Arizona Internet Law Blog

Protect Your Business Work Product: Copyright

2011-08-04T09:25:00.001-07:00

USI MidAtlantic, Inc. suffered a $22.5 million judgment for copyright infringement from competitor. A former employee of the competitor joined MidAtlantic and supplied them with binders of information about insurance products created by his former employer. Most lawyers would look to confidentiality agreements and trade secrets, but Graham, the competitor, had done something even better: they copyrighted the material. When MidAtlantic copied language from the binders into over 800 client proposals, they were found to indirectly infringe the copyrights.Graham recovered profits attributable to USI MidAtlantic's infringement, plus prejudgment interest.

The lesson? Copyright can be used to protect business work product. The plaintiff proved lost profits: their task may have been easier if they had promptly registered their copyrights.

The big legal issue in the case how far back can copyright damages go? Three years is the statute of limitations. The issue is, though, whether the statute of limitation runs three years from discovery or from when the claim "accrued," e.g. "occurred." Under the injury rule, a claim accrues, and the statute of limitations begins to run, when the plaintiff suffers the injury. If the discovery rule applies, the claim arises when the plaintiff discovers, or with reasonable diligence should have discovered, the injury. The difference: in this case the shorter limit resulted in $2 million in damages, the longer $20 million.

The Third Circuit went with the Discovery Rule. "Although we have not previously addressed this issue, eight of our sister courts of appeals have applied the discovery rule to civil actions under the Copyright Act. See Warren Freedenfeld Assocs., Inc. v. McTigue, 531 F.3d 38, 44-46 (1st Cir.2008); Comcast v. Multi-Vision Elecs., Inc., 491 F.3d 938, 944 (8th Cir.2007); Roger Miller Music, Inc. v. Sony/ATV Publ'g, LLC, 477 F.3d 383, 390 (6th Cir.2007); Polar Bear Prods., Inc. v. Timex Corp., 384 F.3d 700, 705-07 (9th Cir.2004); Gaiman v. McFarlane, 360 F.3d 644, 653 (7th Cir.2004); Lyons P'ship, L.P. v. Morris Costumes, Inc., 243 F.3d 789, 796 (4th Cir.2001); Daboub v. Gibbons, 42 F.3d 285, 291 (5th Cir.1995); Stone v. Williams, 970 F.2d 1043, 1048 (2d Cir.1992)."

Defense, it seems, often relies on some shred of hope in some case somewhere. On this issue, it is a New York District Court case that gives copyright defendants hope to limit the limitations to accrual. Auscape Int'l v. Nat'l Geographic Soc'y, 409 F.Supp.2d 235, 247 (S.D.N.Y.2004). And defendants want to broaden a Supreme Court case on FCRA statute of limitations to copyright. TRW Inc. v. Andrews, 534 U.S. 19, 122 S.Ct. 441, 151 L.Ed.2d 339 (2001). That dog, it seems, won't hunt.

Here is the Third Circuit case: WILLIAM GRAHAM COMPANY v. HAUGHEY USI

Protect Your Business Work Product: Copyright

2011-08-04T09:25:00.000-07:00

CD's? CD's still exist? The law tries to catch up . . .

2011-02-07T08:11:00.001-08:00

The trouble with technology and the law is that technology moves fast; the law does not.

So, finally a ruling on whether promotional music compact discs can be resold without violating copyright. The answer? Yes, because of the first-sale doctrine. UMG Recordings, Inc. v. Augusto, Case No. 08-55998 (9th Cir., Jan. 4, 2011) (Canby, J.).

UMG Records distributed promotional CDs. They sent them to critics, radio personnel, and others for promotion. Of course, they claimed the cd was only for those to whom they sent them: acceptance of the cd is a license; not for resale; promotional use only; resale or transfer is not allowed and may be punishable under federal and state laws. Very imposing.

I had always wondered, since way back in the day, when a local general manager of a Fort Wayne tv/radio empire gave me a new Iggy Pop album sent to them for promotion, whether I had been the unwitting recipient of a copyright violation or some kind of crime. Cal wasn't worried; but, I never wanted to risk my neck for Iggy Pop.

The question is answered. Despite the warning of the Dire Wolf on the recordings sent, unsolicited and for free, we need not beg "don't murder me record company, please don't murder me," although Mr Augusto was dragged to the Ninth Circuit. His sin? Ebay.

The district court granted Augusto summary judgment finding his sale on Ebay of Big Bad Record Company's promotional cd's permissible under the first-sale doctrine. Lawfully acquiring title of a copyrighted work gives one the permission to transfer, sell, or dispose of that work without permission from the copyright owner. That's the first sale doctrine (which says the second sale is not a copyright violation).

The Supreme Court created the first sale doctrine, which is very simple. Once you buy a car, you can resell it at any price. Why should copyright differ? In Bobbs-Merrill Co. v. Straus, 210 U.S. 339 (1908), the Supreme Court said it should not. Describing its own case, the Supreme Court explained: "In that case, the publisher, Bobbs-Merrill, had inserted a notice in its books that any retail sale at a price under $1.00 would constitute an infringement of its copyright. The defendants, who owned Macy’s department store, disregarded the notice and sold the books at a lower price without Bobbs-Merrill’s consent. We held that the exclusive statutory right to vend applied only to the first sale of the copyrighted work..."

The Big Bad Record Company said its distribution of promotional CDs constituted a license and not a “sale,” pointing to its promotional statements on the CDs. But, the first-sale doctrine applies not only to a sale, but also to any transfer after the copyrighted work being placed in the stream of commerce. And, as any contract law 101 would teach, the free, unsolicited distribution did not create a license. And the commentators had explained that "first sale" really means "first transfer:" Although this statutory limitation is commonly referred to as the first sale doctrine, its protection does not require a "sale." The doctrine applies after the "first authorized disposition by which title passes." 2 Nimmer § 8.12[B][1][a]. This passing of title may occur through a transfer by gift. See 4 William F. Patry, Patry on Copyright § 13:15 ("Since the principle [of the first sale doctrine] applies when copies are given away or are otherwise permanently transferred without the accoutrements of a sale, 'exhaustion' is the better description."); 2 Paul Goldstein, Goldstein on Copyright § 7.6.1 n.4 (3d ed.) ("[A] gift of copies or phonorecords will qualify as a 'first sale' to the same extent as an actual sale for consideration.").

Best of all, there is a Unordered Merchandise Statute. Because the discs were unordered merchandise, the recipients were free to “retain, use, discard, or dispose” of them as they saw fit under the Unordered Merchandise Statute." That statute does, indeed, make unordered merchandise a gift. Kudos to the defense lawyers for this research.

The 9th Circuit dismissed the infringement claim. I am safe for receiving Iggy Pop. And future lawyers will try to understand what was a cd . . .

CD's? CD's still exist? The law tries to catch up . . .

2011-02-07T08:11:00.000-08:00

Fees . . fees. . . fees . .

2010-04-05T18:15:00.001-07:00

Section 505 of the Copyright Act provides:

In any civil action under this title, the court in its discretion may allow the recovery of full costs by or against any party other than the United States or an officer thereof. Except as otherwise provided by this title, the court may also award a reasonable attorney's fee to the prevailing party as part of the costs.

Seems simple.

The court has two tasks in applying §505: first, deciding whether an award of attorney's fees is appropriate and, second, calculating the amount of the award.

Simple again.

When is an award appropriate? One must be a "prevailing party," meaning that ". . . one has to be awarded some relief by the court. Id. at 603, 121 S.Ct. 1835. The key inquiry is whether some court action has created a “material alteration of the legal relationship of the parties.” Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep't of Health & Human Res., 532 U.S. 598, 604, 121 S.Ct. 1835, 149 L.Ed.2d 855 (2001).

So, once one prevails, the analysis goes on because, even if a plaintiff or defendant "prevails," the Supreme Court in rejected a rule requiring attorneys' fees in copyright infringement cases as a matter of course, instead leaving the question of attorneys fees to the discretion of district courts. Fogerty v. Fantasy, Inc., 510 U.S. 517, 114 S.Ct. 1023, 127 L.Ed.2d 455 (1994). The Supremes ruled that “attorneys' fees are to be awarded to prevailing parties only as a matter of the court's discretion.”).

So, how does a Court determine its discretion? The Ninth Circuit tells the Court to look at factors. Five factors. They are:

(1) the degree of success obtained;
(2) frivolousness;
(3) motivation;
(4) objective unreasonableness (both in the factual and legal arguments in the case); and
(5) the need in particular circumstances to advance considerations of compensation and deterrence.

But, remember: the applicable standard depends on the statute, and Section 505 simply authorizes fee awards to the prevailing party.

Fees . . fees. . . fees . .

2010-04-05T18:15:00.000-07:00

Derivative Works Exception

2009-09-09T09:24:00.001-07:00

Here is a corner of copyright law: the Derivative Works Exception. 17 U.S.C. §203(b)1), the Derivative Works Exception, presents a defense to a claim of infringement. It provides that a derivative work prepared under the terms of a license “may continue to be utilized under the terms of the [license] after its termination.”

The Supreme Court explained in Mills Music, Inc. v. Snyder, 469 U.S. 153 (1985), that “an entitlement to continue to distribute derivative works under the Derivative Works Exception depends on the terms of the license.” Who's Sorry Now? That is the song which is the subject of the Mills Music case. It's author sold the renewal rights in the song to Mills Music and received an advance and 50% of future revenues on reproductions and a fee on sheet music. The author died, and his estate cancelled the transfer, causing almost all the rights in the copyright to revert to the estate. The exception? Under §304(c)(6)(A), a "derivative work prepared under the authority of the grant before its termination may continue to be utilized under the terms of the grant after its termination." There were many sound recording of "Who's Sorry Now," so the dispute was about who received the continuing royalties from the recordings. The result? Since the recordings had been "prepared under authority of the grant" from the author to petitioner, the terms of the agreement that had been in effect prior to the termination governed the record companies' obligation to pay royalties, and that under those agreements petitioner and respondents were each entitled to a 50 percent share in the net royalty.

What about architectural drawings? In a new case, Architettura licensed its site plans for an apartment complex in Fort Worth to the developer. Ultimately, another architect was chosen. Architettura wanted to be paid for its work, but the developer refused. Architettura claimed infringement. It was undisputed that Architettura owned the work and could revoke any licenses, which it did; but, the Court found that if another firm had used their work while developing the site plan, the new work was a derivative work. And the Plaintiff has a "Who's Sorry Now" problem. They argued that the Derivative Works Exception did not apply to a revocable license of limited duration, as here, but should only be applied to a statutory termination, as in Mills. The Court disagreed.

The lesson? Beware of derivative works if you license a copyright.

Derivative Works Exception

2009-09-09T09:24:00.000-07:00

Who Gets Attorneys' Fees in Copyright Case?

2009-08-26T09:35:00.001-07:00

Failure to register a copyright keeps a copyright plaintiff from obtaining attorneys' fees and statutory damages. One has to register to proceed with litigation; but, registration of a copyright only allows statutory damages and attorneys' fees for infringements occurring after the registration. Section 412 of the Copyright Act provides that registration is a prerequisite for statutory damages and attorneys fees. Statutory damages and attorneys fees are governed by Sections 504 and 505 of the Copyright Act.

John Fogerty of Creedence Clearwater Revival helps us on this issue. He penned "Run Through the Jungle," and then sold its rights to Fantasy, Inc. Later, he penned "The Old Man Down the Road," and Fantasy sued, claiming "Old Man" was the same as "Jungle." A jury said Fantasy was wrong, and that they were different songs. Mr Fogerty, of course, requested attorneys' fees. His request was denied because Fantasy's infringement suit was not brought frivolously or in bad faith as required by the Ninth Circuit for an award of attorney's fees to a successful defendant. The Ninth Circuit standard for awarding attorney's fees treated successful plaintiffs and successful defendants differently. Under that standard, commonly termed the "dual" standard, prevailing plaintiffs were generally awarded attorney's fees as a matter of course, while prevailing defendants had to show that the original suit was frivolous or brought in bad faith.

In contrast, some other circuits followed the so called "evenhanded" approach in which no distinction was made between prevailing plaintiffs and prevailing defendants. The Court of Appeals for the Third Circuit, for example, had ruled that "we do not require bad faith, nor do we mandate an allowance of fees as a concomitant of prevailing in every case, but we do favor an evenhanded approach." Lieb v. Topstone Industries, Inc., 788 F. 2d 151, 156 (CA3 1986).

The Supreme Court took the Fogerty case (Fogerty v. Fantasy, Inc. (92-1750), 510 U.S. 517 (1994)), noting that: "The Copyright Act of 1976, 17 U.S.C. § 505 provides in relevant part that in any copyright infringement action 'the court may . . . award a reasonable attorney's fee to the prevailing party as part of the costs.' The question presented in this case is what standards should inform a court's decision to award attorney's fees to a prevailing defendant in a copyright infringement action--a question that has produced conflicting views in the Courts of Appeals."

It is the general rule in this country that unless Congress provides otherwise, parties are to bear their own attorney's fees. Alyeska Pipeline Co. v. Wilderness Society, 421 U.S. 240, 247-262 (1975). The British rule awards fees to the prevailing party. Looking at the statutory language, which uses the term "may," the Supreme Court ruled that the Copyright Statute adopted neither the American or British rule, or the dual approach rule. Instead, the Fogerty court instructs that "Prevailing plaintiffs and prevailing defendants are to be treated alike, but attorney's fees are to be awarded toprevailing parties only as a matter of the court's discretion. "There is no precise rule or formula for making these determinations," but instead equitable discretion should be exercised "in light of the considerations we have identified." Hensley v. Eckerhart, 461 U.S. 424,436-437 (1983)."

The best summary? The Supreme Court's footnote: "Some courts following the evenhanded standard have suggested several nonexclusive factors to guide courts' discretion. For example, the Third Circuit has listed several nonexclusive factors that courts should consider in making awards of attorney's fees to any prevailing party. These factors include "frivolousness, motivation, objective unreasonableness (both in the factual and in the legal components of the case) and the need in particular circumstances to advance considerations of compensation and deterrence." Lieb v. Topstone Industries, Inc., 788 F. 2d 151, 156 (CA3 1986). We agree that such factors may be used to guide courts' discretion, so long as such factors are faithful to the purposes of the Copyright Act and are applied to prevailing plaintiffs and defendants in an evenhanded manner."

Who Gets Attorneys' Fees in Copyright Case?

2009-08-26T09:35:00.000-07:00

Obama . . . Poster from Picture . . . . Fair Use?

2009-02-27T07:18:00.001-08:00

It was a simple photojournalism picture, taken by an AP stringer, when a Los Angeles artist, Shephard Farley, found the image on the web and used it to produce his rendering as a poster:

. The poster has become ubiquitous, and the photo owners (there is a dispute there too about ownership) are now claiming infringement.

This is a great case to think about fair use. If you emphasize the copyright owner's property rights, then you can emphasize the first three factors of the four factor test and rule against fair use. If you emphasize creativity and development of art, then you can emphasize the last factor, through the Posner analysis, and find for fair use.

As you probably know, there are four factors which you look at when determining whether or not something qualifies as a "fair use":
(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
(4) the effect of the use upon the potential market for or value of the copyrighted work.

Justice Souter, in Campbell v. Acuff-Rose Music (the case dealing with 2 Live Crew's parody of Pretty Woman) weighs in on the purpose of copyright protection:

The first factor in a fair use enquiry is "the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes." § 107(1). This factor draws on Justice Story's formulation, "the nature and objects of the selections made." Folsom v. Marsh, 9 F. Cas., at 348. The enquiry here may be guided by the examples given in the preamble to § 107, looking to whether the use is for criticism, or comment, or news reporting, and the like, see § 107. The central purpose of this investigation is to see, in Justice Story's words, whether the new workmerely "supersede[s] the objects" of the original creation, Folsom v. Marsh, supra, at 348; accord, Harper & Row, supra, at 562 ("supplanting" the original), or instead adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message; it asks, in other words, whether and to what extent the new work is "transformative." Leval 1111. Although such transformative use is not absolutely necessary for a finding of fair use, Sony, supra, at 455, n. 40, [n.11] the goal of copyright, to promote science and the arts, is generally furthered by the creation of transformative works. Such works thus lie at the heart of the fair use doctrine's guarantee of breathing space within the confines of copyright, see, e. g., Sony, supra, at 478-480 (Blackmun, J., dissenting), and 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.

In contrast, Judge Posner has viewed fair use from an economic perspective. Judge Posner suggests, in Ty v. Publications, 292 F.3d 512, that:

Generalizing from this example in economic terminology that has become orthodox in fair-use case law, we may say that copying that is complementary to the copyrighted work (in the sense that nails are complements of hammers) is fair use, but copying that is a substitute for the copyrighted work (in the sense that nails are substitutes for pegs or screws), or for derivative works from the copyrighted work, see 4 Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 13.05[B][1], p. 13-193 (2002), is not fair use.

He then goes on to trash the statutory test (and the Campbell formulation) by saying:

We have thus far discussed the application of the fair-use doctrine in terms of the purpose of the doctrine rather than its statutory definition, which though extensive is not illuminating.

I find the Posner approach more convincing. Here, the photo's value was small but for the poster. These are complements, and allowing this transformation benefits both parties and society.

Obama . . . Poster from Picture . . . . Fair Use?

2009-02-27T07:18:00.000-08:00

The first factor in a fair use enquiry is "the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes." § 107(1). This factor draws on Justice Story's formulation, "the nature and objects of the selections made." Folsom v. Marsh, 9 F. Cas., at 348. The enquiry here may be guided by the examples given in the preamble to § 107, looking to whether the use is for criticism, or comment, or news reporting, and the like, see § 107. The central purpose of this investigation is to see, in Justice Story's words, whether the new workmerely "supersede[s] the objects" of the original creation, Folsom v. Marsh, supra, at 348; accord, Harper & Row, supra, at 562 ("supplanting" the original), or instead adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message; it asks, in other words, whether and to what extent the new work is "transformative." Leval 1111. Although such transformative use is not absolutely necessary for a finding of fair use, Sony, supra, at 455, n. 40, [n.11] the goal of copyright, to promote science and the arts, is generally furthered by the creation of transformative works. Such works thus lie at the heart of the fair use doctrine's guarantee of breathing space within the confines of copyright, see, e. g., Sony, supra, at 478-480 (Blackmun, J., dissenting), and 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.

In contrast, Judge Posner has viewed fair use from an economic perspective. Judge Posner suggests, in Ty v. Publications, 292 F.3d 512, that:

Generalizing from this example in economic terminology that has become orthodox in fair-use case law, we may say that copying that is complementary to the copyrighted work (in the sense that nails are complements of hammers) is fair use, but copying that is a substitute for the copyrighted work (in the sense that nails are substitutes for pegs or screws), or for derivative works from the copyrighted work, see 4 Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 13.05[B][1], p. 13-193 (2002), is not fair use.

He then goes on to trash the statutory test (and the Campbell formulation) by saying:

We have thus far discussed the application of the fair-use doctrine in terms of the purpose of the doctrine rather than its statutory definition, which though extensive is not illuminating.

I find the Posner approach more convincing. Here, the photo's value was small but for the poster. These are complements, and allowing this transformation benefits both parties and society.

Failure to Register Copyright Before Infringment Cuts Damage Options

2009-02-12T09:50:00.001-08:00

Statutory damages and attorneys’ fees under the Copyright Act are not not available for infringement that commenced before registration -- or after the registration. The rule: register or lose statutory damages if infringement occurs before a registration. Period.

In Shade v. Gorman, in the Northern District of California, the Plaintiff conceded that he could not recover statutory damages or fees for any pre-registration infringement. But, he argued that he was entitled to statutory damages and fees for post-registration infringement. Wrong.

Relying on the Ninth Circuit’s recent decision Derek Andrew, Inc. v. Poof Apparel Corp., 528 F.3d 696 (9th Cir. 2008), which held “in order to recover statutory damages, the copyrighted work must have been registered prior to commencement of the infringement, unless the registration is made within three months after first publication of the work,” the District Court rejected the claim for any statutory damages because the alleged infringement began more than three months before plaintiff obtained copyright registration.

Register.

Failure to Register Copyright Before Infringment Cuts Damage Options

2009-02-12T09:50:00.000-08:00

Protect Software!!!!!!!!! Register Copyrights . . .

2008-10-31T07:45:00.001-07:00

A prerequisite to bringing suit to enforce a copyright is that the copyrighted work is registered with the U.S. Copyright Office. 17 U.S.C. § 411(a). Let's repeat that: A prerequisite to bringing suit to enforce a copyright is that the copyrighted work is registered with the U.S. Copyright Office. 17 U.S.C. § 411(a).

Registering a copyright brings a horde of benefits to the copyright owner, including statutory damages, but the best benefit is attorneys' fees rights in enforcing the copyright. From a litigation perspective, the threat of an award of fees significantly shifts the balance of power to the copyright owner.

And the registration of copyrights must include registration of derivative works. "A 'derivative work' is a work based upon one or more preexisting works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other form in which a work may be recast, transformed, or adapted. A work consisting of editorial revisions, annotations, elaborations, or other modifications which, as a whole, represent an original work of authorship, is a 'derivative work'." 17 U.S.C. § 101. "The copyright in a . . . derivative work extends only to the material contributed by the author of such work, as distinguished from the preexisting material employed in the work, and does not imply any exclusive right in the preexisting material." 17 U.S.C. § 103(b).

When software revisions are issued, those revisions are derivative works. The original software should be copyrighted and registered, as should be the revisions.

In Dalton-Ross Homes, Inc. v. Williams, 2007 WL 2461892 (D. Ariz. Aug. 29, 2007), the plaintiff sued claiming defendant had infringed a copyright which plaintiff held on architectural floor plans. Plaintiff had registered a copyright for a floor plan known as the “VDM plan” and claimed that a newer floor plan, known as the “Conley plan” was a derivative which was entitled to protection as well. The defendant had admittedly copied the Conley plan in designing a home. The court concluded as follows:

The registration requirement in § 411(a) makes no distinction between derivative and original works. Whether a separate registration of a derivative work is a prerequisite to an action for infringement of that derivative work is a question of first impression in this circuit. However, we are persuaded that separate registration of the derivative work is required. See Well-Made Toy Mfg. Corp. v. Goffa Int’l Corp., 354 F.3d 112, 115 (2d Cir.2003) (“registration of a claim on an original work does not create subject matter jurisdiction with respect to a suit for infringement of the original’s unregistered derivative”); Murray Hill, 264 F.3d at 632 (6th Cir.)(“before an infringement suit can be sustained based on the derivative work,that derivative work must be registered”); Montgomery v. Noga, 168 F.3d 1282, 1292 (11th Cir. 1999); Creations Unlimited, Inc. v. McCain, 112 F.3d 814, 816 (5th Cir.1997); cf. Litchfield, 736 F.2d at 1357 (“[t]o constitute a violation of section 106(2) the infringing work must incorporate in some form a portion of the copyrighted work”). These multi-circuit authorities,coupled with a plain reading of section 501(b) in conjunction with section 411(a), indicate that in order to file an action for infringement of a derivative work, the plaintiff must first register the copyright of that derivative work.

Protect Software!!!!!!!!! Register Copyrights . . .

2008-10-31T07:45:00.000-07:00

The registration requirement in § 411(a) makes no distinction between derivative and original works. Whether a separate registration of a derivative work is a prerequisite to an action for infringement of that derivative work is a question of first impression in this circuit. However, we are persuaded that separate registration of the derivative work is required. See Well-Made Toy Mfg. Corp. v. Goffa Int’l Corp., 354 F.3d 112, 115 (2d Cir.2003) (“registration of a claim on an original work does not create subject matter jurisdiction with respect to a suit for infringement of the original’s unregistered derivative”); Murray Hill, 264 F.3d at 632 (6th Cir.)(“before an infringement suit can be sustained based on the derivative work,that derivative work must be registered”); Montgomery v. Noga, 168 F.3d 1282, 1292 (11th Cir. 1999); Creations Unlimited, Inc. v. McCain, 112 F.3d 814, 816 (5th Cir.1997); cf. Litchfield, 736 F.2d at 1357 (“[t]o constitute a violation of section 106(2) the infringing work must incorporate in some form a portion of the copyrighted work”). These multi-circuit authorities,coupled with a plain reading of section 501(b) in conjunction with section 411(a), indicate that in order to file an action for infringement of a derivative work, the plaintiff must first register the copyright of that derivative work.

Distribution Required????

2008-10-22T11:32:00.001-07:00

Hotaling v. Church of Jesus Christ of Latter-Day Saints, 118 F.3d 199 (4th Cir. 1997)holds that a library distributed a work by adding it to the collection and listing it in the catalog, making the work available to the public. And distribution is the key to infringement in the RIAA cases. Other courts are reluctant to follow Hotaling's simplistic formulation, upping the ante in proof that must be offered by the RIAA.

In the view of some courts, Harper & Row, Publishers, Inc. v. Nation Enters., 471 U.S. 539 (1985), equates the term “distribute” with “publication”; and the Copyright Act in turn defines publication to include the “offering to distribute copies...to a group of persons for purposes of further distribution.”

Listing music files for downloading on a P2P network may not infringe the distribution right. London-Sire Records, Inc. v. Doe 1, 542 F. Supp. 2d 153 (D. Mass. 2008). And in Elektra Entertainment Group, Inc. v. Barker, 551 F. Supp. 2d 234 (S.D.N.Y. 2008), the Court held that “publication” has been given a broad interpretation, but all publications were not necessarily distributions. Merely “making [copyrighted works] available” did not violate the distribution right. Rather, plaintiffs would have to prove defendant “offer[ed] to distribute copies or phonorecords to a group of persons for purposes of further distribution.”

In Atlantic Recording Corp. v. Howell, 554 F. Supp. 2d 976 (D. Ariz. 2008), Judge Wake followed the approach of London-Sire and Perfect 10 v. Amazon.com, Inc., 508 F.3d 1146 (9th Cir. 2007). It deemed that “the great weight of authority that § 106(3) is not violated unless the defendant has actually distributed an unauthorized copy of the work to a member of the public. … Merely making an unauthorized copy of a copyrighted work available to the public does not violate a copyright holder’s exclusive right of distribution.”

We're waiting for appellate review on this issue.

Distribution Required????

2008-10-22T11:32:00.000-07:00

Cab Old Magazines Can be Digitized Without the Author's Consent?

2008-08-22T07:35:00.001-07:00

Should magazine publishers be allowed to republish their old works, even in a compilation, in digital form? The 11th Circuit said no; then it said yes. The defendant is the esteemed National Geographic Society. The plaintiff a poor photographer. Who has the rights to reproduce the photographer's work originally published in the National Geographic magazine?

Section 201(c) of the Copyright Act (dealing with ownership of contributions to collective works), which provides as follows:

Copyright in each separate contribution to a collective work is distinct from copyright in the collective work as a whole, and vests initially in the author of the contribution. In the absence of an express transfer of the copyright or of any rights under it, the owner of copyright in the collective work is presumed to have acquired only the privilege of reproducing and distributing the contribution as part of that particular collective work, any revision of that collective work, and any later collective work in the same series."

Well, that sounds like the deck is stacked in favor of the photographer, does it not? Section 201(c) was a big change in 1976: Prior to 1976, whenever freelance authors contributed to a collective work, they risked losing their copyright in their individual works absent a printed copyright notice in the author’s name. The presumption now is that the author retains the rights to copyright when his or her work in included in a collective work.

But, in the absence of the author expressly allowing future use, the publisher can still claim that the future work was a "later collective work in the same series." And that is what National Geographic asserted about its digital collection. What is the same and what is "new?"

The Supreme Court in the NY Times Photographer case, Tasini, held that the New York Times went beyond the Section 201(c) privilege by compiling the text of all its articles in a searchable online database. That database allowed users to view the individual articles out of context from the other material originally compiled and published as part of the daily newspapers. It ruled that the database constituted a new use rather than a republication or revision of the collective work and, hence, infringed the copyrights of the authors of the individual contributions.

What about the National Geographic digital use. National Geographic reproduced all of the contents of all of its issues, from the very first to the then most recent, including all of the articles and photographs, and even including the original ads, just as they appeared to readers in print form. So, "new" did not apply here. Decision: magazine.

Here is the distinction, provided in a footnote: "In Judge Anderson’s dissent, he gives the example of placing the March 2000 monthly 18 edition of National Geographic devoted entirely to the geography and natural beauty of Africa
into a larger book entitled “The Complete Intellectual History of Africa from 1900 to 2008” as an impermissible reproduction. Under this opinion’s reasoning, that reproduction and/or distribution would not survive the contextual analysis either and I would reach the same result."

http://www.intellectualpropertylawblog.com/greenberg%20v%20national%20geographic%20society.pdf

Cab Old Magazines Can be Digitized Without the Author's Consent?

2008-08-22T07:35:00.000-07:00

Copyright in each separate contribution to a collective work is distinct from copyright in the collective work as a whole, and vests initially in the author of the contribution. In the absence of an express transfer of the copyright or of any rights under it, the owner of copyright in the collective work is presumed to have acquired only the privilege of reproducing and distributing the contribution as part of that particular collective work, any revision of that collective work, and any later collective work in the same series."

Register Those Copyrights!! But the Circuits Differ on When "Registration" Occurs

2008-07-24T10:27:00.001-07:00

You are barred from filing a copyright lawsuit without a copyright registration. Statutory damages, meaning that the copyright owner does not have to prove damages, but receives a fixed amount ($750 to $28,000 per infringement) and a chance to double that for willfulness, are available with registration. But, that registration must be completed before the first infringement. Probably more important is the right to attorney's fees, which also requires registration.

It takes some number of months from the time of application until the U.S. Copyright Office issues a registration certificate. With an expedited registration, for which you pay more, the process takes weeks.

Courts have recently decided that the statute requiring "registration" means a registration that has been issued by the Copyright Office, rather than a mere application. But, a federal court in Illinois recently decided that the completed application, and not the Copyright Office issuance, satisfied this requirment.

One blog reports that five of the thirteen federal circuits have decisions holding that a completed application is sufficient to confer jurisdiction for filing a lawsuit. [First, Third, Fifth, Seventh, and Eighth Circuits. Foraste v. Brown Univ., 248 F. Supp. 2d 71, 77 n.10 (D.R.I 2003); Wilson v. Mr. Tee’s, 855 F. Supp. 679, 682-683 (D.N.J. 1994) and SportsMEDIA Tech, Corp. v. Upchurch, 839 F. Supp. 8, 9 (D. Del. 1993); Lakedreams v. Taylor, 932 F.2d 1103, 1108 (5th Cir. 1991); Chicago Bd. of Education v. Substance, Inc., 354 F.3d 624, 631 (7th Cir. 2003) and see Goss Int’l Ams., Inc. v. A-Am. Mach. & Assembly Co., 2007 U.S. Dist. LEXIS 88382, 2007 WL 4294744 (N.D. Ill. Nov. 30, 2007); Action Tapes, Inc. v. Mattson, 462 F.3d 1010, 1013 (8th Cir. 2006).]

The blog further reports that the Sixth, Tenth, and Eleventh Circuits follow the other approach and require the issuance of a registration. Hawaiian Village Computer, Inc. v. Print Management Partners, Inc., 501 F. Supp. 2d 951, 2007 U.S. Dist. LEXIS 7910, 2007 WL 431017 (E.D. Mich. 2007); La Resolana Architects, PA v. Clay Realtors Angel Fire, 416 F.3d 1195 (10th Cir. 2005); M.G.B Homes, Inc. v. Ameron Homes, Inc., 903 F.2d 1486, 1488 n.4 (11th Cir. 1990).

The Second, Fourth, Ninth, and DC Circuits have yet to issue an opinion, but their district courts have adopted contrasting approaches. Compare Capitol Records, Inc. v. wings Digital Corp., 218 F. Supp. 2d 280 (E.D.N.Y. 2002) (complete registration) with Well-Made Toy Mfg. Corp. v. Goffa Int’l Corp., 210 F. Supp. 2d 147 (E.D.N.Y. 2002) (complete application); Compare Mays & Assocs., Inc. v. Euler, 370 F. Supp. 2d 362 (D. Md. 2005) (application and registration have distinct meanings) with Iconbazaar, L.L.C. v. Am. Online, Inc., 308 F. Supp. 2d 630, 633 (M.D.N.C. 2004) (application approach); Compare Loree Rodkin Management Corp., 315 F. Supp. 2d 1053 (C.D. Cal. 2004) (certificate approach) with Tabra Inc. v. Treasures de Paradise Designs Inc., 20 U.S.P.Q.2d 1313 (N.D. Cal. 1992) (application approach); Compare Strategy Source Inc. v. Lee, 233 F. Supp. 2d 1 (D.D.C. 2002) (complete registration) with International Kitchen Exhaust Cleaning Ass’n v. Power Washers of N. Am., 81 F. Supp. 2d 70 (D.D.C. 2000) (application approach).

I found this research on Lexology, in an article by Alan J. Haus of Lewis Brisbois Bisgaard & Smith LLP. Thank you Alan; very nicely done.

Register Those Copyrights!! But the Circuits Differ on When "Registration" Occurs

2008-07-24T10:27:00.000-07:00

"Imagine" This . . .

2008-06-28T11:29:00.001-07:00

For fifteen seconds of the song Imagine, Yoko and Julian and Sean sued the producers of Expelled: No Intelligence Allowed. Infringement or fair use is the issue.

Fair use factors? The purpose and character of the use; the nature of the copyrighted work; the amount and substantiality of the portion used; and the effect on the potential market. Not a hard case: although the purpose was commercial, and the song is a core copyright work, not much was used and it did not effect the potential market.

The court agreed with the defendants that it was highly transformative. Rejecting the plaintiffs’ argument that the use was not transformative because the excerpt was played in the film without any alteration, the court held that the selection of the particular portion of the song was made for purposes of social commentary, namely, to criticize the song’s diminution of religion. This selection, and the juxtaposition with video also supporting this criticism, rendered the use transformative.

Transformative? Judge Pierre Leval developed the term in his article "Toward a Fair Use Standard," 103 Harv. L. Rev. 1111 (1990):

"The use must be productive and must employ the quoted matter in a different manner or for a different purpose from the original. A quotation of copyrighted material that merely repackages or republishes the original is unlikely to pass the test; in Justice Story's words, it would merely "supersede the objects" of the original. If, on the other hand, the secondary use adds value to the original -- if the quoted matter is used as raw material, transformed in the creation of new information, new aesthetics, new insights and understandings -- this is the very type of activity that the fair use doctrine intends to protect for the enrichment of society. Transformative uses may include criticizing the quoted work, exposing the character of the original author, proving a fact, or summarizing an idea argued in the original in order to defend or rebut it. They also may include parody, symbolism, aesthetic declarations, and innumerable other uses."

Judge Richard Posner, in the beany baby case, points out that "The defense of fair use, originally judge-made, now codified, plays an essential role in copyright law. Without it, any copying of copyrighted material would be a copyright infringement." Note that how good was Ben Stein in the movie matters not at all. As Judge Posner explains, "But the fair-use doctrine is not intended to set up the courts as judges of the quality of expressive works. See Campbell v. Acuff-Rose Music, Inc., supra, 510 U.S. at 582-83, 114 S.Ct. 1164. That would be an unreasonable burden to place on judges, as well as raising a First Amendment question."

What matters is that the first part of the four factors is not just about being commercial or non-commercial, but about the use. In the big case, the Supreme Court said that if the work "adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message," then it can be protected as fair use. "The goal of copyright, to promote science and the arts, is generally furthered by the creation of transformative works." Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 579, 114 S.Ct. 1164, 1171 (U.S.,1994)

"Imagine" This . . .

2008-06-28T11:29:00.000-07:00

Statutory Damages . . . . Register!!!!!

2008-06-28T11:22:00.001-07:00

The Ninth Circuit, in Derek Andrew, Inc. v. Poof Apparel Corporation , falls in step with the rule that for any statutory damages, copyright registration must precede infringement.

In a clothing case, the alleged infringement began prior to the copyright registration date of plaintiff's "hang-tag", but continued after the copyright registration date. Section 412 of the Act mandates that in order to recover statutory damages, the copyrighted work must have been registered prior to commencement of the infringement, unless the registration is made within three months after first publication of the work.

The plaintiff did not register until two years after the first publication of its work, and the initial infringement occurred prior to the registration of the infringed work. But,individual acts of infringement occurred after the copyright registration date.

The Ninth Circuit explained that it would be peculiar to use the word "commenced" to describe a single act of infringement, rather than an activity beginning at one time and continuing or reoccurring thereafter. The Ninth Circuit held that the first act of infringement in a series of ongoing infringements of the same kind marks the "commencement" of one continuing infringement under Section 412. This decision is consistent with other circuits (2nd Circuit, 4th Circuit, and 5th Circuit) that have previously addressed this issue.

Statutory Damages . . . . Register!!!!!

2008-06-28T11:22:00.000-07:00

Judge Wake Surprises -- Holds Back RIAA for the Moment

2008-05-16T08:41:00.001-07:00

Judge Wake surprises. That is, he suprises me, at least. This is not surprising in the sense that Federal Court judges face imposing very terrible fines on individuals for copyright infringement in file sharing, and he statute provides little room for them to show any mercy.

How did he surprise? By taking on the difficult issue of proving infringement through deemed distribution. Some background first.

Copyright infringement requires actual distribution of the copryighted work. As Judge Wake notes, "[t]he general rule, supported by the great weight of authority, is that 'infringement of [the distribution right] requires an actual dissemination of either copies or phonorecords.' Nat’l Car Rental Sys. v. Computer Assocs. Int’l, Inc., 991 F.2d 426, 434 (8th Cir. 1993). See also Perfect 10, Inc. v. Amazon.com, Inc., 487 F.3d 701, 718 (9th Cir. 2007)" The buzz has been around the Fourth Circuit's library case, Hotaling, where, by placing the copyright works for use by the public was enough to prove distribution because they failed to keep records. The record companies wanted to analogize the library to a shared file on one's computer.

The crafty Judge Wake said no, though. Judge Wake noted that the Ninth Circuit, in Perfect10, agreed with the district court’s conclusion that distribution requires an "actual dissemination," consistent with the language of the Copyright Act. Judge Wake says the Ninth Circuit rejects Hotaling. Judge Wake emphasizes that Hotaling is inconsistent with the Copyright Act.

Further, Judge Wake discards the argument that an offer to distribute are not sufficient to meet the distribution requirement. Judge Wake says that "[t]he scope of the term distribution is only defined within § 106(3) itself, as a “sale or other transfer of ownership” or a “rental, lease, or lending” of a copy of the work. The plain meaning of that section requires an identifiable copy of the work to change hands in one of the prescribed ways for there to be a distribution." The record companies argued that the word "distribution" would be equated with "publication."

So? There were 54 copyrighted tunes in the Defendant's shared folder. The Plaintiffs downloaded only 12. The Court allowed these 12 as an investigative scheme. The Defendant has other defenses, but damages have been reduced from 54 times the minimum amount ($750) to 12 times that amount.

Judge Wake Surprises -- Holds Back RIAA for the Moment

2008-05-16T08:41:00.000-07:00

Good (or lucky) Drafting Wins: “Now or Hereafter Known”

2008-05-15T07:28:00.001-07:00

Joey Ramone sued Walmart and Real Network over downloading songs he wrote. The problem? Mr Ramone had a recording agreement with Ramones Productions who licensed the works. Mr Ramone had authorized Ramones productions to use the works and exploit them in “forms of reproduction” which were “now or hereafter known.” The Court said that covered digital forms and was the most reasonable reading of the agreement. Sorry Joey. Punked. I should say Joey's estate: Joey died in 2001.

Good (or lucky) Drafting Wins: “Now or Hereafter Known”

2008-05-15T07:28:00.000-07:00

RIAA Sues Project Playlist

2008-05-15T07:10:00.001-07:00

As one attorney said, "another day, another RIAA lawsuit." What is different about this one?

Project Playlist gives users the opportunity to find, play and share music with others for free, as well as allowing them to embed personalised playlists on their social networking homepages on sites such as MySpace and Facebook, according to the lawsuit. It's "Terms of Service" states:

Project Playlist is an information location tool and social networking website that provides users with an integrated set of services to (i) enable users to locate music files hosted on websites controlled by third parties for promotional or other legal purposes, (ii) stream those legally posted music files using the Project Playlist music player (the “Player”) so the music can be heard, (iii) create hyperlinks to legally posted music files discovered by the user and add those hyperlinks to the Project Playlist search index, (iv) create and publish a series of such hyperlinks to form playlists on a member’s webpage, (v) share those playlists with friends and browse other members playlists on other members’ web pages by embedding the Player in other webpages, where permitted, (vi) purchase music found using the Project Playlist search engine or browsing other members playlists, (vii) obtain current information about new song releases from music blogs, (viii) obtain current information on the popularity of songs as measured by frequency of appearance on other members’ playlists, and (ix) network with other members through a variety of social networking and communications tools.

The record companies claim that: "In short [Project Playlist's] entire business amounts to nothing more than a massive infringement."

What does Project Playlist say about copyright?

Project Playlist is an information location tool intended to help you find and enjoy music legally posted by others on the Internet. Project Playlist intends to organize in its search index location information about music posted on the Internet for promotional and other legal purposes to serve artists and their fans. Project Playlist is also committed to respecting the legitimate interests of copyright owners. Therefore, where possible, Project Playlist negotiates reasonable copyright licenses that also respect the public’s legitimate interest in gaining access to public information and preserving the freedom and functionality of the Internet. Project Playlist pays performance royalties to ASCAP, BMI and SESAC, the three performance rights organizations (“PSOs”) based in the Untied States.

It appears that Project Playlist is used, like a VCR, for legitimate non-infringment purposes and purports to pay royalties. Stay tuned.

RIAA Sues Project Playlist

2008-05-15T07:10:00.000-07:00

Project Playlist is an information location tool and social networking website that provides users with an integrated set of services to (i) enable users to locate music files hosted on websites controlled by third parties for promotional or other legal purposes, (ii) stream those legally posted music files using the Project Playlist music player (the “Player”) so the music can be heard, (iii) create hyperlinks to legally posted music files discovered by the user and add those hyperlinks to the Project Playlist search index, (iv) create and publish a series of such hyperlinks to form playlists on a member’s webpage, (v) share those playlists with friends and browse other members playlists on other members’ web pages by embedding the Player in other webpages, where permitted, (vi) purchase music found using the Project Playlist search engine or browsing other members playlists, (vii) obtain current information about new song releases from music blogs, (viii) obtain current information on the popularity of songs as measured by frequency of appearance on other members’ playlists, and (ix) network with other members through a variety of social networking and communications tools.

The record companies claim that: "In short [Project Playlist's] entire business amounts to nothing more than a massive infringement."

What does Project Playlist say about copyright?

Project Playlist is an information location tool intended to help you find and enjoy music legally posted by others on the Internet. Project Playlist intends to organize in its search index location information about music posted on the Internet for promotional and other legal purposes to serve artists and their fans. Project Playlist is also committed to respecting the legitimate interests of copyright owners. Therefore, where possible, Project Playlist negotiates reasonable copyright licenses that also respect the public’s legitimate interest in gaining access to public information and preserving the freedom and functionality of the Internet. Project Playlist pays performance royalties to ASCAP, BMI and SESAC, the three performance rights organizations (“PSOs”) based in the Untied States.

It appears that Project Playlist is used, like a VCR, for legitimate non-infringment purposes and purports to pay royalties. Stay tuned.

Fairly Harry Potter

2008-04-19T17:04:00.001-07:00

A lexicon presents the language of a field or area. The "HP Lexicon" began as a website where contributors collected information about people, places, and things that inhabit the Harry Potter universe. Those who care about these things Harry Potter regard it as the most complete and authoritative guide to the world of Harry Potter, and it attracts upwards of 25 million visitors per year. The HP Lexicon’s editor decided to publish the HP Lexicon in book form, and RDR Books agreed to do so. Ms J.K. Rowling and Warner Brothers filed suit against RDR, alleging claims for copyright and trademark infringement, and seeking to stop publication of the book.

The issue is fair use, the most misunderstood area of copyright law. Judge Posner has noted that "copying that is complementary to the copyrighted work (in the sense that nails are complements of hammers) is fair use, but copying that is a substitute for the copyrighted work (in the sense that nails are substitutes for pegs or screws), or for derivative works from the copyrighted work . . . is not fair use." Ty Inc. v. Publications International, 292 F.3d 512 (7th Cir. 2002). His economic approach is not really codified in the law, but it does focus on the core concept: is the new work a substitute for the copied work. Following Judge Posner's logic, the Lexicon seems to complement rather than replace Ms Rowling's works, and to do her no harm.

But first, fair use. Judge Posner aptly points out that the statute confuses rather than helps. It says that "the fair use of a copyrighted work... for purposes such as criticism, comment, news reporting, teaching ... scholarship or research, is not an infringement of copyright." 17 U.S.C. § 107. In deciding whether a particular use is fair, the "factors to be considered shall include(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work." This is a list, not a test. So, what is the judge in the Harry Potter case to do?

That is easy enough -- right. Often courts confuse the "sweat of the brow" as the source of copryightable material. It is not. It is just the originality and expression, no matter how difficult or easy the effort, that is protected. The real issue for Ms Rowling is whether the Lexicon infringes her rights to develop derivative works. The Copyright code defines a derivative work as "a work based upon one or more preexisting works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other form in which a work may be recast, transformed, or adapted." 17 U.S.C. § 101. Does producing a Lexicon in book form compete with the rights of Ms Rowling and her empire to produce her own Lexicon as a derivative work? Yes; but is a Lexicon a derivative work? That is, does it recast, transform, or adapt the work?

Fairly Harry Potter

2008-04-19T17:04:00.000-07:00

Deemed Distribution of Nude Women . . . I Mean Pictures . . .

2008-04-08T22:09:00.001-07:00

The internet, occasionally, has been used to disseminate pictures of nudity. Whether art or free expression, it is distribution, and if the material is copyrightable, then the owner has the right to their distribution. So, does the Ninth Circuit's analysis of pictures of nude women help us understand the copyright issues relating to file sharing?

Perfect10 sues Google, objecting to their use of the Perfect10 pictures in the Gooogle system. Actually, Perfect10 asserts infringement of its display rights, which really does not help us understand file-sharing issues if the files are not pictures, but music. And the Ninth Circuit discusses the genealogy case, Hotaling, and Napster for its analysis.

The Ninth Circuit panel states that "Perfect 10 incorrectly relies on Hotaling v. Church of Jesus Christ of Latter-Day Saints and Napster for the proposition that merely making images 'available' violates the copyright owner’s distribution right. Hotaling v. Church of Jesus Christ of Latter-Day Saints, 118 F.3d 199 (4th Cir. 1997); Napster, 239 F.3d 1004. Hotaling held that the owner of a collection of works who makes them available to the public may be deemed to have distributed copies of the works. Hotaling, 118 F.3d at 203. Similarly, the distribution rights of the plaintiff copyright owners were infringed by Napster users (private individuals with collections of music files stored on their home computers) when they used the Napster software to make their collections available to all other Napster users. Napster, 239 F.3d at 1011-14." The Ninth Circuit panel calls this "deemed distribution."

Since Google did not have a copy of Perfect10's nude women, but linked to them, the Ninth Circuit reasoned that Google could not distribute copies. File sharers do own a copy of the work. They are a big step down the road to deemed distribution.

Next,the even bigger hurdle, contributory infringement. “One infringes contributorily by intentionally inducing or encouraging direct infringement, and infringes vicariously by profiting from direct infringement while declining to exercise a right to stop or limit it.” Grokster, 545 U.S. at 930.

Deemed Distribution of Nude Women . . . I Mean Pictures . . .

2008-04-08T22:09:00.000-07:00

File Sharing . . . Do Students Really Have Direct Knowledge?

2008-04-08T08:05:00.001-07:00

So the big issue is whether merely placing copyrighted files in a shared folder available to others over the internet infringes the copyright owner's exclusive right to distribute the copyrighted work. But "distribute" is a term of art in the copyright statutes, meaning the exclusive right "to distribute copies ... of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending." 17 U.S.C. § 106(3). Applying the statute, placing a copyrighted file in a shared folder, for public use, seems to show intent to transfer ownership (in contrast to, say, placing the files in a folder accessible only by yourself). This still begs the question of whether an actual transfer must be shown.

The Napster case in the Ninth Circuit approaches this differently, focusing on contributory copyright infringement. “[O]ne who, with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another, may be held liable as a ‘contributory’ infringer.” Gershwin Publ’g Corp. v. Columbia Artists Mgmt., Inc., 443 F.2d 1159, 1162 (2d Cir. 1971); see also Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259, 264 (9th Cir. 1996). The Ninth Circuit explains, in Napster, that "liability exists if the defendant engages in “personal conduct that encourages or assists the infringement.” Matthew Bender & Co. v. West Publ’g Co., 158 F.3d 693, 706 (2d Cir. 1998). The Ninth Circuit then stated that Napster had direct knowledge of actual infringement, and the walls came tumbling down. Does this "direct knowledge" requirement apply to the student file sharer using a service like Limeware?

File Sharing . . . Do Students Really Have Direct Knowledge?

2008-04-08T08:05:00.000-07:00

File Posting or File Sharing? Which is Illegal?

2008-04-07T06:53:00.001-07:00

So put yourself in the position of a judge. The record industry brings to you the head of the local college student. The copyright statutes bring you statutory damages of $750 per violation at a minimum. It is the copyright version of sentencing guidelines, leaving you a complete lack of discretion.

It has to be tough to be the judge. If this does not seem right, what do you do? Well, tighten the liability standards. And that is the question judges now face in file-sharing cases.

Judge Nancy Gertner of Boston felt that "merely exposing music files to the Internet is not copyright infringement" because those doing so could claim "they did not know that logging onto the peer-to-peer network would allow others to access these particular files." Judge Kenneth Karras in New York said just the opposite, that placing a copyrighted music file in a computer folder shared by peer-to-peer software users could amount to illegal publication of it.

At issue is what level of proof is required: just making the copyrighted digital files available on a shared network, or a showing that the digital files were actually shared. Judge Neil Wake of Phoenix is addressing this very issue in Atlantic v. Howell. The Howells contend that their file-sharing program was "not set up to share" and that the files were "for private use" and "for transfer to portable devices, that is legal for 'fair use.'" Judge Wake initially rejected their argument, but is now re-considering. But first, the Church of Jesus Christ of Latter Day Saints and Napster.

Yep. The Mormon Church was sued for placing an unauthorized copy of a genealogicial work in its collection and including the copy in its catalog or index system, making the copy available to the public. The District Court said this was not enough, but the Fourth Circuit reversed. It reasoned that "[w]hen a public library adds a work to its collection, lists the work in its index or catalog system, and makes the work available to the borrowing or browsing public, it has completed all the steps necessary for distribution to the public," violating §106(3). So, is a shared folder on limeware a "public library?" Judge Hall, in dissent, reads the statute, and says "the owner of a copyright does not possess an exclusive right to 'distribute' the work in any conceivable manner; instead, it has the exclusive right 'to distribute copies ... of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending [.]' 17 U.S.C. § 106(3)." He notes that all use was in the library, and perhaps should be copyright infringement even if the work was not lent, but just used in the library; but, under the statute, it is not illegal distribution because Congress said "lending" is required. He's the minority in the Fourth Circuit, though.

But what about that public file? If another uses the folder, it seems like that would be lending the file. That fails to answer the question of what needs to be proved: merely an offer or an actual file-share? If one plays a song in the presence of another, is that lending? If the file remains only on your hard disk, but another plays it remotely, is that lending? The Ninth Circuit already has discussed file sharing in Napster, has it not? And everyone knows Napster. Or do they?

File Posting or File Sharing? Which is Illegal?

2008-04-07T06:53:00.000-07:00

The Cook, the Thief, the Lover, and the Wife . . .

2008-03-26T08:30:00.001-07:00

That was a marvelously strange movie, years ago, with a wonderful title, written as bald allusion to British politics and Maggie Thatcher. The movie was a failure, despite some stunning visuals, but did present the question of who was responsible. And that's the issue in copyright today.

The Cook? Those who provide technology or software that facilitates copyright infringement. In our recent history, what became the VCR and allowed copying of video for use when we wanted, a precursor to Tivo and DVR's, raised the question of copying for personal use without paying a license fee (even though some copying was obviously not for personal use, but for replicating for others). At one one time the Lover, the content providers like movie and recording studios, opposed the use of VCR's without payment to them, a rather luddite approach. The Cooks today are file sharing services and internet providers and others who provide new technology that facilitate copying.

The Thief? Usually a child or youth or student or young adult who just wants his or her content, and sees an opportunity to get it inexpensively. This is a candy store, and few of the thieves see themselves as stealing.

The Wife? The Court system, who has to sort this mess out. And the primary wife is the Ninth Circuit, the home of the industry seeking protection. One article explains the current conundrum:

The most prominent lawsuits have been brought against vendors of peer-to-peer file sharing software—Napster, Aimster, and Grokster—who have been held liable under the judicial doctrines of vicarious liability and contributory infringement for the copyright violations committed by their users. Although these secondary liability doctrines are well established in copyright law, the Napster and Aimster decisions have expanded the role that illicit intent to profit from others’ copyrighted works plays in determining liability. The expanded scrutiny of intent makes it difficult for developers of copying and distribution technologies to predict their potential liability and undermines the limited immunity for the development of useful technologies that the Supreme Court established in its Sony decision.

Sverker K. Hogberg, Columbia Law Review, http://www.columbialawreview.org/pdf/hogberg.pdf.

So, what approaches are being used? My bias is simple: the economic consequences of the law must be evaluated, and the legal rules that promote the most benefit for society chosen. This is quite different than a "property law" analysis urged by copyright owners; but, copyright law already imposes blanket licenses at times.

We'll think more about this in coming days.

The Cook, the Thief, the Lover, and the Wife . . .

2008-03-26T08:30:00.000-07:00

The most prominent lawsuits have been brought against vendors of peer-to-peer file sharing software—Napster, Aimster, and Grokster—who have been held liable under the judicial doctrines of vicarious liability and contributory infringement for the copyright violations committed by their users. Although these secondary liability doctrines are well established in copyright law, the Napster and Aimster decisions have expanded the role that illicit intent to profit from others’ copyrighted works plays in determining liability. The expanded scrutiny of intent makes it difficult for developers of copying and distribution technologies to predict their potential liability and undermines the limited immunity for the development of useful technologies that the Supreme Court established in its Sony decision.

Attorney's Fees . . . Be Fair or Be Denied Attorneys' Fees in Copyright

2008-03-14T07:06:00.001-07:00

The Copyright Act authorizes a court to award reasonable attorney’s fees to the prevailing party in a suit under the Act.

In any civil action under this title, the court in its discretion may allow the recovery of full costs by or against any party other than the United States or an officer thereof. Except as otherwise provided by this title, the court may also award a reasonable attorney’s fee to the prevailing party as part of the costs.

In Fogerty v. Fantasy, Inc., 510 U.S. 517, 534–35 (1994), the Supreme Court held that attorney’s fees should be awarded evenhandedly to both prevailing plaintiffs and defendants in copyright actions. But, the copyright attorney's fee rule is not the British rule, but one of discretion. Id., 10 U.S. at 534. The Supreme Court lists several non-exclusive factors that a court may consider in exercising its discretion: “frivolousness, motivation, objective unreasonableness (both in the factual and in the legal components of the case) and the need in particular circumstances to advance considerations of compensation and deterrence.”

In two recent file-sharing cases, where record companies are unmercifully attacking file-sharing users, often college students, courts have awarded fees and denied fees to defendants when the record companies have "the wrong guy." In a Texas case, a father pointed to his adult daughter as the responsible party, but waited over eight months in the litigation to do so. After dismissing the case, the Court refused to award attorney's fees because of the defendants delay in the prompt resolution of the lawsuit. Virgin v. Thompson

href="www.thelen.com/tlu/VirginVThompson.pdf"

But, successfully getting the record companyies' claims dismissed, with prejudice, without misbehavior, should result in attorney's fees. Atlantic v. Andersen

http://www.thelen.com/tlu/AtlanticVAndersenJan08.pdf

Attorney's Fees . . . Be Fair or Be Denied Attorneys' Fees in Copyright

2008-03-14T07:06:00.000-07:00

The Copyright Act authorizes a court to award reasonable attorney’s fees to the prevailing party in a suit under the Act.

In any civil action under this title, the court in its discretion may allow the recovery of full costs by or against any party other than the United States or an officer thereof. Except as otherwise provided by this title, the court may also award a reasonable attorney’s fee to the prevailing party as part of the costs.

Even More Karoake . . .

2008-03-11T06:34:00.001-07:00

Thank God copyright was invented to protect song owners against karoake. It appears that the karoake wars continue, and the battleground is the Ninth Circuit. Now the karoake record producers are suing each other and using copyright.

Who? Sybersound sued twelve competitors. What for? Cheating. Sybersound said its competitors represented to buyers that their songs were properly licensed, but they were not, and that they were using songs to which Sybersound held the copyright license. Sybersound attempts to couch a unique Lanham Act claim, i.e., that their competitors were improperly claiming to have copyright licenses, and Sybersound directly made a copyright infringement claim as a licensee.

To be fair, Sybersound says that the false representations to customers about having copyright permissions are the Lanham Act violations. But the Court would not go for this "theory":

Under copyright law, only copyright owners and exclusive licensees of copyright may enforce a copyright or a license. See 17 U.S.C. § 501(b) (conferring standing only to the “legal or beneficial owner of an exclusive right” who “is entitled . . . to institute an action for any infringement . . . while he or she is the owner of it”); Silvers, 402 F.3d at 885. Therefore, third party strangers and nonexclusive licensees cannot bring suit to enforce a copyright, even if an infringer is operating without a license to the detriment of a nonexclusive licensee who has paid full value for his license. See 3-10 Melville B. Nimmer;David Nimmer, Nimmer on Copyright, § 10.02 [B] [1] (2007).

Does that really respond to the Plaintiff's theory?

The Ninth Circuit finds a Supreme Court case, Dastar, addressing the interplay between the Lanham Act and copyright. There, an author used the Lanham Act to claim that, after a television series passed into the public domain, the producer failed to attribute the series to him, and the Supremes said that using the Lanham Act to extend attribution of the source of goods through the Lanham Act would be granting a perpetual right to a facet of copyright, but it commented that making a misrepresentation would be a Lanham Act claim. So, Sybersound wins, right? Wrong. The Ninth Circuit argues that:

Construing the Lanham Act to cover misrepresentations about copyright licensing status as Sybersound urges would allow competitors engaged in the distribution of copyrightable materials to litigate the underlying copyright infringement when they have no standing to do so because they are nonexclusive licensees or third party strangers under copyright law, and we decline to do so.

That makes little sense to me.

Perhaps the explanation is the Sybersound was greedy, also suing in copyright even though its assignment was not exclusive. The Copyright Act permits exclusive rights to be chopped up and owned separately, to be effective as a transfer of ownership, the assignment must be exclusive. And only owners may sue in copyright.

Even More Karoake . . .

2008-03-11T06:34:00.000-07:00

Under copyright law, only copyright owners and exclusive licensees of copyright may enforce a copyright or a license. See 17 U.S.C. § 501(b) (conferring standing only to the “legal or beneficial owner of an exclusive right” who “is entitled . . . to institute an action for any infringement . . . while he or she is the owner of it”); Silvers, 402 F.3d at 885. Therefore, third party strangers and nonexclusive licensees cannot bring suit to enforce a copyright, even if an infringer is operating without a license to the detriment of a nonexclusive licensee who has paid full value for his license. See 3-10 Melville B. Nimmer;David Nimmer, Nimmer on Copyright, § 10.02 [B] [1] (2007).

Construing the Lanham Act to cover misrepresentations about copyright licensing status as Sybersound urges would allow competitors engaged in the distribution of copyrightable materials to litigate the underlying copyright infringement when they have no standing to do so because they are nonexclusive licensees or third party strangers under copyright law, and we decline to do so.

Karoake Law!!!!!!!!!!! It Costs More to Sing the Words.

2008-03-10T06:10:00.001-07:00

It is just a matter of time before there is an opinion about most anything. Today's is karoake.

The U.S. Court of Appeals for the Ninth Circuit held that a compulsory license does not include the right to print or display song lyrics with the recordings. Leadsinger, Inc. v. BMG Music Publishing, Case No. 06-55102 (9th Cir., Jan. 2, 2008). So, how does karoake work?

From a copyright angle, BMG, here, the license owner, issues "compulsory mechanical licenses" to copyrighted musical compositions under § 115 of the Copyright Act. But wait; we need the lyrics, not just the song, for a karoake feast. So, in addition to the mechanical fee required for the compulsory mechanical license, BMG demanded that karaoke companies pay a “lyric reprint” fee and a “synchronization fee.”

The exclusive rights granted to a copyright author for "nondramatic musical works" to make and to distribute "phonorecords" of such works are subject to compulsory licensing. There are several different compulsory license provisions in copyright: nondramatic musical compositions, public broadcasting, retransmission by cables systems, subscription digital audio transmission, and nonsubscription digital audio transmission such as internet radio. Authors do not have every right under copyright law, and collective licensing systems have been mandated by Congress. Sadly for the karoake world, rights to copy lyrics and synchronize them with music (which is covered by the mandatory license) are not included.

The law? Compulsory licensing is for "phonorecords," and does not include audiovisual works, like lyrics. Thus, § 115's compulsory licensing scheme does not apply to audiovisual works. And synchronization rights remain with the copryight owner. courts have recognized a copyright holder's right to control the synchronization of musical compositions with the content of audiovisual works and have required parties to obtain synchronization licenses from copyright holders. See Maljack Prods., Inc. v. GoodTimes Home Video Corp., 81 F.3d 881, 884-85 (9th Cir.1996) ; ABKCO Music, Inc. v. Stellar Records, Inc., 96 F.3d 60, 63 n. 4 (2d Cir.1996). The karaokers cannot sing this tune; Congress failed to anticipate their needs back in 1976. That Congress has and has used to power to grant licenses is instructive in this digital age. At some time, Congress will have to revisit these issues to take into account new technologies.

Karoake Law!!!!!!!!!!! It Costs More to Sing the Words.

2008-03-10T06:10:00.000-07:00

Taking Pictures of Toys Not Enough

2008-03-09T17:59:00.001-07:00

In an opinion issued this year on my birthday, January 29, Shrock v. Learning Curve, Judge Milton Shadur ended a photographer's copyright claim for a copyright infringement for images he took for the company's Thomas & Friends toys. The toys were scaled-down train engines, railcars and segments of railway track, along with the occasional tram, lorry or assorted vehicle. The licensing was not clear; instead, the photographer put a "usage restriction" in the invoice, saying that the toy pictures could only be used for two years. When the company kept using them after the time period, the photographer sued.

But, the photographer had one problem: because the images he took were photographs of objects that were themselves copyrighted (i.e., the toys), the images were “derivative works, ” and were not copyrightable by the photographer. The copyright owner has the exclusive right to prepare (or to authorize) derivative works, and a third party seeking to copyright a derivative work must have the permission of the copyright holder of the underlying work.

Photographs have been recognized as copyrightable subject matter since the 1860’s. The copyrightability of a photograph depend on its level of originality, i.e., the “lighting, angle, perspective, and the other ingredients that traditionally apply to that art-form.” The lesson here is that the subject matter cannot be a copryighted work itself; but, the practical lesson is to work these issues out at the licensing stage, not after the work is delivered.

Taking Pictures of Toys Not Enough

2008-03-09T17:59:00.000-07:00

Starting this Blog . . . Arizona Copyright for Artists, Authors, Photographers, Software Developers, and Their Attorneys

2008-03-09T17:27:00.001-07:00

Welcome. Copyright today is pervasive, especially in the arts - for authors, photographers, artists, painters (and for their attorneys) and in software development. Businesses face copyright issues daily. This blog is dedicated to the Arizona community with an interest -- or with questions about --copyright.

Starting this Blog . . . Arizona Copyright for Artists, Authors, Photographers, Software Developers, and Their Attorneys

2008-03-09T17:27:00.000-07:00