other factors, like commercialism, that may weigh against a finding of fair use." Campbell v. Acuff-Rose Music, 510 U.S. 569 (1994). Since then, courts have increasingly decided "fair use" defenses by analyzing whether the alleged use was "transformative."

In finding that Google Books' use of the copyrighted works was "transformative" and protected as "fair use," Judge Chin considered each of the four factors enumerated by Section 107.

First, with respect to the purpose and character of Google Books' use, Judge Chin found that, while Google's "principle motivation is profit, the fact is that Google Books serves several important educational purposes." In particular, Judge Chin found that Google Books (i) "transforms expressive text into a comprehensive word index that helps readers, scholars, researchers and other find books," (ii) serves as "an important tool for libraries and librarians and cite-checkers as it helps to identify and find books," (iii) helps "users locate books and determine whether they may of interest" and (iv) transforms "book text into data for purposes of substantive research, including data mining and text mining in new areas, thereby opening up new fields of research."

Judge Chin also found that Google did not directly profit from the use of the copyrighted material because it did not sell its scans of the copyrighted works, did not sell the snippets that it displays and did not run ads on the "About the Book" pages that contain the snippets. Accordingly, Judge Chin found that the first factor concerning the use of the copyrighted material "strongly favor[ed] a finding of fair use."

Second, with respect to the nature of the copyrighted works, Judge Chin found that the vast majority of books found in Google Books are non-fiction, published and available to the public. As non-fiction books that can be found in the public domain are afforded less protection, Judge Chin found that the second factor concerning the nature of the copyrighted material favored a finding of fair use.

Third, with respect to amount and substantiality of the copyrighted material used, Judge Chin found that while Google scans the full text of the books verbatim, "it limits the amount of text that it displays in response to each search." However, despite his approval of Google's limitation on the amount of text displayed, Judge Chin concluded that the third factor "slightly" favored a finding against fair use.

Fourth, with respect to the effect of the use upon the potential market or value of the copyrighted works, Judge Chin rejected the plaintiffs' argument that Google Books negatively impacted the market for the books and served as a "market replacement." To the contrary, Judge Chin found that "a reasonable factfinder could only find that Google Books enhances the sales of books to the benefit of copyright holders." In particular, he found that Google Books promotes the authors' works and improves their book sales. Accordingly, Judge Chin found that the fourth factor concerning the effect of the use of the copyrighted material weighed strongly in favor of a finding of fair use.

Weighing these factors and considering what he perceived to be Google Books' other public benefits, such as its ability to preserve old books and enable disabled and underserved populations to actually have access to the books, Judge Chin found that Google Books is "transformative" and its alleged infringement of the copyrighted works is protected by the "fair use" doctrine. He further found that Google could provide its partner libraries with digital copies of the books they already owned because such actions (by both Google and the libraries) also constitute "fair use."

Based on these findings, Judge Chin granted Google's motion for summary judgment in its entirety. In doing so, he further solidified Judge Leval's "transformative" use doctrine.

The case is clearly headed back to the Second Circuit. As that Court previously punted the class certification issue to allow Judge Chin to decide the "fair use" question because it could "moot" the certification issue, many practitioners believe that it is likely that the Second Circuit will affirm Judge Chin's decision.

December 21, 2013

Daniel v. Goliath: Photographer Daniel Morel Awarded $1.2 Million for Copyright Infringement from Photo Agency Giants AFP and Getty

By Barry Werbin and Laura Tam, Herrick, Feinstein LLP

On November 22, 2013, a federal jury ordered Agence France-Presse (AFP) and Getty Images (Getty) to pay a whopping $1.2 million to Daniel Morel (Morel), a freelance photojournalist, for their unauthorized use and distribution of eight photographs Morel had posted to Twitter. The jury determined that AFP and Getty had willfully violated the Copyright Act and the Digital Millennium Copyright Act (DMCA) when they widely disseminated Morel's photographs of the devastation of the 2010 Haiti earthquake without his permission. Morel asserted that AFP and Getty had infringed on a number of exclusive rights granted by 17 U.S.C. § 106, including the rights of reproduction, public display and distribution.

On January, 12, 2010, hours after a devastating earthquake struck Haiti, Morel took photographs of the aftermath and posted them to Twitter through a TwitPic account. The photographs were reposted by Lisandra Suero (Suero) and were picked up by the AFP and uploaded to its database. The images, however, were wrongly credited to Suero. The AFP then transmitted the photos to Getty, since the stock agencies had a license agreement with reciprocal rights to license each other's images. From there, the photographs were published on Getty's website, and numerous clients, including The Washington Post, licensed and published the images. Soon thereafter, the agencies realized their mistake, issuing kill notices for Morel's photographs and alerting subscribers of the copyright issue. While Morel's images from the AFP's database were removed after the issuance of the kill notice, Morel's photographs that had been attributed to Suero remained on Getty's website until February 2, 2010, when they were finally removed.

The AFP initiated legal action by filing a lawsuit against Morel in March 2010, seeking a declaration that it had not infringed Morel's copyrights in the images. In response, Morel filed counterclaims against AFP, Getty and The Washington Post for willful infringement.

On January 14, 2013, the Southern District of New York granted Morel's motion for summary judgment, finding that AFP, Getty and The Washington Post were liable for direct copyright infringement. The Washington Post later settled with Morel for an undisclosed amount. The court rejected the stock agencies' affirmative defenses, including that (1) by posting the photos on Twitter, Morel had granted AFP a license to use his images, (2) Getty was entitled to the benefit of the DMCA safe harbor provision, and (3) Getty had not engaged in volitional conduct to impose liability.

First, the court determined that the Terms of Service of Twitter or TwitPic did not grant the AFP a license to sell and distribute Morel's photographs. Pointing to specific language in the Terms of Service, which provided that "[y]ou retain your rights to any Content you submit, post or display" and "what's yours is yours -- you own your own content," the court determined that the AFP was not a third party beneficiary to the Terms of Service and therefore not insulated from liability.

Second, the court rejected Getty's argument that it was protected by 17 U.S.C. § 512(c)(1), the safe harbor provision of the DMCA for service providers. The court noted that "an entity that is directly licensing copyrighted material online is not a 'service provider.'"

Finally, the court also rejected Getty's argument that it had not taken affirmative acts to violate Morel's copyrights. The court stated that there were genuine disputes of fact on this issue, since a jury could infer that Getty took volitional acts to distribute Morel's photographs in violation of his copyrights, including entering into a license agreement with AFP, setting a price for the photographs, and maintaining the website on which the images were displayed. After the court granted summary judgment to Morel, the case proceeded to trial on the sole determination of damages.

The jury awarded Morel $1.2 million, $150,000 for each of the eight photographs that were infringed, which is the maximum amount of statutory damages available under 17 U.S.C. § 504(c)(2). The jury also determined that AFP and Getty had violated the DMCA a total of 16 times under 17 U.S.C. §§ 1202(a) and 1202(b), and awarded Morel $20,000 in total for the 16 violations; however, that DMCA award is under dispute because the DMCA's statutory damages provisions provide for a minimum award of $2,500 per violation. Morel's attorneys thus argued in a letter to the court in early December 2013 that the minimum DMCA statutory award for Morel must be $40,000.

The landmark decision is one of the first cases to address the commercial use of content posted by individuals through social media, but it certainly won't be the last. A copy of the January 14, 2013 decision is available here: http://www.scribd.com/doc/120501947/AFP-v-Morel-10-Civ-02730-AJN-S-D-N-Y-Jan-14-2013.

February 3, 2014

Swatch Your Back -- Copyrighted Corporate Earnings Calls Are Fair Game

By Barry Werbin and Sharon O'Shaughnessy
Herrick, Feinstein LLP

In The Swatch Group Management Services Ltd. v. Bloomberg L.P., 12-2412-cv (2d Cir. Jan. 27, 2014), a Second Circuit panel unanimously decided that Bloomberg L.P. (Bloomberg), the prominent financial news and data reporting service, did not infringe on The Swatch Group Management Services Ltd's (Swatch) copyright in an invitation-only recorded Swatch earnings call, by obtaining a copy of the recording without authorization and making it available to Bloomberg's paying subscribers. Despite the failure of Bloomberg to manifestly transform the recording in any way before publication, the Second Circuit nonetheless held that Bloomberg's use of the recording qualified as fair use under Section 107 of the Copyright Act. The court emphasized that American investors and analysts are entitled to receive newsworthy financial information and that Bloomberg's conduct is protected by the First Amendment.

On February 8, 2011, Swatch released its 2010 earnings report, which was subsequently made available to the public. Swatch then convened an earnings call with 132 analysts, who were informed that they were expressly prohibited from recording the call for publication or broadcast. Bloomberg, while not invited to the call, obtained a sound recording and written transcript of the call and made both available online, without alteration, to its subscribers. Swatch then sued for copyright infringement. In an opinion and order entered on May 17, 2012, Southern District Judge Alvin Hellerstein sua sponte granted summary judgment to Bloomberg, finding that Bloomberg's copying and dissemination of the recording qualified as fair use.

On appeal, the Second Circuit engaged in its own analysis of the fair use factors under 17 U.S.C. § 107 and affirmed the district court's grant of summary judgment in favor of Bloomberg, concluding that "the copyright law's goal of promoting the Progress of Science and useful Arts would be better served by allowing [Bloomberg's] use than by preventing it."

Turning to the first statutory fair use factor, "purpose and character of use," the court held that, although Bloomberg obtained the recording without authorization and put it to commercial use without transforming it, Bloomberg's use served an important public purpose of ensuring the wide dissemination of important financial information.

The court emphasized that "Bloomberg's overriding purpose here was not to 'scoop[]' Swatch or 'supplant the copyright holder's commercially valuable right of first publication," but rather simply to deliver newsworthy financial information to American investors and analysts. That kind of activity, whose protection lies at the core of the First Amendment, would be crippled if the news media and similar organizations were limited to authorized sources of information."

Moreover, after stressing that "transformative use" is not absolutely necessary for a finding of fair use, the court held that, in the context of news reporting and analogous activities, "the need to convey information to the public accurately may in some instances make it desirable and consonant with copyright law for a defendant to faithfully reproduce an original work rather than transform it."

With respect to the second statutory fair use factor, "the nature of the copyrighted work," the court determined that the balance tipped decidedly in Bloomberg's favor because, while the recording had not been "published" by Swatch as that term is applied under the Copyright Act, Swatch itself publicly disseminated the spoken performance embodied in the recording before Bloomberg's use and the earnings call was factual in nature. As the court noted, "the scope of fair use is greater with respect to factual than non-factual works."

Next, while the court declined to weigh the third "substantiality" factor in either party's favor, it did find that Bloomberg's use of the entire recording was nonetheless reasonable "in light of its purposes of disseminating important financial information to American investors and analysts."

Lastly, the court determined that the fourth statutory factor, "the effect of the use upon the potential market for or value of the copyrighted work," weighed in favor of fair use because Second Circuit case law limits the court's consideration to a use's "impact on potential licensing revenues for traditional, reasonable, or likely to be developed markets" and the possibility of receiving licensing royalties in no way factored into the creation of the earnings call. Furthermore, the court highlighted that the "value" of the copyrighted expression for Swatch rested in its capacity to convey important information about the company to interested investment analysts and that Bloomberg, "[b]y making the recording available to analysts who did not or could not participate in the call initially... simply widened the audience of that call, which is consistent with Swatch Group's initial purpose."

This decision continues what many see as a trend in the Second Circuit to expand the contours of the fair use doctrine. Interestingly, this is only the sixth time the Second Circuit has addressed the fair use doctrine in the past decade in a reported decision.

A copy of the Second Circuit decision is available here: http://caselaw.findlaw.com/us-2nd-circuit/1655777.html.

February 28, 2014

Utah District Court Issues First Preliminary Injunction Against Aereo

By Barry Werbin

In a marked turn of events for Aereo, the disruptive provider of dime-size antennae over-the-air rebroadcast services, on February 19, 2014, the Utah federal District Court (Judge Dale Kimball) became the first court to issue a preliminary injunction against Aereo, finding that it infringed the plaintiff broadcasters' public performance copyrights in the transmissions of their broadcasts under the Copyright Act's Transmit Clause. The court barred Aereo from operating within the Tenth Circuit, which covers the states of Utah, Colorado, Montana, New Mexico, Oklahoma and Wyoming. The case, which consolidates two separately filed actions in Utah by different sets of broadcasters, is Community Television Of Utah, LLC v. Aereo, Inc., No. 2:13CV910DAK. A copy of the decision can be accessed here: Aereo Utah.pdf.

Aereo was sued in the Utah cases after being victorious before the Second Circuit (albeit with a strong dissent from Judge Denny Chin) in WNET v. Aereo, Inc., 712 F.3d 676 (2d Cir. 2013), cert. granted sub nom ABC, Inc., et al, v. Aereo, Inc., Sup. Ct. (Jan. 10, 2014). The Supreme Court will hear argument on April 22nd and a decision is expected by June. Aereo also won before the District Court of Massachusetts in Hearst Stations Inc. v. Aereo, Inc., 2013 WL 5604284 (D. Mass. Oct. 8, 2013), which is on appeal to the First Circuit.

On the other hand, another Aereo-type tiny antenna service, FilmOnX (formerly Aereokiller), had a resounding defeat in the Central District of California, in a case now sub judice before the Ninth Circuit, where FilmOnX is presently subject to a preliminary injunction. FOX Television Stations, Inc. v. BarryDriller Content Systems PLC, 915 F.Supp. 2d 1138 (C.D. Cal. 2012), appeal pending. FilmOn also lost in the District of Columbia, where the court issued a nationwide preliminary injunction, excluding the Second Circuit. Fox Television Stations, Inc. v. FilmOn X LLC, 2013 U.S. Dist. LEXIS 126543 (D.D.C. Sept. 5, 2013).

In all these cases, including the new Utah decision, the core issue is whether these types of retransmission services violate the Transmit Clause under Section 101 of the Copyright Act, which defines a "public performance" -- one of the exclusive rights reserved to a copyright owner -- as the right "to transmit or otherwise communicate a performance or display of the work to a [public place] or to the public, by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times."

The Utah court characterized Aereo's retransmissions of over-the-air broadcasts as being "indistinguishable [to] a cable company" and that its services fall "squarely within the language of the Transmit Clause." The court examined the holdings of all these prior decisions, but because there is no existing Tenth Circuit law on the issue, it conducted its own analysis. In doing so, it concluded that "California and D.C. district court cases as well as Judge Chin's dissent in the Second Circuit case are the better reasoned and more persuasive decisions with respect to the proper construction of the Transmit Clause and its application to Aereo's operations."

In particular, the court examined the "plain language" of the Transmit Clause and the applicable definitions in the Copyright Act, and concluded that such "definitions in the Act contain sweepingly broad language and the Transmit Clause easily encompasses Aereo's process of transmitting copyright-protected material to its paying customers. Aereo uses 'any device or process' to transmit a performance or display of Plaintiff's copyrighted programs to Aereo's paid subscribers, all of whom are members of the public, who receive it in the same place or separate places and at the same time or separate times."

The court further examined the legislative history behind the Transmit Clause. In particular, it cited to Congress' intent in the 1976 Act to expressly overrule prior Supreme Court decisions, which had validated community antenna television systems (precursors to modern cable systems) under the 1909 Copyright Act and to "bring a cable television system's transmission of broadcast television programming within the scope of the public performance right."

Aereo relied on the Second Circuit's opinion and that decision's reliance, in turn, on the Second Circuit's earlier opinion in the Cablevision case, Cartoon Network LP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008), which had upheld a remote DVR system made available to end-users who already subscribed to Cablevision's services (and where Cablevision was otherwise paying legally required retransmission fees to broadcasters). The Utah court, however, said "the Second Circuit [in Cablevision] proceeded to spin the language of the Transmit Clause, the legislative history, and prior case law into a complicated web" by focusing "on discerning who is 'capable of receiving' the performance to determine whether a performance is transmitted to the public." Judge Kimball noted that "such a focus is not supported by the language of the statute. The clause states clearly that it applies to any performance made available to the public," regardless of whether such performance was public or private, and "encompass all known or yet to be developed technologies." Judge Kimball also faulted the Second Circuit in Cablevision for effectively changing the wording of the Transmit Clause from "members of the public capable of receiving the performance" to "members of the public capable of receiving the transmission."

In assessing the legislative history, Judge Kimball also quoted freely from Judge Chin's dissent in the Second Circuit's decision, and concluded that "[b]ased on the plain language of the 1976 Copyright Act and the clear intent of Congress, this court concludes that Aereo is engaging in copyright infringement of Plaintiffs' programs. Despite its attempt to design a device or process outside the scope of the 1976 Copyright Act, Aereo's device or process transmits Plaintiffs' copyrighted programs to the public."

Despite a dispute as to whether any financial harm would befall the plaintiffs during the pendency of the action, the court held that preliminary injunctive relief was nevertheless warranted because, from the perspective of irreparable harm, "if Aereo were permitted to continue to infringe Plaintiffs' copyrights... Aereo's infringement will interfere with Plaintiffs' relationships and negotiations with legitimate licensees, impede and effect Plaintiff's negotiations with advertisers, unfairly siphon viewers from Plaintiffs' own websites, threaten Plaintiffs' goodwill and contractual relationships with Plaintiffs' licensed internet distributors, lose their position in the competitive marketplace for Internet content, and cause Plaintiffs to lose control of quality and potential piracy of its programming."

With respect to the balance of harm element, because the court limited the preliminary injunction only to the Tenth Circuit, "the harm to Aereo's business is limited only to its ability to expand into the geographic area of the Tenth Circuit. The harm to Aereo's business, therefore, will not put Aereo out of business, it merely impacts its expansion."

Finally, the court found its ruling was consistent with the public interest because "[t]he public has an interest in continuing to receive unique, local programming provided by the Plaintiffs. Original local programming, covering local news, sports, and other areas of interest, costs millions of dollars to produce and deliver to the public and the public interest plainly lies in enjoining copyright infringement that threatens the continued viability of such local programming."

Post-script: Aereo promptly moved to stay enforcement of the injunction pending its appeal to the Tenth Circuit, particularly in light of the pending Supreme Court proceeding. In a February 25th order, the court denied Aereo's motion to stay entry of the preliminary injunction but granted a 14-day temporary stay pending the Tenth Circuit's ruling on an emergency motion to stay.

More to come!

March 20, 2014

2-4-6-8 Varsity Cannot Copyright

By Barry Werbin and Bryan Meltzer
Herrick, Feinstein LLP

Whether colors and designs placed on useful or functional objects are protected under the Copyright Act is one of the more troublesome issues in copyright law. Tackling this legal fine line, the Western District of Tennessee recently found that cheerleading uniforms featuring geometric, color and other design elements are not copyrightable. Varsity Brands, Inc. (Varsity) is one of the largest designers and manufacturers of cheerleading and dance uniforms. In Varsity Brands, Inc., et al. v. Star Athletica, LLC, 10 Civ. 2508 (W.D. Tenn. March 1, 2014), Judge Cleland found that the designs and colors placed on cheerleading uniforms produced and designed by Varsity, which Varsity alleged were infringed by Star Athletica, LLC (Star), could not be conceptually or physically separated from the cheerleading uniforms themselves because such designs and colors were at the core of "cheerleading-uniform-ness." As a result, Judge Cleland held that even though Varsity held copyright registrations for the designs at issue, it could not maintain its claims against Star for copyright infringement.

As Judge Cleland recognized, "[c]lothing possesses both utilitarian and aesthetic value." If a design "'can be identified separately from, and is capable of existing independently of, the utilitarian aspects'" of the clothing, the design may be copyrightable. But when the design is not separable from its utilitarian function, it will not be copyrightable. Noting that there is "considerable disagreement regarding the proper standard to apply when considering whether the elements of protectable [pictorial, graphic and sculptural works] are separable from their utilitarian function," Judge Cleland based his analysis on two key clauses found in 17 U.S.C. §101: first, "whether the court can conceive of the allegedly copyrightable features as separate from the utilitarian article" (i.e., conceptual separability), and second, whether the design can "exist independently of the utilitarian article" (i.e., physical separability).

With respect to conceptual separability, Judge Cleland found that the uniform designs, which included combinations of braids, chevrons and stripes, did not "invoke any concept other than that of clothing," especially since the copyrighted design sketches depicted the designs on the uniforms worn by cheerleaders. In other words, "a cheerleading uniform is 'a garment specifically meant to cover the body in an attractive way for a special occasion" and "[t]he artistic judgment that is exercised applying stripes, patters, and chevrons, 'does not invoke in the viewer a concept other than that of clothing.'" Id. The court noted in particular that without the colors and designs, a cheerleading uniform ceases to be recognized as a cheerleading uniform, and that the designs actually made the garments into utilitarian uniforms. Accordingly, Judge Cleland found that the designs of the cheerleading uniforms merged with their utilitarian function.

Turning to physical separability, Judge Cleland similarly found that "removing the lines, patterns, and chevrons from the [cheerleading uniforms] and placing them on a different canvas [did] not remove their association as cheerleading uniforms" since the "fabric evokes the image and concept of a cheerleading uniform." In other words, the designs could not exist independently of the uniforms.

Since he found that the designs were not conceptually or physically separable from the utilitarian aspect of the uniforms, Judge Cleland held that the designs were not copyrightable and granted Star's motion for summary judgment, dismissing Varsity's claims.

Judge Cleland's decision is significant because it shows that even copyrighted designs will not be protected if the designs are not "separable" from their functions. Yet how to assess such "separability" remains a challenge for courts. For example, if school logos and other designs were used not only on cheerleader uniforms, but also on school signage, pennants and the like, those designs could be viewed as "separable" as they would not be limited to use on cheerleader uniforms to define such garments as utilitarian uniforms.

The decision will surely upset fashion designers and the entire uniform industry, which may be left with scant copyright protections, and may be troublesome to some copyright practitioners as well.

The decision:Varsity cheerleader decision.pdf

April 4, 2014

Teller v Dogge

By Barry Werbin

The Teller (from Penn & Teller) case that raised the question of copyrightability of one of Teller's classic illusion acts (called "Shadows") as pantomime or a dramatic work, was decided March 20, 2014, by the District of Nevada, which held that such a performance qualified as a protectible dramatic work for copyright purposes.

"Shadows" had been registered as a dramatic work with the Copyright Office in 1983. The court viewed Teller's performance not just as an uncopyrightable magic act, as the defendant had urged, but as a performance akin to a pantomime or other dramatic work that the Copyright Act expressly protects, as also evidenced by the registration. The defendant had essentially copied Teller's entire performance by creating two YouTube videos "offering to sell the secret to one of Teller's signature illusions." As the court emphasized: "The mere fact that a dramatic work or pantomime includes a magic trick, or even that a particular illusion is its central feature does not render it devoid of copyright protection." The court also noted that "Teller's certificate of registration describes the action of 'Shadows' with meticulous detail, appearing as a series of stage directions acted out by a single performer."

Funny side bit is Teller only uses "Teller" as his full name - see the caption:
telle591.pdf

April 16, 2014

Psihoyos v. Wiley: Second Circuit Joins Other Circuits in Holding that Discovery Rule Applies to Statute of Limitations in Copyright Infringement Claims

By Barry Werbin and Laura Tam, Herrick, Feinstein LLP

On April 4th, in Psihoyos v. John Wiley & Sons, Inc., the Second Circuit joined almost every other federal Courts of Appeals in holding that the discovery rule applies to the statutory three-year statute of limitations in copyright infringement claims. The case began in March 2011, when photographer Louis Psihoyos (Psihoyos) sued publisher John Wiley & Sons, Inc. (Wiley) for copyright infringement. Wiley had published eight of Psihoyos's unlicensed photographs in various textbooks from 2005 to 2009 and, in 2010, Wiley sought a retroactive licensing arrangement with Psihoyos, prompting Psihoyos to sue. After discovery was complete, Wiley moved for summary judgment, arguing that (1) the Copyright Act's statute of limitations barred Psihoyos' infringement claims since the infringements occurred more than three years prior to suit, and (2) Psihoyos had failed to register three of the photographs at issue with the Copyright Office prior to filing suit. More than a week after Wiley moved for summary judgment, Psihoyos submitted applications for copyright registration of the three photographs.

The district court rejected Wiley's first argument regarding the statute of limitations, holding that copyright infringement claims accrue upon actual or constructive discovery of infringement. Since Psihoyos did not discover Wiley's infringement until 2010 and filed suit shortly thereafter, the court determined that Psihoyos' claim was timely. With respect to Wiley's second argument, the district court held that pending copyright registration applications did not satisfy the Copyright Act's registration requirement under 17 U.S.C. § 411(a). Accordingly, the court granted partial summary judgment in Wiley's favor, leaving four of Psihoyos's infringement claims for trial. At trial, the jury found no infringement for one photo, awarded $750 in damages for non-willful infringement of one photo, and found willful infringement of the remaining two photos, resulting in an award of $300,000 and $100,000 in damages, respectively. Wiley moved for remittitur or, alternatively, for a new trial, but the district court denied the motion. Wiley then appealed the district court's partial denial of summary judgment and the denial of its motion for remittitur or a new trial, and Psihoyos cross-appealed the district court's partial grant of summary judgment in favor of Wiley on the photographs with pending copyright registration applications.

The Second Circuit affirmed the district court's decision that "an infringement claim does not 'accrue' until the copyright holder discovers, or with due diligence should have discovered, the infringement." In rejecting Wiley's argument that there should be "different accrual rules for ownership and infringement claims, both of which are governed by 17 U.S.C. §507(b)," the Court noted that "[i]n doing so, we join every Circuit to have considered the issue of claim accrual in the context of infringement claims," citing decisions from the First, Third, Fourth, Sixth, Seventh, Eighth, Ninth, and Tenth Circuits. The discovery rule conformed with Congress's intent and the text and structure of the Copyright Act, as well as policy considerations. Accordingly, the Court held that the Copyright Act's statute of limitations did not bar Psihoyos's claims of copyright infringement.

With respect to the Copyright Act's registration requirement, the Second Circuit acknowledged that the Courts of Appeal were divided as to whether a pending application satisfied Section 411(a)'s requirement of copyright registration as a prerequisite for litigation. Nonetheless, the Court determined that "[w]e need not resolve the dispute or otherwise embroil ourselves in this circuit split because . . . Psihoyos had not even filed the applications for registration of the relevant works prior to instituting the action claiming infringement of the copyright in these works, as required by the plain terms of the statute." Since Psihoyos did not apply for copyright registration until after the completion of discovery and Wiley's motion for summary judgment, "he failed to satisfy the preconditions to suit under § 411(a)."

Finally, in reviewing the district court's denial of Wiley's motion for remittitur or a new trial, the Second Circuit held that the district court did not err in denying Wiley's motion and did not abuse its discretion in refusing to alter the jury's award of statutory damages. Although Wiley argued that the district court erred in failing to consider whether the award of statutory damages was reasonably related to Psihoyos's actual loss, the Second Circuit soundly rejected this argument, nothing that "[a]lthough revenue lost is one factor to consider, we have not held that there must a direct correlation between statutory damages and actual damages." The Second Circuit recognized that the jury may have considered other relevant factors to determine the damages award, including evidence of Wiley's willfulness, the substantial profits it earned, and the need for deterrence.

With this significant decision, the Second Circuit now joins most other Circuits in applying a discovery rule to the three-year statute of limitations for copyright infringement actions.

April 22, 2014

Capital Records v. Harrison

By Barry Werbin

A very interesting opinion (Capital Records v. Harrison.pdf) was issued by NY Supreme Court Judge Shirley Kornreich on April 14th. The decision addresses the proper statute of limitations under the CPLR for copyright infringements of pre-1972 sound recordings. Judge Kornreich sets up a possible split among the very few judges who have ruled on the issue in NY, as to whether it should be three years as under the federal Copyright Act, analogizing infringement to a tort or injury to property type claim, or the six-year residual limitations period for causes of action for which there is no specific statute of limitations. A case to be followed unless it settles.


May 20, 2014

Supreme Court Ensures Copyright Suit against MGM "Rages" On

By Barry Werbin and Sharon O'Shaughnessy
Herrick, Feinstein LLP

In Petrella v. Metro-Goldwyn-Mayer, Inc., the Supreme Court delivered a TKO to MGM when it decided, in a 6-3 decision on May 19, 2014, that the equitable defense of laches cannot be invoked as a defense to preclude claims brought within the Copyright Act's three-year statute of limitations for successive acts of copyright infringement. As a result, screenwriter Paula Petrella (Petrella) may continue to pursue more than $1 million in damages for MGM's continued distribution of the classic film Raging Bull. The decision likely sounds the death knell for laches as an affirmative defense in copyright infringement litigation and has the potential to expose Hollywood studios, music labels and media companies to an onslaught of cases brought by copyright holders' heirs and estates seeking a share of profits from classic films, TV shows, music recordings and other creative works that are re-released in various formats.

By way of background, Frank Petrella collaborated with renowned boxer Jake LaMotta on a screenplay about LaMotta's life, which inspired the Oscar-winning film Raging Bull. The screenplay was copyrighted in 1963. In 1976, Frank Petrella and LaMotta assigned their rights and renewal rights, which were later acquired by United Artists, then a subsidiary of MGM. In 1980, MGM released Raging Bull and registered a copyright in the film. MGM continued to market the film, including converting it into DVD and Blu-ray formats, which did not exist in 1980.

Frank Petrella died in 1981, during the initial copyright term, thereby vesting the copyright in the screenplay with his daughter, Paula, who renewed the copyright in 1991, thus becoming its sole owner. For works copyrighted under the 1909 Copyright Act (pre-1978), the Supreme Court had previously confirmed in Stewart v. Abend, 495 U.S. 207, 221 (1990) that when an author who has assigned her rights away "dies before the renewal period, . . . the assignee may continue to use the original work only if the author's successor transfers the renewal rights to the assignee."

In 1998, Petrella's counsel advised MGM that its exploitation of Raging Bull violated her copyright and threatened suit, repeating such threats over the next two years. Petrella, however, did not actually file suit until January 6, 2009, when she filed claims against MGM seeking (i) monetary damages due to acts of infringement resulting from MGM's continuing commercial use of the film (as a derivative work of the screenplay) after January 6, 2006 (including its continual release of the film on DVD and other digital formats); and (ii) injunctive relief prohibiting further distribution of the work without compensation.

Under Section 505(b) of the Copyright Act, copyright plaintiffs have three years to bring suit from the accrual date of a claim. However, if acts of infringement are repeated anew, the statute of limitations operates on a "rolling" basis that allows a plaintiff to collect damages going back three years before the claim accrues. In barring Petrella's action, however, the district court and the Ninth Circuit disregarded the Copyright Act's three-year look-back period for statute of limitations purposes and, instead, held that the equitable defense of laches precluded Petrella from bringing suit because she had unreasonably delayed suit by not filing until 2009. The Ninth Circuit affirmed and agreed with the studio's argument that Petrella's 18-year delay was unreasonable in light of Petrella having been aware of her potential claims many years earlier. The Supreme Court then granted certiorari to resolve a Circuit split concerning the application of laches to infringement claims brought within the three-year statute of limitations under the Act.

MGM argued that delayed copyright lawsuits could impact studios' investments made towards the distribution of works and also pointed to the challenges of trying a case on a delayed basis, such as difficulty in obtaining records and the fact that, as here, key witnesses may be deceased. The Court, however, was unpersuaded. Justice Ruth Bader Ginsburg, writing for the majority, held that the Copyright Act's bar on lawsuits initiated more than three years after a claim accrued did not bar Petrella's lawsuit because, in this instance, there was ongoing copyright infringement and Petrella only sought damages for the three years preceding the filing of her lawsuit. The Court explained that the concept of laches originally served as a guide when no statute of limitations controlled, but could not be invoked as a rule for interpreting a statutory prescription established by Congress. Put simply, laches does not trump the statute of limitations protections that the Copyright Act provides for copyright owners whose works are infringed on an ongoing basis, so long as the owners only seek relief for acts of infringement occurring during the limitations period.

In addressing MGM's claim that an open-ended period to file copyright claims makes it difficult for companies to make future business decisions, Justice Ginsburg emphasized that the "'sue soon or forever hold your peace' approach" advocated by MGM is imprudent because it would force copyright owners to initiate infringement litigation at a time when the value of the copyrighted work was not being undercut or there was no detrimental effect on the original work. Instead, Justice Ginsburg explained that the three-year limitations period "allows a copyright owner to defer suit until she can estimate whether litigation is worth the candle. She will miss out on damages for periods prior to the three-year look-back, but her right to prospective injunctive relief should, in most cases, remain unaltered." The Court observed that allowing Petrella's lawsuit to go forward would put at risk "only a fraction" of the income that MGM earned during that three-year period and would work no unjust hardship on consumers who have purchased copies of Raging Bull. To the extent key witnesses no longer are available, the Court noted that the plaintiffs would be affected equally because they have the burden of proving infringement.

Another equitable "out" was provided, however, by the Court's observation that where a copyright owner intentionally engages in misleading representations concerning his or her abstention from suit, and an alleged infringer detrimentally relies on such deception and would be harmed, reasonable reliance on such copyright owner's past actions could give rise to an estoppel defense. Unlike laches, estoppel does not undermine the Copyright Act's statute of limitations because it rests on misleading acts or omissions. Perhaps anticipating this issue being raised on remand, Justice Ginsburg noted that "Petrella notified MGM of her copyright claims before MGM invested millions of dollars in creating a new edition of Raging Bull" and that "[t]he circumstances here may or may not (we need not decide) warrant limiting relief at the remedial stage."

The decision only addresses the narrow, procedural issue of whether the Copyright Act's statute of limitations for ongoing infringement precludes the assertion of laches. On remand, Petrella must prove her case on the merits. While Petrella is now able to seek damages back to 2006, Justice Ginsburg indicated that laches may come back into play before the district court, where Petrella's delay in commencing action may properly be taken into account at the remedial stage in determining damages and the scope of any appropriate injunctive relief.

Lastly, all is not lost for a company that must defend against a "delayed" claim of continuing copyright infringement. Laches may still play into the remedial stage of an action. and, as the Court pointed out, a defendant may retain any "investment shown to be attributable to its own enterprise, as distinct from the value created by the infringed work."

In a dissenting opinion joined by Chief Justice Roberts and Justice Kennedy, Justice Breyer argued that the majority's opinion undercut basic principles of fairness and could encourage the type of gamesmanship resulting from a claimant sitting back for years until the economics of the exploitation of a copyrighted work make the timing of suit more valuable.

The decision can be accessed here: http://www.supremecourt.gov/opinions/13pdf/12-1315_ook3.pdf

June 13, 2014

HathiTrust Racks Up Fair Use Victory But Heads Back to the Stacks on Preservation Copies

By Barry Werbin and Bryan Meltzer, Herrick, Feinstein LLP

In a much-awaited decision, the Second Circuit held on June 10, 2014, that university libraries are permitted to electronically scan their copyrighted books to (i) create a full-text searchable database, and (ii) provide print-disabled people with access to the copyrighted works. In Authors Guild, Inc. v. HathiTrust, the Court found such uses by the HathiTrust Digital Library (HDL), set up by the HathiTrust -- an organization comprised of colleges, universities and other nonprofit organizations that contributed their book collections to create a massive digital database of over 10 million works -- were protected by the copyright fair use doctrine. The Court remanded on the issue of whether HathiTrust's "preservation" copies were protected as fair use.

As a threshold matter, the Court found that the U.S. association and union plaintiffs lacked standing under §501 of the Copyright Act to bring copyright claims on behalf of their member authors. That section prohibits a copyright holder from choosing a third party to bring suit on his or her behalf. On the other hand, the Court found that the foreign association and union plaintiffs had standing to bring suit on behalf of their members because foreign laws provided them with exclusive rights to enforce the copyrights of their foreign members.

The Court then proceeded to apply the fair use doctrine to the plaintiffs' claims. The Court noted that the Copyright Act "'is designed [] to stimulate activity and progress in the arts for the intellectual enrichment of the public.'" Based on this intention, the fair use doctrine "allows the public to draw upon copyrighted materials without the permission of the copyright holder in certain circumstances."

In assessing a fair use defense under §107 of the Copyright Act, courts are required to consider the following four nonexclusive factors: (1) the purpose and character of the use (e.g., for a commercial or educational purpose); (2) the nature of the copyrighted work; (3) the amount of the copyrighted 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. With respect to the first factor, it has become de rigueur for courts to assess whether the purpose of an allegedly infringing use is "transformative" or not, that is, "whether the work 'adds something new, with a further purpose or different character, altering the first with new expression, meaning or message...'" (Quoting Campbell v. Acuff‐Rose Music, Inc., 510 U.S. 569, 579 (1994).)

As for the HDL's full-text searchable database, the Court found that such use is protected by the fair use doctrine because (i) it constitutes a "transformative" use that adds something new "with a different purpose and a different character" from the copyrighted material (emphasizing, however, that contrary to the District Court's opinion, "a use does not become transformative by making an 'invaluable contribution to the progress of science and cultivation of the arts...." but by serving "a new and different function from the original work"); (ii) while there is no dispute the plaintiffs' works are protected by copyright, the second factor is of "'limited usefulness where,' as here, 'the creative work . . . is being used for a transformative purpose,'" (citing to the Court's own opinions in Cariou v. Prince and Bill Graham Archives v. Dorling Kindersley Ltd.); (iii) the extent of the libraries' copying of the copyrighted material is not excessive and is reasonably necessary to enable the full-text search function (which by its nature required copying of the entire texts of the books); and (iv) because the full-text search does not serve as a "substitute" for the books being searched, the plaintiffs will not suffer any non-speculative harm (the Court emphasizing that the only type of economic injury to be considered under the fourth fair use factor is that which results from the secondary use serving "as a substitute for the original work"). Based on these findings, the Court held that while the works were the type that would otherwise be protected by the Copyright Act, the full-text searchable database constituted a fair use of the works.

Of particular interest is the Court's observation that its finding of a transformative use here was even more compelling than the transformative uses the Court had approved in Cariou and Bill Graham Archives because "full‐text search adds a great deal more to the copyrighted works" (a likely portent of how the Court will soon rule in the pending Google Books appeal).

Of great concern to the plaintiff author groups under the fourth factor was an alleged security risk posed by the existence of the HDL that "might impose irreparable damage on the Authors and their works" if, hypothetically, "hackers were able to obtain unauthorized access to the books stored at the HDL" and then freely disseminate globally those digital copies, thereby decimating the traditional market for those works. However the Court rejected this theory, finding that the record on appeal documented "the extensive security measures the Libraries have undertaken to safeguard against the risk of a data breach."

Similarly, the Court also found that providing access to the blind and print-disabled is a fair use of the copyrighted material. While the Court found that such use is not "transformative" (as was the full-text searchable database) and appears to create "derivative works over which the author ordinarily maintains control," it found that "transformative" use is not "absolutely necessary" for a finding of fair use. In particular, the legislature and Supreme Court have both stated that making copyrighted materials accessible for the use of blind people is protected by the fair use doctrine. The Court further found that in the "unique circumstances presented by print‐disabled readers," (i) the extent of the libraries' retention of the works is reasonable, and (ii) that the market for books accessible to the handicapped is so insignificant that the value of the copyrighted material would not suffer. Accordingly, the Court held that "the doctrine of fair use allows the Libraries to provide full digital access to copyrighted works to their print-disabled patrons."

The Court also considered whether the HDL could preserve digital copies of the scanned books and permit its member libraries to replace their copies if (i) the member already owned an original,(ii) the member's original copy was lost, destroyed or stolen, and (iii) a replacement copy was not available at a fair price. The Court found that this issue was not ripe for its determination primarily because the district court record had not established whether any of the plaintiffs' copyrighted materials were irreplaceable at a fair price and, "thus, would be potentially subject to being copied by the Libraries in case of the loss or destruction of an original." If the plaintiffs' works could be replaced at a fair price, then the works would not be replaced by the HDL. Accordingly, the Court held this claim did not "present a live controversy for adjudication," vacated the district court's judgment "insofar as it adjudicated this issue without first considering whether plaintiffs have standing to challenge the preservation use of the HDL", and remanded for the district court to make that determination.

Finally, the Court held that the plaintiffs' claims against defendant the University of Michigan regarding its project known as the "Orphan Works Project" or "OWP" was not ripe for adjudication, because the program had been suspended after the case commenced, and it was unclear whether the University would reinstitute the OWP in a manner that would infringe the plaintiffs' copyrights and cause them harm.

The trajectory of the Second Circuit's application of the "transformative" use doctrine continues its climb in HathiTrust, following on the heels of the Courts' expansive application of fair use in Cariou v. Prince. With the Google Books case coming up next, and other Circuits having already adopted the transformative use test, the copyright bar is readying itself for transformative use as the fair use paradigm of the 21st century, particularly as digital technologies continue to push the envelope of an aging Copyright Act.

June 26, 2014

MA Senate Passes Post-Mortem Right of Publicity Bill

By Barry Werbin

The Massachusetts Senate has passed a bill (S. 2022) that approves a post-mortem right of publicity for Massachusetts residents. The bill would apply to a person's name, likeness and character if it has commercial value, and extend protection for 70 years after the celebrity's death. Such rights would pass to the person's heirs or an entity that was representing the individual. The bill was supported by actor Bill Cosby, who is a resident of Massachusetts. It still must be approved by the Massachusetts House.

The text of the bill is available here: https://malegislature.gov/Bills/188/Senate/S2022.

Case Solved: Conan Doyle Estate Loses Copyright Dispute Over Sherlock Holmes

By Barry Werbin and Laura Tam, Herrick, Feinstein LLP

It didn't take much deducing for the Court of Appeals for the Seventh Circuit to rule on June 16th that Sherlock Holmes and Dr. Watson, the famous character sleuths created by Sir Arthur Conan Doyle in the early 19th century, are in the public domain and free for public use. The resolution of this closely-watched copyright dispute has significant implications for the creation of future works featuring the Holmes and Watson characters because most aspects of these characters, according to the Seventh Circuit, are now "fair game."

As the Seventh Circuit pointed out, Arthur Conan Doyle published 56 stories and four novels about Sherlock Holmes. The first story was published in 1887 and the last 10 stories were published between 1923 and 1927. Due to the 1998 Copyright Term Extension Act, the American copyrights on the final 10 stories will expire between 2018-2022, 95 years after the respective dates of first publication. The copyrights on the other 46 stories and the four novels, however, previously expired and are in the public domain.

The case began when the Conan Doyle Estate (the Estate) threatened to prevent the distribution of Leslie S. Klinger's proposed compilation of modern stories depicting Sherlock Holmes and Dr. Watson. Klinger had previously co-edited an anthology of such stories entitled A Study in Sherlock: Stories Inspired by the Sherlock Holmes Canon, which was published by Random House in 2011. After the Estate told Random House that it would have to pay $5,000 for a copyright license, Random House paid the license and published the book. In 2012, Klinger decided to publish a sequel to A Study in Sherlock to be called In the Company of Sherlock Holmes and entered into negotiations with Pegasus Books and W.W. Norton & Company. After the Estate threatened to prevent the distribution of the anthology and sue for copyright infringement, Pegasus refused to publish the book until Klinger obtained a license from the Estate.

Instead of obtaining the license, Klinger sued the Estate, seeking declaratory judgment that he is free to use the material from the Sherlock Holmes stories and novels that are no longer under copyright. After the Estate defaulted by failing to appear or respond to Klinger's complaint, the district court gave Klinger leave to file a motion for summary judgment. After Klinger filed his motion, the Estate responded with two main arguments. First, the Estate argued that the district court did not have subject matter jurisdiction, because there was no actual case or controversy between the parties. Second, the Estate argued that even if the court had jurisdiction, the Estate was entitled to judgment on the merits because the copyright of fictional characters, such as Sherlock Holmes or Dr. Watson, whose complexity is not fully developed until a later story, remains under copyright until the expiration of the later story's copyright. The district court granted Klinger's motion for summary judgment, and the Estate appealed to the Seventh Circuit.

First, the Seventh Circuit rejected the Estate's argument that the district court did not have jurisdiction. The Court held that the Estate's threats "to block the distribution of the book by major retailers and to sue for copyright infringement" created an actual controversy that justified the declaratory judgment action. Second, the Court determined that there was no basis for extending a copyright beyond its expiration and that "[w]hen a story falls into the public domain, story elements -- including characters covered by the expired copyright -- become fair game for follow-on authors." (Citing for support the Second Circuit's decision in Silverman v. CBS Inc., 870 F.2d 40, 49 -51(2d Cir. 1989), which involved the fictional characters Amos and Andy).

Although the Estate attempted to draw a distinction between "flat" and "round" fictional characters, arguing that Holmes and Watson did not become fully "rounded" until the last story that Doyle published, the Court stated that it did not "see how that can justify extending the expired copyright on the flatter character." Thus, while the characters of Holmes and Watson were copyrightable, the Court determined that any subsequent features that were added to the characters (for example, that Holmes has grown to like dogs or that Watson has been married twice) did not revive the expired copyrights on the original characters. The Court emphasized that "[t]he copyrights on the derivative works, corresponding to the copyrights on the ten last Sherlock Holmes stories, were not extended by virtue of the incremental additions of originality in the derivative works."

As the Seventh Circuit noted, "[E]xtending copyright protection is a two-edged sword from the standpoint of inducing creativity, as it would reduce the incentive of subsequent authors to create derivative works . . . by shrinking the public domain." The Court seemed particularly concerned about the "spectre of perpetual, or at least nearly perpetual, copyright" and that the Estate was attempting to curtail creativity by "extending the copyright protection of literary characters to . . . extraordinary lengths." Indeed, the Court succinctly rejected the Estate's argument that allowing Holmes and Watson to enter the public domain would disincentivize authors from improving and perfecting their works. As the Court noted, "[O]ther artists will have a greater incentive to improve it, or to create other works inspired by it, because they won't have to pay a license fee to do so provided that the copyright on the original work has expired."

While the Seventh Circuit's decision means that the Estate's heyday of collecting significant copyright license fees and royalties is largely over, it also ensures that artists and authors like Klinger will not be pressured into paying license fees for character rights that have entered the public domain.

A copy of the Seventh Circuit's decision is available here: http://media.ca7.uscourts.gov/cgi-bin/rssExec.pl?Submit=Display&Path=Y2014/D06-16/C:14-1128:J:Posner:aut:T:fnOp:N:1363624:S:0.

July 3, 2014

Post-Aereo: Has The Supreme Court Clouded the Future?

By Barry Werbin
Herrick, Feinstein LLP

By now, everyone is probably tired of reading the myriad blogs and articles on the Supreme Court's June 25th decision in American Broadcasting Company, Inc. v. Aereo, Inc. Yet the real question raised by the decision -- which did not set any bright-line tests -- is what its impact will be on other existing and future technologies that permit consumer end-users to access subscribed content anywhere in the world and at any time over the Internet.

In the 6-3 decision, the majority took a fairly straightforward approach in going through the two primary issues presented: whether Aereo was engaging in a "performance" by using its system of dime sized antennas to deliver one-to-one content to its subscribers, and whether such performance was "public" so as to impose direct copyright liability on Aereo. The court answered both questions in the affirmative, pointing out that even a home user watching television "performs" a broadcast merely by turning on a television and flipping channels, and that Aereo essentially acted no differently than a cable system, even when it only enhanced its subscribers' ability to receive and view over-the-air broadcast programming.

The Court emphasized that Aereo was not merely an equipment provider and, while its system remained "inert" until a subscriber indicated what he or she wanted to watch, Aereo nevertheless was communicating the same content to multiple persons and was thus engaging in a public performance. Noting that in enacting the Transmit Clause in the 1976 Act, Congress had clearly overruled prior Supreme Court precedents that had permitted CATV systems to operate (no issue here), the majority interpreted the Transmit Clause as applying to any entity that acts like a CATV or more modern cable system (conjuring up the adage that "if it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck"). Despite Aereo's system remaining inert until a subscriber designates which programming he or she wants to watch, the Court nevertheless equated Aereo's system with the CATV systems outlawed under the 1976 Act.

Consistent with the "looks like a duck" analogy, the Court said that Aereo's "technological differences" only concern "behind-the-scenes" ways in which Aereo delivers television programming to its viewers' screens, and these differences did not render Aereo's commercial objective any different from that of cable companies. Nor did Aereo's system significantly alter the viewing experience of its subscribers.

Justice Scalia's dissent said that the majority analyzed "performance" wrong, because it focused on the overall purpose of the technological system rigged by Aereo as opposed to where the "volitional" conduct was taking place. To the dissenters, the focus should have been on the individual subscribers, who controlled what programming to watch and when the allocated mini antennae would be activated in response to subscribers' commands.

This is where it gets murky. If we were to ignore all technological interfacing between, say, a cloud service provider and its subscribers, and focus only on the "commercial objective" of the provider, then all one has to do is find a for-profit motive in the context of any form of online content delivery, thereby essentially rendering meaningless the volitional conduct requirement for finding direct infringement. The Court doesn't go quite that far. In fairness to the majority, Aereo really was not such a difficult case, because the Transmit Clause covers the transmission of content to individuals at the same place or in different places, and at the same time or in different times, and has always arguably been broad enough to encompass Aereo's system.

Another key distinguishing factor, of course, is that Aereo paid no licensing fees, unlike cable and satellite operators; in the latter case, once a home subscriber lawfully receives fully licensed broadcasts, the subscriber has a fair use right under Sony to record broadcast programming and "time-shift" at will when he or she views that programming. Merely transplanting that mechanism into the cloud (à la Dish Network's "Hopper"), using a technological system developed by a provider, arguably does nothing more than what the individual subscriber is lawfully entitled to do in his or her home.

The majority itself recognized this scenario and threw a comfort blanket to the tech sector by saying: "In other cases involving different kinds of service or technology providers, a user's involvement in the operation of the provider's equipment and selection of the content transmitted may well bear on whether the provider performs within the meaning of the Act." Therefore, volitional conduct on the subscriber end really is not dead. We just have no test for the "may well bear on" assessment. Maybe the duck knows.

Providing some small assistance, the majority made a clear distinction between the specific facts in Aereo and other situations where "subscribers receive performances in their capacities as owners or possessors of the underlying works." Justice Breyers' majority bloc noted that whether a transmission to "a set of people" constitutes a public performance "often depends on their relationship to the underlying work." Courts will continue to grapple with this general guidance in assessing what constitutes being an "owner" or "possessor" and what types of relationships between end users and underlying works remove a content delivery system from the realm of infringing conduct.

Surprisingly absent from the majority's decision was any discussion that the content at issue was free over-the-air broadcasts, which any citizen within reception range could lawfully receive with a digital antenna and a digital-ready TV. It seems that what really irked the Court was Aereo taking commercial advantage of what it viewed as a loophole in the language of the Transmit Clause. The venture capitalists who funded tens of millions of dollars into Aereo (primarily Barry Diller's IAC/InterActiveCorp) likely did not do so for some high altruistic purpose (despite some of the press releases to the contrary); they did it to make money and realize significant returns on their investments. Even the dissent said that it did not really like what Aereo was doing, but was bound to apply the provisions of the Act as written; and it was the job of Congress, not the Court, to correct any ill-phrased language in the Transmit Clause.

Absent also, albeit not surprisingly, from the majority's opinion, was any mention of the now infamous Cablevision case (The Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536 F.3d 121(2d Cir. 2008), cert. denied), to which the dissent cited several times with approval. Cablevision involved a remote storage DVR system that was offered to paying subscribers, where the Second Circuit found no direct infringement of the public performance right by Cablevision because its DVR customers were the ones who made the copies carried out by the DVR system. Yet in keeping with its focus specifically on the facts of Aereo, the Court's majority tried to avoid making any overreaching statements or addressing matters that were not directly before the Court. Avoiding any discussion of Cablevision was therefore prudent.

Similarly, in the Dish Network litigation in California, involving Dish's "Hopper" technology called "Sling," the Ninth Circuit ruled last year against the broadcaster plaintiffs. (Fox Broadcasting Company, Inc. v. Dish Network L.L.C., 723 F.3d 1067 (9th Cir. 2013).) The Ninth Circuit specifically found that "operating a system used to make copies at the user's command does not mean that the system operator, rather than the user, caused copies to be made. Here, Dish's program creates the copy only in response to the user's command." Fox News immediately ran back to the Ninth Circuit last week for reconsideration after the Supreme Court decided Aereo.

Certainly, the Aereo Court's majority's opinion was circumspect and cautiously avoided any overreaching language that could impact new technologies, whether cloud based or otherwise. Indeed, with a nod to the warnings identified in various amicus briefs submitted by representatives of the technology industry and the United States government itself, the Court expressly stated that "we have not considered whether the public performance right is infringed when the user of a service pays primarily for something other than the transmission of copyrighted works, such as the remote storage of content." (Emphasis added)

Yet a clear bright-line test was not provided, and we are perhaps left with "if it looks like a duck" gut assessment, which does not make for good law. The decision will undoubtedly keep judges and copyright litigators busy for some years to come. That is, unless the media broadcast industry sits down with providers like Dish Network and others (as NBC is currently doing) to work out reasonable business models that compensate content owners fairly and yet permit the public to receive lawfully licensed content anywhere they want, and at any time, as this is the age we live in and there is no going back. Even the duck would agree.

July 10, 2014

Judge Rakoff Finally Explains His Fair Use Rationale Respecting Lawyers' Briefs Filed With Courts

By Barry Werbin

Over a year ago in White v. West Pub. et al (S.D.N.Y.), Judge Jed Rakoff granted summary judgment, but deferred issuing an opinion, in favor of West Publishing and Reed Elsevier (LexisNexis) in a copyright infringement class action suit brought by several lawyers, who alleged that West and Lexis/Nexis had infringed copyrights in their electronically filed court briefs by aggregating them in a key-word tabbed and text-based searchable database that was made accessible for a fee. On July 3, 2014 (17 months later), Judge Rakoff finally issued his opinion explaining the reasoning for finding fair use. [The decision can be accessed here: http://www.nysd.uscourts.gov/cases/show.php?db=special&id=412]

After assessing each of the four Section 107 factors, Judge Rakoff initially concluded that under the first factor this was a transformative use, for two reasons: "First, while White created the briefs solely for the purpose of providing legal services to his clients and securing specific legal outcomes in the Beer litigation, the defendants used the brief toward the end of creating an interactive legal research tool.... Second [notwithstanding the commercial aspect of defendants' use], West and Lexis's processes of reviewing, selecting, converting, coding, linking, and identifying the documents 'add[] something new, with a further purpose or different character' than the original briefs."

With respect to the second factor, he noted that the nature of the underlying copyright-protected [arguably] briefs "are functional presentations of fact and law, and this cuts towards finding in favor of fair use."

On the third factor, Judge Rakoff opined: "Although defendants here copied the entirety of White's briefs, such copying was necessary to make the briefs comprehensively text searchable. Thus the Court finds that defendants only copied what was reasonably necessary for their transformative use, and that the third factor is therefore neutral."

Finally, on the fourth factor, he found there was no impact on the potential market for the works. In particular, Judge Rakoff emphasized that "West's and Lexis's usage of the briefs is in no way economically a substitute for the use of the briefs in their original market: the provision of legal advice for an attorney's clients. White himself admits that he lost no clients as a result of West's and Lexis's usage....Furthermore, no secondary market exists in which White could license or sell the briefs to other attorneys, as no one has offered to license any of White's motions, nor has White sought to license or sell them." The reason there is no secondary market for licensing or selling the briefs, said Judge Rakoff, is "because the transactions costs in licensing attorney works would be prohibitively high."

So in the interest of transformative use, all us litigators should keep our fees high!

July 16, 2014

Garcia v Google Amended Opinion

By Barry Werbin

On Friday, July 11th, the Ninth Circuit issued an amended opinion in the controversial Garcia v. Google case (Innocence of Muslims film case addressing an individual actor's own copyrightable performance right). Chief Judge Kozinski tries to backpedal a bit by sticking to his earlier divisive opinion, but saying:

"It suffices for now to hold that, while the matter is fairly debatable, Garcia is likely to prevail based on the record and arguments before us. Nothing we say today precludes the district court from concluding that Garcia doesn't have a copyrightable interest, or that Google prevails on any of its defenses. We note, for example, that after we first issued our opinion, the United States Copyright Office sent Garcia a letter denying her request to register a copyright in her performance. Because this is not an appeal of the denial of registration, the Copyright Office's refusal to register doesn't "preclude[] a determination" that Garcia's performance "is indeed copyrightable." OddzOn Prods., Inc. v. Oman, 924 F.2d 346, 347 (D.C. Cir. 1991). But the district court may still defer to the Copyright Office's reasoning, to the extent it is persuasive. See Inhale, Inc. v. Starbuzz Tobacco, Inc., 739 F.3d 446, 448-49 (9th Cir. 2014). After we first published our opinion, amici raised other issues, such as the applicability of the fair use doctrine, see 17 U.S.C. § 107, and section 230 of the Communications Decency Act, see 47 U.S.C. § 230. Because these defenses were not raised by the parties, we do not address them. The district court is free to consider them if Google properly raises them." [Emphasis added]

The opinion is available here: Garcia v Google Amended Opinion.pdf

September 18, 2014

Kienitz v. Sconnie Nation LLC.- Seventh Circuit

By Barry Werbin

A significant new decision (9/15/14) by the Seventh Circuit has affirmed the district court's finding of fair use in Kienitz v. Sconnie Nation LLC, but expressly rejected the concept of transformative use. This was a well-publicized case that used a posterized, low resolution, photograph of Paul Soglin, the mayor of Madison, Wisconsin, on a T-shirt to make a political commentary about his having participated in the Mifflin Street Block Party many years earlier.

This is the first Circuit court to expressly reject transformative use, and it has done so rather emphatically. The court found it unnecessary to address transformative use, finding that it was "not one of the statutory factors" under Section 107, despite the Supreme Court having previously mentioned it in Campbell v. Acuff-Rose Music. It specifically expressed skepticism about the Second Circuit's application of transformative use in the Cariou case, emphasizing that: "asking exclusively whether something is 'transformative' not only replaces the list in §107 but also could override 17 U.S.C. §106(2), which protects derivative works. To say that a new use transforms the work is precisely to say that it is derivative and thus, one might suppose, protected under §106(2). Cariou and its predecessors in the Second Circuit do not explain how every 'transformative use' can be 'fair use' without extinguishing the author's rights under §106(2)."

The Court ultimately affirmed the finding of fair use based on a direct application of the four factors in §107, placing particular emphasis on the fourth factor concerning the effect on the potential market for the copyrighted photograph: "A t-shirt or tank top is no substitute for the original photograph. Nor does Kienitz say
that defendants disrupted a plan to license this work for apparel. Kienitz does not argue that defendants' products have reduced the demand for the original work or any use of it that he is contemplating." The Court further emphasized that Kienitz had licensed the photograph to Soglin (which had been taken at Soglin's 2011 inauguration) for "no royalty" and was "posted on a public website for viewing and downloading without cost."

The fact that the defendant intended the shirt to make a political statement also influenced the Court's decision under the first factor. Nevertheless, the Court took the further unusual step of noting its displeasure with "lazy appropriators," who were not intended to be protected by §107, emphasizing that the defendant did not need to use the plaintiff's photograph to create its lampoon, and that the T-shirt was not used to mock (parody) the photograph itself but Mayor Soglin. The Court further noted that Kienitz, as a photographer, could have his livelihood negatively affected if his clients going forward believed portraits taken for dignified purposes could end up on T-shirts and be used in a derogatory manner. Nevertheless, because Kienitz failed to raise these additional arguments, the Court was compelled to find fair use.

Whether this signifies a slow shift among courts away from transformative use remains to be seen, but if so, that would be a sea change. Kienitz v Sconnie Nation - 7th Circuit.pdf

October 22, 2014

Eleventh Circuit Decision in Cambridge University Press v. Patton

By Barry Werbin

An important and generally well-reasoned 129-page fair use decision came down October 17th by the Eleventh Circuit, in a case involving teaching course books that was brought against officials of Georgia State University and the University System of Georgia. The alleged that the defendants infringed the plaintiff publishers' copyrights by permitting professors to make digital copies of excerpts of graduate-level scholarly and academic books available to graduate students for free (i.e., modern digital versions of paper "coursepacks" that normally contain licensed content). The Court reversed in part the District Court's 300+ page decision, which had found after a bench trial that only 5 of 74 works in issue infringed and that a fair use defense applied to 48 of the works overall (as for the balance, either copyright ownership was not established or the copying was deemed "de minimus"). Cambridge University Press v. Patton, Nos. 12-14676 & 12-15147 (11th Cir. Oct. 17, 2014) (gsu-decision.pdf).

The universities maintain systems for digital distribution of course materials to students. Materials selected by professors that are either owned by the school libraries or the professors are scanned and posted to the distribution system. Based on a 2009 university protocol, each professor was required to complete a checklist of fair use factors for every excerpt as part of an assessment as to whether the excerpt qualified as fair use. Access to the network was password protected and was permitted only for students of each class during the applicable semester. The plaintiffs alleged that numerous professors made thousands of excerpts of plaintiffs' articles available in their distribution systems without permission, and that the universities' administrations encouraged this activity.

On appeal, the Court faulted the District Court for giving all four Section 107 factors equal weight and for using a mathematical formulaic method for assessing each factor, referring to that court's approach as "overarching fair use methodology." Instead, fair use must be assessed as to each work. One of the more interesting discussions in the appellate opinion is that while the uses of the plaintiffs' works were not "transformative" (with the Court otherwise adopting "transformative use" as a key component of the first Section 107 factor) -- because they were verbatim copies of the originals converted to digital format and served the same intrinsic purposes as the originals -- the use was clearly for nonprofit educational purposes and not commercial exploitation, even if the universities avoided paying license fees and charged tuition, and the use furthered a public purpose since these were public universities. Thus, "the first factor favors a finding of fair use despite the nontransformative nature of the use."

The Court also distinguished several prior cases involving infringing copying of coursepack content by for-profit copy-shops, as those did not involve direct copying by teachers and universities themselves, noting that in those cases, the courts "expressly declined to conclude that the copying would fall outside the boundaries of fair use if conducted by professors, students, or academic institutions."

Nevertheless, the university policy used the plaintiffs' works for their intended market purpose and the publishers licensed much of their content for fees, such that the forth factor addressing potential market harm was more serious in this case. The district court also should not have ignored the creative and other aspects of the works individually, particularly where that court also erred by adopting a 10% mathematical benchmark for the amount of content used, regardless of the qualitative nature of the content, which also was reversible error. In terms of the policy underlying fair use, the Circuit Court emphasized that, "when determining whether Defendants' unpaid copying should be excused under the doctrine of fair use in this case, we are primarily concerned with the effect of Defendants' copying on Plaintiffs' incentive to publish, not on academic authors' incentive to write."

The District Court had also erred in its assessment of the second fair use factor -- the nature of the copyrighted work -- by finding fair use in every case. While the appeals court noted this factor was "of comparatively little weight in this case particularly because the works at issue are neither fictional nor unpublished, where the excerpts in question contained evaluative, analytical, or subjectively descriptive material that surpasses the bare facts, or derives from the author's own experiences or opinions, the District Court should have held that the second factor was neutral or even weighed against fair use where such material dominated."

In the end, the Court found that the trial court had abused its discretion in granting injunctive and declaratory relief and remanded. An award of legal fees to the defendants also was reversed. The Court also cited favorably to the Second Circuit's approach to fair use assessment in Cariou v. Prince. Note that unlike Cariou, however, the Eleventh Circuit did not make its own ultimate findings of fair use, but remanded the case to permit the District Court to make that decision on a work-by-work basis.

November 20, 2014

Pre-1972 Sound Recordings Could Kill the Radio Stars

By Barry Werbin and Sharon O'Shaughnessy
Herrick, Feinstein LLP

On the heels of the Central District of California's related September 2014 decision, Judge Colleen McMahon of the Southern District of New York, has denied Sirius' motion for summary judgment on Flo & Eddie, Inc.'s class action complaint alleging that Sirius XM Radio (Sirius) committed common law copyright infringement and engaged in unfair competition by publicly performing pre-1972 sound recordings of The Turtles, and by reproducing those recordings in aid of its performances. Flo & Eddie, Inc. v. Sirius XM Radio, Inc. (S.D.N.Y. Nov. 14, 2014). Absent Sirius convincing the court by December 5, 2014, that there are remaining issues of material fact that would require a trial, Judge McMahon will enter summary judgment in favor of Flo & Eddie as to copyright infringement liability and proceed to an inquest on damages.

Ultimate victories for Flo & Eddie, Inc., which owns the copyrights to The Turtles' master recordings, could be disastrous to Sirius, a subscription-based satellite and Internet radio services provider, which operates 24/7, devotes entire channels to pre-1972 sound recordings, and, like other streaming music providers, has never paid separate royalties to perform sound recordings. Damages could reach millions of dollars, and this sea of change after decades of status quo non-enforcement will surely result in copycat lawsuits that will turn the broadcast and streaming music industry on its head.

Sirius and other providers pay music license royalties covering the underlying musical compositions, but music is the only type of creative work that has two independent copyrights: (i) a copyright in the composition (lyrics and music) that generally is held by the composers of works or their music publishers; and (ii) a copyright in the sound recording, which is the medium in or on which a particular performance of a musical composition is fixed for posterity and for playback. As Judge McMahon explained, "In essence, a copyright in a sound recording is a copyright in the performance -- not in the work being performed."

While federal law has protected copyrights in musical compositions since 1831, Congress only made sound recordings eligible for federal statutory copyright protection in 1971. This protection operates prospectively and, consequently, recordings that were "fixed" (i.e., recorded) prior to February 15, 1972, are not eligible for federal copyright protection. As Congress did not adopt a federal copyright scheme for pre-1972 sound recordings, holders of sound recording copyrights seeking to exercise their rights must look to state common law to determine the copyright protections and remedies to which they are entitled.

Enter Flo & Eddie, Inc., a California corporation that is wholly owned by Mark Volman and Howard Kaylan. Volman and Kaylan were two of the original members of the 1960s rock group The Turtles, whose memorable hits include "Happy Together" and "It Ain't Me Babe." Flo & Eddie, Inc. acquired all rights to The Turtles master recordings. Sirius acknowledges that it "performs" sound recordings, including pre-1972 Turtles recordings owned by Flo & Eddie,Inc., by broadcasting them over its satellite radio network and streaming them over the Internet. To facilitate this service, Sirius makes multiple copies -- temporary, permanent, whole, and/or partial -- of pre-1972 The Turtles sound recordings during its broadcast process, performs the copies it makes, and does so without obtaining sound recording reproduction and performance licenses from Flo & Eddie, Inc.

Flo & Eddie, Inc. filed three class actions against Sirius in California, New York, and Florida, asserting state common law copyright infringement claims (as well as claims for unfair competition, conversion, and misappropriation) under the laws of the three respective states. Florida has yet to issue its ruling.

In the California action, Flo & Eddie, Inc. argued that Sirius was liable for two unauthorized uses of its sound recordings: (i) publicly performing Flo & Eddie, Inc.'s recordings by broadcasting and streaming the content to end consumers and to secondary delivery and broadcast partners; and (ii) reproducing Flo & Eddie's recordings in the process of operating its satellite and Internet services. Sirius argued that the bundle of rights that attaches to copyright ownership of a pre-1972 sound recording does not include the exclusive right to publicly perform the recording. Flo & Eddie,Inc., however, contended that an exclusive public performance right existed under California law.

Relying on California's copyright statute, Civil Code §980(a)(2), the California court agreed with Flo & Eddie, Inc. and, on September 22, 2014, granted its motion for summary judgment on its public performance-based claim. After first noting that the California legislature intended ownership of a sound recording to include all rights that can attach to intellectual property, save the singular exception for a "cover" of a recording, the court concluded that copyright ownership of a sound recording under §980(a)(2) necessarily includes the exclusive right to publicly perform the recording. The court also found in favor of Flo & Eddie, Inc. on its unfair competition, conversion and misappropriation claims.

As New York, unlike California, does not have a specific statute that protects a public performance right in pre-1972 sound recordings, Judge McMahon considered the following four issues under New York common law: (i) whether the owners of pre-1972 sound recordings possess an exclusive right to the public performance of those works and whether Sirius infringed Flo & Eddie, Inc.'s copyright; (ii) whether Sirius' broadcast of The Turtles recordings is protected by the "fair use" doctrine; (iii) whether upholding Flo & Eddie, Inc.'s claims would violate the Dormant Commerce Clause; and (iv) whether Flo & Eddie, Inc.'s claims were barred by laches.

In the New York action, Flo & Eddie, Inc. first argued that New York's common law copyright protection prohibited both the reproduction and public performance of The Turtles' pre-1972 sound recordings. Echoing the argument that it made in California, Sirius contended that New York common law copyrights in pre-1972 sound recordings do not afford an exclusive right of public performance. After first acknowledging that this was a question of first impression, Judge McMahon ultimately concluded that "the New York Court of Appeals would recognize the exclusive right to public performance of a sound recording as one of the rights appurtenant to common law copyright in such a recording." Judge McMahon reached this conclusion based upon a detailed examination of the background principles and history of New York copyright common law, which revealed that the common law typically protects against unauthorized performances and has provided "expansive" protection for artistic works that do not enjoy federal statutory copyright protection for at least 50 years. Sirius' argument -- that New York case law contains no discussion of public performance rights in sound recordings -- was unavailing. As the court ultimately concluded, "New York has always protected public performance rights in works other than sound recordings that enjoy the protection of common law copyright. Sirius suggests no reason why New York -- a state traditionally protective of performers and performance rights -- would treat sound recordings differently."

The court next determined that Sirius reproduced Flo & Eddie, Inc.'s copyrighted recordings without authorization by (i) reproducing The Turtles' recordings for its three main databases, associated backups and smaller on-site databases; and (ii) producing several temporary but complete copies of The Turtles' recordings for its play-out servers, caches and buffers. In response to Sirius' argument that it was not liable for infringement because it did not "distribute" The Turtles' recordings, Judge McMahon pointed out that "[t]o the extent that distribution is an element of common law copyright infringement, publicly performing sound recordings is an act of distribution. Otherwise, Sirius cannot explain how New York courts could have recognized infringement claims alleging that defendants publicly performed copyrighted works without authorization."

Judge McMahon also rejected Sirius' contention that its creation of multiple complete copies of Flo & Eddie, Inc.'s sound recordings could be considered "fair use." After noting that New York courts have not articulated the scope of New York's fair use doctrine, the court undertook a fair use analysis based on the Copyright Act standard and concluded that "Sirius makes non-transformative use of Flo and Eddie's recordings and does so for commercial gain. It is, therefore, 'common sense' that Flo and Eddie would suffer market harm when Sirius takes its property and exploits it, unchanged and for a profit." The court also held that Sirius engaged in unfair competition, Flo & Eddie, Inc.'s assertion of its common law copyright is not barred by the Dormant Commerce Clause, and Sirius cannot invoke the defense of laches.

These explosive rulings may have dire consequences for the broadcast radio industry -- especially streaming music platforms. While the California and New York decisions will be appealed, they raise a host of issues that underscore the uncertain future of the sound recording copyright landscape. For instance, if the decisions are not stayed pending appeal, will pre-1972 music disappear from the airwaves? Will litigating the existence of a public performance right on a state-by-state basis upend the entire broadcasting industry? What happens if the myriad of state laws end up conflicting in the Internet age? Will Congress step in, as many have started urging, and bring pre-1972 sound recordings under the fold of the federal Copyright Act? In the words of The Beatles, legislators need to "Come Together" and sort this out.

[The full SDNY decision can be accessed here: http://www.scribd.com/doc/247180767/Flo-Eddie-v-Sirius-XM-NY-Order.]

January 21, 2015

Ninth Circuit Affirms for Costco in Omega Case

By Barry Werbin

The final chapter has closed for Omega in its long-running battle against Costco over genuine imported "grey market" Omega watches that bore a tiny globe design on the rear. On Jan. 20, 2015, the Ninth Circuit affirmed the California District Court's finding of no copyright liability after the Supreme Court split 4-4 in 2010 over Costco's first sale doctrine defense. The 4-4 split had left in place the Ninth Circuit's prior 2008 decision holding that the first sale doctrine only applied to goods lawfully made and first sold in the U.S., not abroad. This left open Costco's rarely granted defense of copyright misuse, which was remanded. The District Court then found in favor of Costco on the misuse defense and awarded Costco legal fees, and Omega appealed. In the interim, in 2013 the Supreme Court decided the Kirtsaeng case, which made it clear that the first sale doctrine also applied to goods lawfully manufactured and first sold abroad.

The Ninth Circuit has now affirmed the District Court and its award of attorneys' fees to Costco based on the first sale doctrine under Kirtsaeng, although the District Court had granted Costco summary judgment on its copyright misuse defense. A concurring opinion would have instead affirmed the copyright misuse finding, which apparently was the only issue formally briefed by the parties. Decision here: Omega v. Costco 9th Cir. 2014.pdf.

January 28, 2015

In Wake of Aereo, California District Court Finds DISH Networks' New Technologies Do Not, For the Most Part, Violate the Copyright Act

By Barry Werbin and Bryan Meltzer, Herrick, Feinstein LLP

As technological advancements change the way we watch television programming, media networks and broadcasters continue to struggle with new legal issues relating to those technologies. Following the Supreme Court's recent rejection of Aereo's business model in American Broadcasting Company, Inc. v. Aereo, Inc., 134 S.Ct. 2498 (2014) (finding its online streaming of unlicensed over-the-airways television programming to subscribers constituted a public performance in violation of the Copyright Act), Central District of California Judge Dolly M. Gee recently held in Fox Broadcasting Co. v. Dish Network LLC, No. 12-4529 (C.D. Cal. Jan. 20, 2015 [unsealed]) that DISH Network LLC's ("DISH") new technologies did not, for the most part, violate the Copyright Act, but did, for the most part, breach DISH's 2002 Retransmission Consent Agreement with Fox Broadcasting Co. ("Fox") ("RTC Agreement").

Fox claimed that five of DISH's technological innovations and/or practices violated the Copyright Act and the parties' agreements. In particular, Fox took issue with the following DISH products: (1) DISH Anywhere using Sling technology ("DISH Anywhere"), which enables DISH subscribers to access live and recorded programming remotely on their computers and mobile devices; (2) PrimeTime Anytime ("PTAT"), which enables subscribers to record all prime time programming shown on the four major networks; (3) AutoHop, which is a feature of PTAT that enables subscribers to automatically skip commercials while watching recorded shows; (4) Quality Assurance ("QA") copies, which are DISH's internal recordings of shows used to test AutoHop prior to its delivery to subscribers; and (5) Hopper Transfers, which allows subscribers to transfer copies of DVR recordings to their mobile devices for later viewing.

In a heavily redacted decision dated January 12, 2015, Judge Gee rejected the vast majority of Fox's copyright claims because she found that, unlike in Aereo, where Aereo itself publicly performed the copyrighted broadcast content by initiating the transmission of copyrighted works, DISH's products simply facilitated its consumer subscribers' ability to transfer and/or copy programming that they already lawfully possessed and for which DISH held a license for similar initial retransmission of the programming to its users via satellite. For instance, Judge Gee held that DISH Anywhere, PTAT and Hopper Transfers did not directly infringe on Fox's copyrights since it was the subscriber, and not DISH, who engaged in the volitional conduct required for a copyright claim (i.e., the copying or transferring of the copyrighted material).

Although Judge Gee found that DISH's subscribers engaged in volitional conduct, she also held that their conduct did not actually infringe on Fox's copyrights, and therefore, DISH was not liable for secondary infringement. In particular, the court found that the subscribers' use of DISH Anywhere to transmit rightfully possessed programming to their own computers and devices did not constitute a "public" performance (i.e., a transmission to a large number of members of the pubic who are unknown to each other) as required for an infringement under the Copyright Act (in contrast to Aereo, where the Supreme Court found that Aereo was engaged in a public performance).

Judge Gee also found that the subscribers' use of PTAT and Hopper Transfers constituted fair use under Section 107 of the Copyright Act because, although a secondary market for Fox's programming exists (through outlets such as Hulu, Netflix, etc.), the potential harm to Fox was too speculative to cause an infringement. Moreover, Judge Gee stated that Hopper Transfers by its very nature constitutes fair use because it simply permits "non-commercial time-and place-shifting of recordings already validly possessed by subscribers, which is paradigmatic fair use under existing law." Harking back to the Supreme Court's seminal decision in Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417 (1984), because she found that the subscribers were not liable for infringement, Judge Gee held that DISH was not liable for inducing or encouraging any infringement.

In addition, Judge Gee also held that Auto Hop (i) did not infringe on Fox's copyrights because it did not copy or distribute the material but instead simply skipped commercials, and (ii) did not violate the Copyright Act's compulsory licensing framework for secondary transmission of network stations by satellite providers because by simply skipping commercials, it did not "change, delete, or add anything to the commercials at issue."

While coming close, DISH did not, however, pitch a perfect game with respect to Fox's copyright claims. Indeed, Judge Gee held that DISH's QA copies infringed on Fox's copyrights because DISH simply copied the copyrighted material for a commercial use, which here was found not to be a fair use. In fact, the court noted that a secondary market for the copies existed and Fox could have negotiated with DISH over the right to make such copies available.

Moreover, as successful as DISH was with Fox's primary copyright claims, it was arguably just as unsuccessful with Fox's contract claims. Indeed, Judge Gee found that a number of DISH's products breached the RTC Agreement.

First, Judge Gee agreed with Fox that DISH Anywhere breached the "no copying" provision of the RTC Agreement, which prohibited the copying of content other than for in-home use. Judge Gee rejected DISH's argument that the in-home exception was intended to include "private, non-commercial use" (like with mobile devices) because she found that if DISH wanted to incorporate future technologies, it should have bargained for such language.

Second, Judge Gee similarly found that the QA copies clearly breached the "no copying" provision of the RTC Agreement. While DISH argued that its vendor did the copying, Judge Gee found that DISH's authorization of such copying constituted a breach.

Finally, the court held that Hopper Transfers violated the same "no copying" provision because DISH authorized its subscribers to copy Fox's copyrighted programs to their devices by providing them with both the means and permission to make such copies.

On the other hand, Judge Gee found that PTAT did not breach the "no distribution" provision of the RTC Agreement because it did not deliver the programming to more than one person, and instead just recorded specific programming to which the subscribers already had access. In addition, DISH Anywhere did not violate the "other technologies" provision of the parties' 2010 Letter Agreement, which amended the RTC Agreement, because, under the plain terms of the Agreement, the subscriber and not DISH retransmitted the copyrighted programming. DISH's facilitation of such transmissions did not breach the agreement.

In sum, Judge Gee found that companies like DISH can innovate in ways that do not violate the Copyright Act. Those companies, however, must make sure that their own contracts do not prohibit them from making such advancements. To that end, as Judge Gee recommended, companies should bargain for contractual language that accounts for "future technologies not then contemplated." Either way, though, the decision will likely be more popular with the innovators than the copyright owners.

The long-running DISH court battle and Judge Gee's latest decision provide a window into the future of TV. While networks can legally innovate new ways to deliver programming to their customers, they and their distribution partners will need to draft future agreements affording themselves the flexibility to keep up with technological advancements.

February 8, 2015

Gaylord v. U.S.

By Barry Werbin

This case involving use of a photo of the Korean War memorial sculpture on a .U.S stamp, has been up and down to the Federal Circuit twice and ongoing for a long time. In this final chapter (we hope), the district court's after-remand copyright damages award in favor of the plaintiff and against the U.S. Postal Service based on a 10% per-unit royalty, resulting in an award of $540,000 from sales of collector stamps sold by the Post Office, plus prejudgment interest, was affirmed by the Federal Circuit. The district court based the royalty on survey evidence showing the Postal Service's commissions in its ordinary course of business, and determined that the Postal Service received $5.4 million in revenue -- "'almost pure profit'"--from unused stamps depicting the image that had been sold to collectors during the limited life of the stamp issue.

Of particular interest is the Federal Circuit's re-affirmance of a reasonable royalty for copyright damages, an idea common in patent cases. The Court noted that: "Consistent with the conclusions of other circuits that have considered the issue, we held [in Gaylord II, 678 F.3d 1339 (Fed. Cir. 2012)] that actual damages for copyright infringement may be based on a reasonable royalty representing 'the fair market value of a license covering the defendant's use.'" While setting a royalty is typically tied to a hypothetical license/royalty negotiation, the Court emphasized that this "determination must be tied to the particular work at issue and its marketplace value--much as, in patent law, the determination must be tied to the particular patented technology and its footprint in the market."

After reviewing all the evidence assessed by the district court, the Federal Circuit concluded that "giving the Postal Service 90% of the profits and Mr. Gaylord 10%--is within the range of reasonable findings from the evidence." This was so even if the Postal Service might have negotiated a flat license fee instead of a running royalty due to "the uniqueness of the work at issue here, including its status as a distinctively recognized symbol of the Korean War for most Americans...."

A copy of the decision is available here Gaylord v. US.pdf

July 17, 2015

SPEAR MARKETING, INC. v. SPEAR MARKETING, INC.

By Barry Werbin

An important new decision of first impression out of the Fifth Circuit in Texas, issued on June 30th, holds that state law claims based on ideas - including trade secrets - that are fixed in tangible media are preempted by Section 301(a) of the Copyright Act, despite Section 102(b) excluding from copyright protection "any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work."

Section 301(a) is the preemption clause that bars state law claims concerning "all legal or equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright as specified by section 106 in works of authorship that are fixed in a tangible medium of expression and come within the subject matter of copyright as specified by sections 102 and 103...."

The Court explained that the interaction between Sections 301(a) and 102, based on the reasoning of a majority of Circuits that have ruled on this issue (as well as Nimmer), "clearly delineates between the purpose of federal copyright preemption and that of federal copyright protection. Congress intended the Copyright Act to protect some expressions but not others.... Finding this reasoning is persuasive, we join the majority position and hold that state law claims based on ideas fixed in tangible media are preempted by §301(a)."

This aligns the Fifth Circuit with the Second, Fourth, Sixth, Seventh and Ninth (en banc) Circuits, whereas the Eleventh Circuit remains in the minority on this issue.

SPEAR MARKETING, INC. v. SPEAR MARKETING, INC., No. 14-10753 (5th Cir. 6/30/2015) - SPEAR MARKETING.pdf

August 4, 2015

Happy Birthday

A fascinating new development has occurred in the "Happy Birthday" copyright infringement action by Warner, which apparently just produced in discovery, very belatedly, a smoking gun document that is now the subject of a July 27, 2015 motion by Good Morning To You Productions (Good Morning) for the Cal. District Court to consider this newly discovered evidence before ruling on pending summary judgment motions. The evidence consists of 1922 and 1927 sheet music publications of the song Happy Birthday (same lyrics and melody) in "The Everyday Song Book" - the kicker is that there is no copyright notice on the sheet music, which would invalidate any copyright under the 1909 Act.

Apparently, Warner previously claimed that the song was first published in 1935, but Good Morning argues that was only for a specific piano arrangement and not the actual original song.

https://www.techdirt.com/articles/20150727/16042931768/happy-birthday-copyright-bombshell-new-evidence-warner-music-previously-hid-shows-song-is-public-domain.shtml

August 21, 2015

Sixth Circuit Reversal in Varsity Brands v. Star Athletica

By Barry Werbin

In a significant decision, on August 19th, the Sixth Circuit in Varsity Brands v. Star Athletica reversed the WD Tenn.'s widely criticized decision that had held that stripes, chevrons, zigzags and color blocking imprinted on cheerleader uniforms were not copyrightable because these design elements could not be disaggregated from the cheerleader dress design, which were otherwise utilitarian. That is, the District Court found that the aesthetic features of a cheerleading uniform merge with the functional purpose of the uniform.

The Circuit Court addressed what it characterized as "the question that has confounded courts and scholars: When can the 'pictorial, graphic, or sculptural features' that are incorporated into 'the design of a useful article' 'be identified separately from, and [be] capable of existing independently of the utilitarian aspects of the article[?]'"

In reversing, the Court granted partial summary judgment for Varsity on the issue of whether Varsity's designs were copyrightable pictorial, graphic, or sculptural works, holding they were, because the design elements could exist independently of the utilitarian aspects of the cheerleading uniforms, thus qualifying as copyrightable subject matter.

First, the Court gave deference to the registrations that had been issued by the Copyright Office, finding that a "comparison between the designs at issue in this case and the other Varsity registered designs confirms that the Copyright Office consistently found the arrangements of stripes, chevrons, and color-blocking to be original and separable from the utilitarian aspects of the articles on which they appear, and therefore copyrightable."

Second, in expressly upholding the "conceptual separability" doctrine, the Court held that "the Copyright Act protects the 'pictorial, graphic, or sculptural features' of a design of a useful article even if those features cannot be removed physically from the useful article, as long as they are conceptually separable from the utilitarian aspects of the article." After summarizing various approaches to assessing conceptual separability, particularly from the Second and Fourth Circuits, the Court adopted a "hybrid approach" that asks a series of questions to initially segregate utilitarian elements of a work, followed by an assessment as to whether viewers can identify "'pictorial, graphic, or sculptural features ... separately from . . . the utilitarian aspects of the [useful] article....'" Finally, there must be an assessment of whether the "features" of the design of the useful article "'exist[] independently of[] the utilitarian aspects of the [useful] article.'"

Ultimately, the Court deemed the designs as "more like fabric design than dress design," emphasizing that Varsity's graphic designs do not "enhance the [cheerleading uniform's] functionality qua clothing" and that "[t]he top and skirt are still easily identified as cheerleading uniforms without any stripes, chevrons, zigzags, or color-blocking." Evidence further supported the conclusion that the "designs are transferable to articles other than the traditional cheerleading uniform" and were "interchangeable." The Court concluded that "the arrangement of stripes, chevrons, color blocks, and zigzags are 'wholly unnecessary to the performance of' the garment's ability to cover the body, permit free movement, and wick moisture" and are therefore copyrightable subject matter.

A copy of the decision is available here:Varsity Brands app decision.pdf

November 12, 2015

Naruto v Slater Monkey Selfie Decision

By Barry Werbin

Here is a must-distribute 4-page brief (Naruto v. Slater dismissal brief.pdf) in support of dismissal filed by the defendant photographer Slater in the pending action brought by PETA in the N. D. Cal. on behalf of the monkey selfie "photographer." Slater originally set up the monkey to take a "selfie" and has since tried to no avail (and properly so) to enforce his claimed copyright in the resulting photo. Nevertheless, here PETA has alleged standing on behalf of the monkey, and Slater's short brief is magnificent, commencing with this opening paragraph:

"A monkey, an animal-rights organization and a primatologist walk into federal court to sue for infringement of the monkey's claimed copyright. What seems like the setup for a punchline is really happening. It should not be happening. Under Cetacean Community v. Bush, 386 F.3d 1169 (9th Cir. 2004), dismissal of this action is required for lack of standing and failure to state a claim upon which relief can be granted. Monkey see, monkey sue is not good law - at least not in the Ninth Circuit."

January 27, 2016

Hip Hop Artist's Copyright Ownership Claim Time Barred

By Barry Werbin

Hip hop artist Tyrone Simmons could not rap his way out of his delay in pursuing a claim of ownership of exclusive copyright licensing rights against hip hop producer William C. Stanberry, Jr., rapper 50 Cent, and several entities that had been involved with producing and distributing a song called "I Get Money" that was released in 2007. On January 15, 2016, the Second Circuit held (per curium) in Simmons v. Stanberry, that Simmons' claim was time-barred under the Copyright Act's three year statute of limitations because he became aware of Stanberry's repudiation of his license rights and release of the song more than three years before suit was filed.(2d Cir. 1/15/2016)

The Court applied its prior decision on copyright ownership in Kwan v. Schlein (634 F.3d 224 (2d Cir. 2011)), where it held that where a claim for ownership was time-barred, so too were any attendant infringement claims. The Court held that the exclusive license allegedly held by Simmons was legally equivalent to copyright ownership because Section 101 of the Copyright Act "recognizes that an exclusive license is effectively a transfer of ownership over the rights licensed. The Act includes exclusive licenses among the list of transactions that can effect a "transfer of copyright ownership...."

The case reinforces the risk of delay in pursuing claims of copyright ownership in the face of an express repudiation of rights. It further highlights the distinction as to how the Copyright Act's three year statute of limitations is applied differently with respect to ownership claims versus infringement claims. With respect to infringement claims where ownership is not in issue, the three year limitations period only bars damages going back more than three years preceding the filing of the complaint, where an infringement is ongoing.

May 3, 2016

Cert. Granted in STAR ATHLETICA, L.L.C. V. VARSITY BRANDS, INC., ET AL.

By Barry Werbin

The Supreme Court just accepted certiorary in the cheerleader uniform case, STAR ATHLETICA, L.L.C. V. VARSITY BRANDS, INC., ET AL. The question addresses the appropriate test to use to determine whether features of a useful article are protected. This is surprising, but very significant for the entire apparel industry.

http://www.scotusblog.com/case-files/petitions-were-watching/

This is the special question the Court accepted (from the petition):

QUESTIONS PRESENTED

1. Under the Copyright Act, a "useful article" such as a chair, a dress, or a uniform cannot be copyrighted. 17 U.S.C. § 101. The article's component features or elements cannot be copyrighted either, unless capable of being "identified separately from, and . . . existing independently of, the utilitarian aspects of the article." Id. Circuit courts, the Copyright Office, and academics have proposed at least nine different tests to analyze this separability. The Sixth Circuit rejected them all and created a tenth. The first question is:

What is the appropriate test to determine when a feature of a useful article is protectable under § 101 of the Copyright Act?

August 11, 2016

Writers of Marvin Gaye's "Let's Get It On" Get It On Against Ed Sheeran

By Barry Werbin

Well this time around it's not the Marvin Gaye Estate pursuing a high profile infringement claim, as it did successfully last year against Robin Thicke and Pharrell Williams over Blurred Lines (on appeal in the Ninth Circuit). Now, the heirs of one of the two songwriters (Ed Townsend, the other co-writer being Gaye) of the great R&B classic "Let's Get It On", made famous by Gaye's iconic 1973 recording, has sued UK pop singer/songwriter Ed Sheeran, his co-writer, Sony/ATV and others in the Southern District of New York for copyright infringement over Sheeran's 2014 hit recording "Thinking Out Loud". The Townsend heirs allege that they own 100% of the copyright in the "Let's Get It On" musical composition.

The complaint alleges that Sheeran's song, which rose to the top of the charts in the US and UK and was nominated for a Grammy, copied the core "harmonic, melodic, and rhythmic elements" of "Let's Get It On." In particular, the complaint alleges that the "prominence of the bass line and drum composition throughout Let's [Get It On] make these compositional elements qualitatively important to the musical work as a whole. The combination of these elements is the driving force of this composition."

Sheeran and the other defendants are further alleged to have willfully infringed "Let's Get It On" because they were notified of the infringement claim by email or phone in April 2015 but continued to exploit the song thereafter.

Make your own assessment of substantial similarity and feel free to comment. Compare the two songs at https://www.youtube.com/watch?v=x6QZn9xiuOE and https://www.youtube.com/watch?v=lp-EO5I60KA.

Interestingly, the complaint adds separate claims for false designation of origin and "reverse passing off" under the Lanham Act based on false representations to the public that the defendants created and were the authors of "Thinking Out Loud", causing public confusion. While I try to be objective in these postings, this claim sounds like a real stretch, as Sheeran and his co-author presumably did in fact write "Thinking Out Loud", even if it turns out to be infringing. These claims face a similar challenge as the copied work did in Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23 (2003), where the Court held that the phrase "origin of goods" in the Lanham Act "refers to the producer of the tangible goods that are offered for sale, and not to the author of any idea, concept, or communication embodied in those goods." Id. at 37. In Dastar, the producer of the copied TV series was the "origin" for Lanham Act purposes, barring a claim by the original creator of the series for false designation of origin. Justice Scalia wrote that Section 43(a) of the Lanham Act "prohibits actions like trademark infringement that deceive consumers and impair a producer's goodwill," but that "[t]he words of the Lanham Act should not be stretched to cover matters that are typically of no consequence to purchasers."

Kathryn Townsend Griffin, et al. v. Edward Sheeran et al., No. 1:16-cv-06309 (S.D.N.Y.), filed August 9, 2016. The plaintiffs are represented by Frank & Rice P.A. based in Florida. A copy of the complaint is here: Sheeran complaint.pdf

October 18, 2016

Second Circuit Reverses Copyright Fair Use Defense in "Hand of God" Case, but Affirms Dismissal on Standing Grounds

By Barry Werbin

While God may work in mysterious ways, in this case, the Second Circuit was anything but mysterious in taking away that which the district court had giveth by way of a copyright fair use defense to the producers of the Broadway show "Hand of God" for their use of the famous Abbott & Costello "Who's on First?" comedy skit (the Routine) in a portion of the show. In an important opinion issued on October 11, 2016, the Court reversed the trial court's finding that the defendants' verbatim use of more than a minute of Abbott and Costello's iconic comedy routine in a scene in "Hand to God" involving the lead character (Jason) and his hand puppet (who in the play lies about the origin of the Routine), as well as its use in a promotional video clip, qualified as a non‐infringing fair use. In its opinion, the Court clarified the limits of transformative use, cutting back on what had been viewed by many practitioners as an increasingly expanded application of that concept in fair use cases.

In granting the defendant's motion to dismiss in TCA Television Corp. v. McCollum, 151 F. Supp. 3d 419 (S.D.N.Y. 2015), the district court had found that use of the skit in the play was "highly transformative" as to support a fair use defense because "by having a single character perform the Routine, the Play's authors were able to contrast 'Jason's seemingly soft‐spoken personality and the actual outrageousness of his inner nature, which he expresses through the sock puppet.'... This contrast was 'a darkly comedic critique of the social norms governing a small town in the Bible Belt.'"

The Second Circuit criticized this reasoning as being "flawed in that what it identifies are the general artistic and critical purpose and character of the Play. The district court did not explain how defendants' extensive copying of a famous comedy routine was necessary to this purpose, much less how the character of the Routine was transformed by defendants' use."

The Court emphasized that Campbell v. Acuff‐Rose Music, Inc., 510 U.S. 569 (1994) "instructs that a court properly considers 'whether the new work merely supersedes the objects of the original creation, or instead adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message.'" [Emphasis in original]

Emphasizing that under the first fair use factor, the purpose and character of the use, the focus of inquiry "is not simply on the new work, i.e., on whether that work serves a purpose or conveys an overall expression, meaning, or message different from the copyrighted material it appropriates. Rather, the critical inquiry is whether the new work uses the copyrighted material itself for a purpose, or imbues it with a character, different from that for which it was created." Here, even if, as the District Court found, "Hand to God" is a "darkly comedic critique of the social norms governing a small town in the Bible Belt," and "even if the Play's purpose and character are completely different from the vaudevillian humor originally animating Who's on First?, that, by itself, does not demonstrate that defendants' use of the Routine in the Play was transformative of the original work."

The Court then reviewed its somewhat controversial decision in Cariou v. Prince, 714 F.3d 694 (2d Cir. 2013), cert. denied, 134 S. Ct. 618 (2013). Indeed, the Court acknowledged this in saying: "Insofar as Cariou might be thought to represent the high‐water mark of our court's recognition of transformative works, it has drawn some criticism." Contrasting the photographs that were altered in Cariou to the point where some were "barely recognizable," the Court emphasized that the Routine, as used in "Hand of God", was not altered at all: "The Play may convey a dark critique of society, but it does not transform Abbott and Costello's Routine so that it conveys that message. To the contrary, it appears that the Play specifically has its characters perform Who's on First? without alteration so that the audience will readily recognize both the famous Routine and the boy's false claim to having created it."

The defendants' argument, that using the Routine for such a "dramatic" rather than "comedic" purpose was transformative, was rejected by the Court because "[t]he 'dramatic' purpose served by the Routine in the Play appears to be as a 'McGuffin,' that is, as a theatrical device that sets up the plot, but is of little or no significance in itself." The lead character needed to lie about something, and the Routine was just used as the prop without changing its own essence. "Such unaltered use of an allegedly copyrighted work, having no bearing on the original work, requires justification to qualify for a fair use defense."

Similarly, the humor in the play's scene derives from the Routine itself, and the "defendants' taking is identically comedic to that of the original authors, that is, to have two performers expand on a singular joke in order to generate increasing audience laughter." As such, "there is 'nothing transformative' about using an original work 'in the manner it was made to be' used.'" Nothing in the record demonstrated that the "Play imbued the Routine with any new expression, meaning, or message", and the District Court erred in finding that it was transformative under the first Section 107 factor, which therefore weighs in favor of the plaintiffs. The commercial use of the Routine without any transformative purpose also weighed in favor of the plaintiffs because such use "duplicated to a significant degree the comedic purpose of the original work."

As for the second statutory fair use factor, "the nature of the copyrighted work," the Court found the Routine to be a creative work, which was used for dramatic effect by "perform[ing], verbatim, some dozen variations on the Routine's singular joke," thereby "provoke[ing] audience laughter in exactly the same way as the Routine's creators had done." This factor favored the plaintiffs.

The third factor, "the amount and substantiality of the portion used in relation to the copyrighted work as a whole," also "weighs strongly" in favor of the plaintiffs because the portion of the Routine used "plainly reveals the singular joke underlying the entire Routine: that words understood by one person as a question can be understood by another as an answer. Moreover, defendants repeatedly exploit that joke through a dozen variations. This manifests substantial copying."

Finally, with respect to the fourth factor, "the effect of the use upon the potential market for or value of the copyrighted work," the Court found that the "the district court disregarded the possibility of defendants' use adversely affecting the licensing market for the Routine." The Court clarified that derivative markets, while not the focus of this factor, are nevertheless not irrelevant. As the plaintiffs at the pleading stage alleged that there existed a traditional and active derivative market for licensing the Routine, this factor also would weigh in plaintiffs' favor, and the District Court erred in dismissing the complaint.

Nevertheless, the Court dismissed the complaint on the alternative ground that the plaintiffs failed to plead a valid chain of copyright ownership in the Routine, based on a tangled history of agreements and alleged assignments between Abbott and Costello and Universal Pictures Company (UPC), and then with the comedians' respective heirs and various successors in interests. The Court found that Abbott and Costello did not assign their copyrights in the Routine to UPC, but granted UPC only an exclusive, limited‐use license. As the plaintiffs' copyright standing rested entirely on a quitclaim transfer from UPC, and "the parties to the Quitclaim understood Abbott and Costello not to have transferred, but to have retained, ownership of the Routine's copyright," the plaintiffs lacked standing. The Court also rejected the plaintiffs' argument that the Routine was a work-made-for-hire, citing a 1938 radio performance of the Routine by the duo, more than two years prior to their first agreements with UPC.

Finally, the Court rejected the plaintiffs' theory that "the Routine so merged with the UPC movies in which it was performed as to become a unitary whole," finding that the Routine was an independent work that did not merge with the films, particularly where Abbott and Costello had created and performed the Routine long before the first UPC film featuring the skit was filmed, and the duo continued to perform it for years after that.

October 21, 2016

Skittles

BY Barry Werbin

Well, just when we think things can't get much weirder, the photographer who took and owns the copyright in the Skittles-in-a-bowl image that the Trump campaign used in a political advertisement opposed to taking in Syria refugees that went viral, just sued Trump et al for copyright infringement in the Northern District of Illinois. The complaint was filed on Oct. 18th. SkittlesTrump.pdf

Trump's use of the image received flack because the photographer himself was a refugee from Turkish occupation in Cyprus who had escaped to the U.K., and is deeply opposed to Trump's policies. Here's Trump's Tweet and the ad itself:

Skittles.png

November 16, 2016

Dr. Seuss Parody?

By Barry Werbin

There was an interesting new case that was filed on November 10th in the S.D. Cal. by Dr. Seuss Enterprises against a startup comics company, Comicmix LLC, which was seeking funding on Kickstarter for a Dr. Seuss-Star Trek comic mashup publication that copies many characters and background art elements from various Dr. Seuss books, along with Star Trek type characters, in an alleged parody (Seuss-Suit.pdf). The fight began when Dr. Seuss Enterprises served a take-down notice on Kickstarter, Comicmix served a counter-notice citing fair use parody, and Dr. Seuss Enterprises then filed this action for copyright infringement, false designation of origin under the Lanham Act and unfair competition.

Comicmix is looking for pro bono representation.

Here are some the works' images compared in the complaint - the prose text is different. Recall that Dr. Seuss Enterprises previously won a Ninth Circuit high profile case against Penguin over the book "The Cat NOT in the Hat! A Parody by Dr. Juice", because it satirized the OJ Simpson trial but did not parody Dr. Seuss' works themselves, leading the court to reject a parody fair use defense.

So, is this a "transformative" parody?image002.jpgimage004.png image008.png image010.jpg

December 24, 2016

John Wiley & Sons v Kirtsaeng

By Barry Werbin

On December 21st, Judge Cote (SDNY) denied Kirtsaeng's motion for attorneys' fees following the Supreme Court's reversal of the Second Circuit's prior decision, which had affirmed the District Court's initial rejection of Kirtsaeng's motion. Following a Second Circuit mandate issued on August 26, 2016, vacating the District Court's decision in light of the Supremes' reversal, Judge Cote held that Wiley was reasonable to submit its claims and that the claims were not frivolous. Judge Cote also noted that Wiley had acted in good faith.

The Supreme Court had remanded to ensure that while substantial weight could be given to the reasonableness of Wiley's litigation position, that alone should not be dispositive, and all other relevant factors had to be considered, as articulated in the SCOTUS Fogerty and 16 Casa Duse decisions.

A copy of the decision is attached at John Wiley & Sons v. Kirtsaeng.pdf. It will be interesting to see if Kirtsaeng appeals once again.

And here is new copyright case about the Grinch:

http://www.nytimes.com/2016/12/29/books/matthew-lombardo-sues-dr-seuss-enterprises-whos-holiday-grinch.html?ref=todayspaper​​

March 24, 2017

2-4-6-8, Let's Give A Cheer For Copyright: SCOTUS Holds Original Imprinted Designs On Functional Cheerleader Uniforms Are Protected By Copyright If "Separable"

By Barry Werbin
Herrick, Feinsten LLP

In Kieselstein-Cord v. Accessories by Pearl, Inc., 632 F.2d 989 (2d Cir. 1980), the Second Circuit held in a seminal decision that original artistic sculptural designs depicted on designer silver belt buckles were protectable by copyright notwithstanding the functionality of the buckles themselves, because the designs could be separated from the utilitarian function of the buckles.

It took 37 years for this issue to get to the Supreme Court, which has now held that "an artistic feature of a design of a useful article" -- in this case cheerleader uniforms-- "is eligible for copyright protection if the feature (1) can be perceived as a two- or three-dimensional work of art separate from the useful article, and (2) would qualify as a protectable pictorial, graphic, or sculptural work either on its own or in some other medium if imagined separately form the useful article." Star Athletica , LLC. v. Varsity Brands, Inc., No. 15-866 (Sup. Ct. March 22, 2017).

The Court concluded that the chevrons, curves, stripes, angles, diagonals, colors and shapes covered by Copyright Office registrations and imprinted on Varsity Brand's cheerleader uniforms met this test.
Varsity2.png

So let's break down the test, which is a refinement of existing language in the Copyright Act ("the Act") that extends protection to "pictorial, graphic and sculptural works" that are "fixed" in any "tangible medium of expression." However, because the Act excludes from protection any "useful article," §101 provides a qualification that: "the design of a useful article ... shall be considered a pictorial, graphic, or sculptural work only if, and only to the extent that, such design incorporates pictorial, graphic, or sculptural features that can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article."

While seemingly clear on its face, judges have struggled with these statutory concepts of a design's separability and existence independent from an article's otherwise utilitarian aspects. Some courts, for example, have distinguished between "physical" and "conceptual" separability, which the Supreme Court has now rejected because "physical" separability would require the useful article to remain useful after removal of the design features, whereas "separability does not require the underlying useful article to remain...." Interestingly, the U.S. Government noted in its brief that after removal of the design elements, the uniforms would remain as plain white uniforms and thus maintain their utilitarianism, a point the Court found unnecessary to address because the focus of the test is on the "extracted" design features and "not on any aspects of the useful article that remain after the imaginary extraction."

Star Athletica's argument that the Act only protects "solely artistic features" that have no effect on a useful article's utilitarian purpose was also rejected by the Court, because it would undermine copyright protection for "applied art," which, by definition, is artistic design applied to useful articles. Similarly, the Court emphasized that an artistic feature that in itself qualifies for copyright protection does not lose that protection when it is created to be applied to a useful article.
The more difficult question is what "existing independently" means in this context. The Court noted this more difficult aspect of the test in saying that the subject design feature "must be able to exist as its own pictorial, graphic, or sculptural work ... once it is imagined apart from the useful article," thus implicating "conceptual" separateness. In other words, the consideration would be whether the design is eligible for copyright protection as a "pictorial, graphic and sculptural work."

Significant reliance was placed on a 1954 decision of the Court in Mazer v. Stein, 347 U.S. 201 (1954), which was decided under the 1909 Copyright Act. Mazer involved protection for a lamp base that depicted a dancer, essentially a sculptural statuette. At the time, the Copyright Office had a regulation that extended protection to works of art that might also serve a useful purpose, which was cited in the Mazer opinion. The Mazer Court also had emphasized that it was irrelevant whether the statuette "initially was created as a freestanding sculpture or as a lamp base." In 1960, the Copyright Office incorporated these concepts in an amended regulation that introduced the concept of "separability," which was then included in the 1976 Act's definitions.

Here, the Court had little problem (with only Justice Breyer dissenting) applying its test to the surface designs on the cheerleader uniforms, finding they were readily identifiable as having pictorial, graphic or sculptural qualities, and that if separated from the utilitarian uniforms and applied in another context -- such as a "painter's canvas" -- they would constitute "two-dimensional ... works of art" under §101 of the Act. Justice Thomas noted in his majority opinion that even if the design elements fit the "contours" of the uniforms, as argued by Justice Breyer in dissent, that is not a bar to copyright because two-dimensional art often corresponds to the contours of its medium, such as a design etched or painted onto the surface of a guitar.

In a concurring opinion, Justice Ginsburg noted that Varsity Brands had used the same designs from the uniforms on other items of apparel, including tee-shirts and jackets, and that it was not necessary to expound on the separability doctrine because it was clear these designs were "themselves copyrightable pictorial or graphic works reproduced on useful articles." [Emphasis in original]

While agreeing with much of the Court's opinion, Justice Breyer felt that the designs themselves were not eligible for copyright protection because they could not be perceived as two- or three-dimensional works of art apart from the uniforms. His rationale would not extend protection to any design that would make the useful article non-functional if the design were removed from that article, or, if it would make it non-functional, could not be conceived of separately from the useful article without conjuring up the article itself. These concepts were rejected by the majority's opinion.

This author thinks that the majority opinion got this one right and calms the waters over the separability doctrine. Nevertheless, what constitutes an independently protectable "pictorial, graphic and sculptural work" will continue to present challenges. Yet as the level of originality required for copyright protection is "extremely low" and creativity only need be "minimal" under Feist Publications, Inc. v. Rural Telephone Service Co., 499 U. S. 340, 345, 358, 562 (1991), the test should not be difficult to apply. Indeed, we see all manner of modern abstract art qualifying for copyright protection that may consist of little more than a few geometric shapes and colors. This is emphasized in the Copyright Office's Compendium of U.S. Copyright Office Practices, Third Edition, which observes in §308.2 that under Feist, "[e]ven a "slight amount" of creative expression will suffice."

Few would argue that an original Mondrian geometric painting was not worthy of copyright protection, but is it that much different from the chevrons and other elements found on the cheerleader uniforms? Mondrian.jpg

https://www.guggenheim.org/artwork/artist/piet-mondrian

In another extension of Star Athletica's arguments, one could argue that the designs on the uniforms were associated with the teams that ordered them, thus rendering the designs functional as they merely represented the teams. Yet this logic would eviscerate copyright protection for all original team logos that constitute artistic designs, many of which are famous, such as the NY Yankees' "top hat" logo.

Yankees.pngIndeed, this was the subject of a 2012 Second Circuit decision addressing ownership of the copyright in this very logo. Buday v. New Yankees Partnership, 486 F. App'x 894 (2d Cir. 2012). The Yankees won... again.

nysbar.com/blogs/EASL/Star%20Athletica%20v.%20Varsity%20Brands%20-%20slip%20op%20S%20Ct%203.22.17.pdf"

March 30, 2017

Cert denied in Capital Records v. Vimeo

By Barry Werbin

On Monday, March 17th, the Supreme Court denied cert in Capital Records v. Vimeo, thereby leaving intact the Second Circuit's 2016 decision (826 F.3d 78 (2d Cir. 2016)) finding that the DMCA does apply to pre-1972 sound recordings to protect compliant providers from copyright claims under state laws.

April 3, 2017

We Know That A Monkey Can't Own a Copyright, But Can a Computer?

By Barry Werbin

IBM's Watson supercomputer created its own video trailer for the upcoming film thriller called "Morgan" about an AI robot child who rebels. It's creative and haunting. Who owns the copyright in the trailer, if there is one....? Watch the trailer and IBM commentary: https://techcrunch.com/2016/09/01/this-trailer-made-by-ibms-watson-proves-ai-knows-how-to-creep-you-out/

April 4, 2017

5Pointz

By Barry Werbin

On Friday March 31st, the Eastern District of New York in Cohen v. G&M Realty issued a decision allowing the plaintiff artists in the high profile 5Pointz graffiti art mural case (filed in 2013) to go to trial, finding that the artists demonstrated they were harmed by the building's demolition under the Visual Artists Rights Act (VARA). In particular, Judge Block found that the question of "recognized stature" under VARA was clearly a factual one for the jury, which would assess the plaintiffs' expert's report and testimony at trial.

The court also dismissed the defendants' counterclaim for abuse of process. The plaintiffs' separate claims for conversion, property damage, and intentional infliction of emotional distress were also dismissed: Cohenv.G&MRealty.pdf

June 24, 2017

Cert. Denied in Dancing Baby DMCA case

By Barry Werbin

On June 19th, SCOTUS denied cert., refusing to hear the Dancing Baby DMCA case, Stephanie Lenz v. Universal Music Corp, leaving the Ninth Circuit's controversial decision intact. The U.S. Solicitor General, whose opinion the Court requested, took the position that while the Ninth Circuit's opinion reflected "significant legal error" the case was "not a suitable vehicle for correcting that mistake."

http://www.hollywoodreporter.com/thr-esq/supreme-court-turns-down-dancing-baby-copyright-case-1014641

https://www.nytimes.com/aponline/2017/06/19/us/politics/ap-us-supreme-court-dancing-baby-video.html?mcubz=2&_r=0

It now goes back to the District Court to now apply the Ninth Circuit's directive and assess whether there was a subjective good faith belief that there was no fair use defense.

September 11, 2017

"We Shall Overcome" in the Public Domain

By Barry Werbin

In a significant decision issued on Friday (We Shall Overcome opinion.pdf), Judge Denise Cote granted summary judgment in favor of the class action plaintiff organizations against the owners of the publishing rights to Pete Seeger's iconic civil rights song "We Shall Overcome," finding that the original 1948 copyrighted version of the sheet music (with lyrics), which was owned by Seeger's company, People's Songs, Inc. ("PSI") and had fallen into the public domain in 1976, was not sufficiently different from the core portions of later versions recorded in 1960 and 1963, in which derivative copyrights were claimed by the defendant music publishers. Judge Cote agreed with the plaintiffs "that the lyrics and melody in the first verse and its identical fifth verse ("Verse 1/5") of the Song are not sufficiently original to qualify for copyright registration as a derivative work." The opinion goes through a detailed, lengthy history of the song's genesis.

The song likely originated from an old spiritual that Zilphia Horton learned from striking tobacco workers in South Carolina in the early 1940s. Seeger learned a version of the song from Horton. In 1960, defendant Ludlow Music, Inc. registered a copyright in the sheet music for a claimed derivative version of the song, listing Horton as a co-author with two others (but not Seeger). In 1963, Ludlow obtained a second registration that identified Seeger, along with Horton and the others, as the authors of "New words and music adaption."

The court found only minor differences between the 1948 public domain PSI sheet music version and the later versions registered in 1960 and 1963. Specifically, the words "I will overcome" were changed to "I shall overcome" and the phrase "down in my heart" was changed to "deep in my heart." Two small music changes were also noted, described by Judge Cote as follows:

In both versions of the Song the differences occur during the melodic descent from note "A" to "E" during the singing of the word "overcome." Specifically, the descent from "A" to "E" begins one beat later in the Copyrighted Song, and an eighth note "F" is added between notes "G" and "E" in the second measure. This also changes the rhythm of the second measure. The second difference appears in the seventh measure. In both versions, the melodic descent is from note "D" to "G" during the singing of the word "someday," which is sung over measures six to eight. The Copyrighted Song adds a flourish or trill during this descent, while the word "day" is being sung. The trill consists of three eighth notes "A - B - A."

The court initially rejected any presumption of validity of the 1960 and 1963 copyright registrations because of erroneous information submitted to the Copyright Office about the derivative nature and authorship of those works.

On the core issue of similarity with the 1948 PSI public domain version and the enforceability of the 1960 and 1963 versions as independent derivative works, Judge Cote held "that the melody and lyrics of Verse 1/5 of the Song are not sufficiently original to qualify as a derivative work entitled to a copyright. As a matter of law, the alterations from the PSI Version are too trivial. A person listening to Verse 1/5 of the Song would be hearing the same old song reflected in the published PSI Version with only minor, trivial changes of the kind that any skilled musician would feel free to make. As §101 of the Copyright Act teaches, a judgment about modification to an original work must be based on a consideration of the derivative work 'as a whole.'"

September 13, 2017

Update on the "Monkey Selfie" Litigation

By Barry Werbin

A settlement was reached and the parties filed a joint motion to dismiss the pending a Ninth Circuit appeal. Part of the settlement requires Slater, the photographer, to donate 25% of any future proceeds from the monkey selfie pictures to organizations that protect macaque monkey habitats in Indonesia.

However, the really interesting provision is a joint request that the Ninth Circuit vacate the District Court's ruling, which dismissed the claim based on lack of standing because animals cannot copyright works they create. The rationale, as expressed in the motion, is that Naruto-- the selfie photogenic macaque at center stage--was not a party to the case (which PETA brought on Naruto's behalf) and therefore, as PETA urges, "it would be just and proper to not bind Plaintiff Naruto by the judgment...." and that "Naruto should not be 'forced to acquiesce' to the district court's judgment that he lacks standing under the Copyright Act where the appeal will be mooted by an agreement by PETA and PETA's Next Friend Case status is contested and undecided." Therefore, the Ninth Circuit will need to buy in to monkeys having legal standing to sue to protect some enforceable interest.

Of course PETA doesn't want the negative precedent to remain of record. Yet "forced to acquiesce" takes it a bit far (in my opinion).

Here is a copy of the parties' joint motion to dismiss the appeal and vacate the judgement: Naruto-Settlement.pdf

December 14, 2017

Federal Courts Not Empowered to Cancel Copyright Registrations

By Barry Werbin

A new December 5, 2017, Southern District of New York (SDNY) decision by Judge Oetken holds that federal courts are not empowered by the Copyright Act or any other federal statute to cancel or nullify a copyright registration issued by the Copyright Office. The court held that: "Nothing in the Copyright Act, nor any other federal statute, grants federal courts the power to cancel or nullify a copyright registration." A copy of the decision is available here: Pastime decision.pdf. Pastime LLC v. Schreiber (S.D.N.Y. 12/5/17).

The case arose out of a copyright authorship/ownership dispute over a play entitled "Once Upon a Pastime." A registration was owned by defendant Schreiber listing him as "sole author," but Pastime argued that an employment agreement with Schreiber deemed the book to be a work made for hire for Pastime. Pastime filed a declaratory judgment action, alleging that "Schreiber intentionally falsified the writing and ownership information in his copyright registration application." Schreiber moved to dismiss the complaint for failure to state a claim under FRCP 12(b)(6) and for lack of subject matter jurisdiction.

The court adopted the reasoning of the Third Circuit:

As the Third Circuit explained in Brownstein v. Lindsay, "there is evidence that the statute does not give courts any such authority" because "[s]ection 701, which describes the functions of the Copyright Office, explicitly states that '[a]ll administrative functions and duties under this title, except as otherwise specified, are the responsibility of the Register of Copyrights.'" 742 F.3d 55, 75 (3d Cir. 2014) (alterations in original) (quoting 17 U.S.C. § 701(a)). Furthermore, it is significant that a separate section of the Copyright Act does grant federal courts the authority to cancel registrations for "original designs." See id. at 76; 17 U.S.C. § 1324. This Court joins the Brownstein court's conclusion that "§ 1324 would be superfluous if Congress intended for courts to already have the general authority to cancel copyright registrations," and that "[i]n carving out a specific power of cancellation, this provision only further suggests that courts have no general authority to cancel copyright registrations." Brownstein, 742 F.3d at 76.

Although Schreiber also argued that a "fraud on the Copyright Office" claim was alleged for which "there is no affirmative private right of action," Judge Oetken rejected that interpretation of the complaint because Pastime itself had waived it by characterizing its complaint as one "for a declaration of the parties' respective ownership rights in [the musical], and for cancellation of [Schreiber's] copyright registration." Judge Oetken observed: "As a result, the Court finds it unnecessary to opine at length on the existence of a cause of action that Pastime has explicitly waived. The Court notes, however, that the absence of a cause of action for fraud on the Copyright Office comports with the absence of a cause of action for cancellation of a copyright registration."

The complaint was dismissed as to the registration cancellation claim. The court emphasized, however, that courts have authority to invalidate underlying copyrights, including a "determination of ownership which does not disturb the registration of a copyright."

The other work for hire claim survived, as there was an actual controversy and such determination invoked the "interpretation and application of the Copyright Act's 'works made for hire' provision" to support subject matter jurisdiction.


January 4, 2018

California Decision Undercutting Copyright in Video Games

By Barry Werbin

On this stormy wintry day, what better to cheer one up than an odd decision from the CD Cal. In a December 11th decision, the court ruled on a motion to dismiss by EA based on copyright preemption tied to right of publicity claims by college athletes whose avatars appeared in Madden video games. EA argued that the case, which was filed in Cal. state court and then removed, should be dismissed based on the 9th Circuit's decision last April in Maloney v. T3Media, Inc., 853 F.3d 1004 (9th Cir. 2017), holding that state law claims for right of publicity brought by student athletes was preempted under the Copyright Act (the athletes' images did not appear in advertising or marketing materials).

However, rather than granting the motion based on Maloney, this District Court, while agreeing that video games generally were copyrightable (EA held registrations for the subject games), ruled that the changing game play that was controllable by players did not meet the "fixation" test, which seems really bizarre:

Here, game play in the Madden games is dynamic, interactive, variable, and in the hands of the consumer. Plaintiffs contend the avatars allegedly representing their likenesses even have performance characteristics representing plaintiffs' own capabilities in their time as active NFL players. While recordings of actual football games are subject to copyright notwithstanding the independent actions of players during the course of the games, such recordings satisfy the requirement of copyright that the work be "fixed" in a tangible medium of expression. See Dryer v. Nat'l Football League, 814 F.3d 938, 942 (8th Cir. 2016) ("Although courts have recognized that the initial performance of a game is an 'athletic event' outside the subject matter of copyright. . . the Copyright Act specifically includes within its purview fixed recordings of such live performances."); 17 U.S.C. § 101. The Madden games, in contrast, allow game play that is not fixed in a tangible medium of expression, and part of plaintiffs' claims is that their identities are reflected in that game play. Thus, Maloney, which involved fixed photographs, does not govern here and the motion to dismiss must be denied. [Emphasis added]

Yes Maloney did involve reproductions of player photographs that could be downloaded by end users. Yet to rule that changing video game screen displays and output are not sufficiently fixed -- when whatever appears on-screen is the direct product of software and is thus limited in the visual iterations that can be displayed -- seems off base.

A copy of the decision is available here: https://dlbjbjzgnk95t.cloudfront.net/0993000/993656/https-ecf-cand-uscourts-gov-doc1-035116175407.pdf

February 13, 2018

5Pointz Decision

By Barry Werbin

Yesterday's decision by Judge Block (51 pages plus images of all the art) awarded the 5Pointz aerosol artists maximum statutory damages of $150,000 for all 45 works in issue. Judge Block was clearly perturbed by developer Gerald Wolkoff's attitude, emphasizing: "If not for Wolkoff's insolence, these damages would not have been assessed."

It will be interesting to see how this fares before the Second Circuit, which has never ruled on a VARA case substantively as to the test and required evidence for a "recognized work", and of course on damages.

gov.uscourts.nyed.370997.69.0.pdf

April 12, 2018

ABKCO Music Inc. et al. v. William Sagan et al.

By Barry Werbin

In a closely watched case, Judge Ramos ruled on April 9th that the concert archive's streaming of archival concert footage and music constituted copyright infringement, and that Section 115 of the Copyright Act did not include audiovisual recordings within its compulsory mechanical license provisions (the latter requiring synchronization licenses). The court also found that Wolfgang's Vault, operated by Bill Graham Archives LLC, which owned legal title to the recordings, did not produce evidence that it held valid licenses or other rights from the artists themselves to stream the live concert performances. Summary judgment of infringement was therefore granted for the plaintiffs.

The action was filed in 2015 by a group of music publishers, alleging that approximately 200 concert recordings, of which about 146 were audiovisual works, were not licensed for streaming, consisting collectively of "more than 1,175 recordings of Plaintiffs'." Injunctive relief, however, was not granted, because money damages were found to be adequate and, as Judge Ramos concluded: "Licensing issues notwithstanding, the Court finds that the public's interest in having access to these recordings counsels against the imposition of a permanent injunction."

A copy of the lengthy opinion is attached (with confidential facts blackened out). ABKCO Music Inc. et al. v. William Sagan et al., No. 1:15-cv-04025 (S.D.N.Y. April 9, 2018).ABKCO Music Inc. et al. v. William Sagan.pdf

April 16, 2018

Ninth Circuit Shuts Down PETA in the "Monkey Selfie" Appeal

By Barry Werbin

A skeptical three-judge panel from the Ninth Circuit grilled PETA at oral argument over the appeal of the previously settled and unusual re-awakening of the "Monkey Selfie" case.

While PETA discontinued its case on stipulation, it did so only after losing on standing and then filing an appeal. The Ninth Circuit has now used its discretion to deny the parties' joint motion to dismiss the appeal as moot, finding that under Fed. Appellate Rule 42, appellate courts, "an appeal may be dismissed on the appellant's motion on terms agreed to by the parties or fixed by the court," but may chose not to where important policy or other significant matters deserve a court's ruling, including the need for a ruling "to curtail strategic behavior" and where "the investment of public resources already devoted to this litigation will have some return."

The Ninth Circuit found that such circumstances were present here, as to whether animals have standing (to bring a copyright claim) and strategic behavior to avoid a ruling on appeal, observing that "'courts must be particularly wary of abetting 'strategic behavior' on the part of institutional litigants whose continuing interest in the development in the law may transcend their immediate interest in the outcome of a particular case.'"

A copy of the Ninth Circuit's Order filed April 13 is here:E.C.F. 9th Cir. 16-15469.pdf

March 14, 2019

Dr. Seuss Enterprises v. ComixMix

By Barry Werbin

There was a significant S.D. Cal. March 12th decision in the long running Dr. Seuss Enterprises v. ComixMix case, which granted ComixMix summary judgment on the copyright infringement claim, finding that the defendant's mashup of content from various Seuss works (including Oh, the Places You'll Go! ("Go!")) and Star Trek episodes, entitled Oh, the Places You'll Boldly Go! ("Boldly"), was entitled to a fair use defense, despite it not being a parody. The court found that Go! was highly transformative and that Seuss Enterprises failed to establish a non-hypothetical likelihood of market harm.

On transformative use, the court found that "the copied elements are always interspersed with original writing and illustrations that transform Go!'s pages into repurposed, Star-Trek-centric ones.... Defendants did not copy verbatim text from Go! in writing Boldly, nor did they replicate entire illustrations from Go! Although Defendants certainly borrowed from Go!--at times liberally--the elements borrowed were always adapted or transformed."

The court also found that Boldly had a different "intrinsic purpose and function" than that of Go!, " i.e., "providing an illustrated book, with the same uplifting message that would appeal to graduating high school and college seniors.... While Boldly may be an illustrated book with an uplifting message (something over which Plaintiff cannot exercise a monopoly), it is one tailored to fans of Star Trek's Original Series."

On the third fair use factor, the court held that "portions of the old work are incorporated into the new work but emerge imbued with a different character" and that "Defendants took no more from the Copyrighted Works than was necessary for Defendants' purposes, i.e., a 'mash-up' of Go! and Star Trek."

Finally, on the fourth market harm factor, the court found that Seuss Enterprises "failed to sustain its burden to demonstrate by a preponderance of the evidence that Boldly is likely substantially to harm the market for Go! or licensed derivatives of Go!.... [The] potential harm to [Plaintiff]'s market remains hypothetical."

DSE-v-ComicMix-Summary-Judgment-Order.pdf

About Barry Werbin

This page contains an archive of all entries posted to The Entertainment, Arts and Sports Law Blog in the Barry Werbin category. They are listed from oldest to newest.

Kristine Sova is the previous category.

Martha Nimmer is the next category.

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