The Supreme Court's Sony opinion may be one of the worst of a very sad lot from that Court, its ill-effects seemingly endless, a poster child of why that Court should not hear new technology cases. The story of its flip-flopping majorities, failure to grasp essential attributes of the 1976 Act (such as the structure of Section 106 granting broad rights followed by limitations in Sections 107 ff; the express liability for third-party liability via the term "to authorize") is old hat, as is the devastation wrought by its rabbit hat creation of fair use presumptions, jettisoned 10 years later in the 2 Live Crew opinion, but still living on in some opinions like a cancer that can never be completely remitted.
And then there is Sony's adoption of the patent law staple article of commerce doctrine, grafted on to the very different copyright doctrine of contributory infringement. And now we have Groskter's "inducement" theory of liability which fits somehow with contributory infringement and vicarious liability, but which was resorted to only as a last ditch PR effort when the Court couldn't come to agreement on the actual issues it set out to answer.
I read last night a case that has made me even more despondent about an already depressing area. The case is Marvel Enterprises, Inc. v. NCSoft Corp., 74 USPQ2d 1303 (C.D. Cal. 2005). Plaintiff is the well-known owner of comic book characters, including Captain America and the Incredible Hulk. Defendant NCR Soft hosts online games, like the City of Heroes, where members of the public can create their own games and characters. Plaintiff alleged that some of these characters infringed its characters and that defendant should be held liable.
Defendant filed a motion to dismiss under FRCP 12(b)(6). Here is the part of the court's opinion that concerns me:
It is uncontested that Defendants' game has a substantial non-infringing use. Generally, the sale of products with substantial non-infringing uses does not evoke liability for contributory copyright infringement. Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417, 442(1984). However, where a computer system operator is aware of specific infringing material on the computer system, and fails to remove it, the system operator contributes to infringement. A & M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1021 (9th Cir.2001). Plaintiffs have alleged that “Defendants knew or should have known” that many users were committing direct infringement of Plaintiffs copyrighted characters. (Second Am. Compl. ¶ 42). Thus, Plaintiffs have alleged that Defendants, as operators of their online computer server system were aware of infringing material on their system and failed to remove it. Therefore, Plaintiffs have stated a claim for contributory copyright infringement.
This passage disabused me of the one thing I thought I knew about the area. I had thought that if a court found there is a substantial noninfringing use, there was no liability for any infringing uses. What else could it mean? You are never liable for noninfringing uses, so the staple article commerce of doctrine would seem to only have relevance for excusing a certain amount of infringing uses.
Among the unanswered questions from Sony is what does "substantial" mean? Does it mean dominant or something over 50%? Or, does it mean less than dominant, maybe even a relatively small amount but an important use? Can there, in other words, be both substantial non-infringing uses and substantial infringing uses at the same time, and if so, what happens? Is there liability for the infringing uses, and if so, under what circumstances? Does it matter if defendant can prevent noninfringing uses, and if so at what cost?
A photocopy machine is one example. One can't construct such a machine not to copy copyrighted material (at least as a general matter), so either you enjoin it all or not. (This is a problem that DRMs attempt to solve of course). In Sony, though, the Betamax could have been made without the record feature, but the Court thought that unnecessary, even though with the record feature there was a substantial amount of infringing uses that resulted. That's why I thought there is no liability for the infringing uses once a substantial noninfringing use was found.
What if defendant can separate out the infringing sheep from the noninfringing goats? Does it matter if defendant has knowledge of the infringing acts? Does it depend on the relative burdens? (See the Grokster amicus brief by the "Chicago 10," Doug Lichtman, Randy Picker et al). If so, where does this come from, and doesn't such an approach merely mean that there can be no infringing uses, rendering the staple article of commerce defense irrelevant? Such a notice and take down approach to staple article of commerce, moreover, sounds to me like an importation of the DMCA into the body politic of copyright, an importation likely to be fatal to the host.
Monday, July 31, 2006
Thursday, July 27, 2006
Grosso Mondo: Bad Ideas Never Die
Bad Ideas never die; no I'm not talking about the proposal to extend protection to fashion designs, but to protecting ideas themselves. Here are some excerpts from an article in yesterday's New York Times:
Matthew Benay filed a lawsuit here accusing Warner Brothers and others of stealing the idea for “The Last Samurai” from their screenplay of the same name. Three months later, another writer, Reed Martin, sued Focus Features and the director Jim Jarmusch, among others, saying they lifted “Broken Flowers” from his work. Shortly before that, yet another aggrieved writer, Maurice Fraser, filed suit against NBC Universal, saying it had taken the concept for its upcoming reality show “World Vision: An American Anthem” from his pitch “Battle of the States.”
In 2004, [in a case] called Jeff Grosso v. Miramax Film Corporation, [the Ninth Circuit] held that studios, producers and anyone else who considers an idea offered for sale can’t rely on the federal Copyright Act in fighting claims that they have entered under an implied contract to buy it for fair value if it’s found acceptable. That ruling, by the United States Court of Appeals for the Ninth Circuit in California, gave writers a way to sidestep the difficulties of a copyright claim — and opened the door to a growing stack of suits that are keeping Hollywood’s legal machinery even busier than usual.
...
Miramax appears to have won the Grosso case when a state court judge earlier this month threw out a claim that a pair of writers had stolen the idea for the movie “Rounders” from the writer Jeff Grosso’s 1995 screenplay “The Shell Game.”
************
In Grosso [385 F.3d 905] , the issue was one of preemption: does the Copyright Act preempt a state law action for idea theft, usually cast an an implied contract. If the answer to that question is no, there is also the question of whether a state law claim as been made out, and it is on this point that Grosso eventually lost. But he should have lost on the first question. In finding no preemption, the Ninth Circuit which surveyed both prior court of appeals and other court precedents at some length:
In Desny, 299 P.2d at 257, the California Supreme Court explained that where an idea is furnished by one party to another, a contract sometimes may be implied even in the absence of an express promise to pay. The Court held that a contract exists where "the circumstances preceding and attending disclosure, together with the conduct of the offeree acting with knowledge of the circumstances, show a promise [to pay] of the type usually referred to as ‘implied’ or ‘implied in fact.’" Id. at 270. The Desny rule is justified on the theory that the bargain is not for the idea itself, but for the services of conveying that idea. See Donahue v. Ziv Television Programs, Inc., 245 Cal. App. 2d 593, 54 Cal.Rptr. 130, 140, (Ct. App. 1966).
To establish a Desny claim for breach of implied-in-fact contract, the plaintiff must show that the plaintiff prepared the work, disclosed the work to the offeree for sale, and did so under circumstances from which it could be concluded that the offeree voluntarily accepted the disclosure knowing the conditions on which it was tendered and the reasonable value of the work. See Faris v. Enberg, 97 Cal. App. 3d 309, 158 Cal.Rptr. 704, 709 (Ct. App. 1979). Grosso’s complaint mirrors the requirements of Desny and states that "the idea was submitted by Plaintiff to Defendants with the understanding and expectation, fully and clearly understood by Defendants that Plaintiffs would be reasonably compensated for its use by Defendants." We conclude that the complaint stated a Desny claim.
With respect to preemption, the Copyright Act, 17 U.S.C. § 301, establishes a two part test. Claims under state law are preempted where: (1) the work at issue comes within the subject matter of copyright, and (2) the state law rights are "equivalent to any of the exclusive rights within the general scope of copyright." Del Madera Props. v. Rhodes & Gardner, Inc., 820 F.2d 973, 976 (9th Cir. 1987) (internal quotation marks omitted) overruled on other grounds by Fogerty v. Fantasy, Inc., 510 U.S. 517; see also 17 U.S.C. § 301.
The dispositive preemption issue in this case is whether the rights protected by a Desny claim are equivalent to the rights protected by copyright. To survive preemption, the state cause of action must protect rights that are qualitatively different from the rights protected by copyright: the complaint must allege an "extra element" that changes the nature of the action. Del Madera, 820 F.2d at 977. Our prior decision in Landsberg v. Scrabble Crossword Game Players, Inc., 802 F.2d 1193, 1196-97 (9th Cir. 1986), supports treating the implied promise to pay required by Desny as an "extra element" for preemption purposes. In Landsberg, the defendants used the plaintiff’s idea for a Scrabble strategy book without paying the expected compensation, and we applied California law to affirm a judgment of liability on a Desny claim. We explained that:
The contract claim turns not upon the existence of a [copyright] . . . but upon the implied promise to pay the reasonable value of the material disclosed. Id. at 1196.
This discussion further muddies already muddied waters. The "idea" in Grosso was embodied in a screenplay and plaintiff Grosso had, in the same complaint, brought an unsuccessful copyright infringement claim. The implied contract claim was, thus, a phony effort to circumvent the lack of substantial similarity; it was as if plaintiff said, "you copied my expression, but if the trier of facts finds you didn’t, then you copied my idea." The fallacy of such an approach is readily apparent.
****************
By characterizing the inquiry as a bargain "not for the idea itself, but for the services of conveying that idea," the Grosso court attempted to shift the focus of the right from unauthorized use of the screenplay to a non-existent services for conveying the ideas in the screenplay. But there were no "services" rendered for conveying the idea, nor did Grosso seek recompense for the conveyance of the idea: he sought recompense for the post-conveyance use of the idea, that is the use in a screenplay alleged to have been substantially similar to plaintiff’s. Such claims are preempted.
An additional problem in idea cases is the very different standards applied in the two principal jurisdictions, California and New York, for what type of ideas are protectable and under what circumstances.
Matthew Benay filed a lawsuit here accusing Warner Brothers and others of stealing the idea for “The Last Samurai” from their screenplay of the same name. Three months later, another writer, Reed Martin, sued Focus Features and the director Jim Jarmusch, among others, saying they lifted “Broken Flowers” from his work. Shortly before that, yet another aggrieved writer, Maurice Fraser, filed suit against NBC Universal, saying it had taken the concept for its upcoming reality show “World Vision: An American Anthem” from his pitch “Battle of the States.”
In 2004, [in a case] called Jeff Grosso v. Miramax Film Corporation, [the Ninth Circuit] held that studios, producers and anyone else who considers an idea offered for sale can’t rely on the federal Copyright Act in fighting claims that they have entered under an implied contract to buy it for fair value if it’s found acceptable. That ruling, by the United States Court of Appeals for the Ninth Circuit in California, gave writers a way to sidestep the difficulties of a copyright claim — and opened the door to a growing stack of suits that are keeping Hollywood’s legal machinery even busier than usual.
...
Miramax appears to have won the Grosso case when a state court judge earlier this month threw out a claim that a pair of writers had stolen the idea for the movie “Rounders” from the writer Jeff Grosso’s 1995 screenplay “The Shell Game.”
************
In Grosso [385 F.3d 905] , the issue was one of preemption: does the Copyright Act preempt a state law action for idea theft, usually cast an an implied contract. If the answer to that question is no, there is also the question of whether a state law claim as been made out, and it is on this point that Grosso eventually lost. But he should have lost on the first question. In finding no preemption, the Ninth Circuit which surveyed both prior court of appeals and other court precedents at some length:
In Desny, 299 P.2d at 257, the California Supreme Court explained that where an idea is furnished by one party to another, a contract sometimes may be implied even in the absence of an express promise to pay. The Court held that a contract exists where "the circumstances preceding and attending disclosure, together with the conduct of the offeree acting with knowledge of the circumstances, show a promise [to pay] of the type usually referred to as ‘implied’ or ‘implied in fact.’" Id. at 270. The Desny rule is justified on the theory that the bargain is not for the idea itself, but for the services of conveying that idea. See Donahue v. Ziv Television Programs, Inc., 245 Cal. App. 2d 593, 54 Cal.Rptr. 130, 140, (Ct. App. 1966).
To establish a Desny claim for breach of implied-in-fact contract, the plaintiff must show that the plaintiff prepared the work, disclosed the work to the offeree for sale, and did so under circumstances from which it could be concluded that the offeree voluntarily accepted the disclosure knowing the conditions on which it was tendered and the reasonable value of the work. See Faris v. Enberg, 97 Cal. App. 3d 309, 158 Cal.Rptr. 704, 709 (Ct. App. 1979). Grosso’s complaint mirrors the requirements of Desny and states that "the idea was submitted by Plaintiff to Defendants with the understanding and expectation, fully and clearly understood by Defendants that Plaintiffs would be reasonably compensated for its use by Defendants." We conclude that the complaint stated a Desny claim.
With respect to preemption, the Copyright Act, 17 U.S.C. § 301, establishes a two part test. Claims under state law are preempted where: (1) the work at issue comes within the subject matter of copyright, and (2) the state law rights are "equivalent to any of the exclusive rights within the general scope of copyright." Del Madera Props. v. Rhodes & Gardner, Inc., 820 F.2d 973, 976 (9th Cir. 1987) (internal quotation marks omitted) overruled on other grounds by Fogerty v. Fantasy, Inc., 510 U.S. 517; see also 17 U.S.C. § 301.
The dispositive preemption issue in this case is whether the rights protected by a Desny claim are equivalent to the rights protected by copyright. To survive preemption, the state cause of action must protect rights that are qualitatively different from the rights protected by copyright: the complaint must allege an "extra element" that changes the nature of the action. Del Madera, 820 F.2d at 977. Our prior decision in Landsberg v. Scrabble Crossword Game Players, Inc., 802 F.2d 1193, 1196-97 (9th Cir. 1986), supports treating the implied promise to pay required by Desny as an "extra element" for preemption purposes. In Landsberg, the defendants used the plaintiff’s idea for a Scrabble strategy book without paying the expected compensation, and we applied California law to affirm a judgment of liability on a Desny claim. We explained that:
The contract claim turns not upon the existence of a [copyright] . . . but upon the implied promise to pay the reasonable value of the material disclosed. Id. at 1196.
This discussion further muddies already muddied waters. The "idea" in Grosso was embodied in a screenplay and plaintiff Grosso had, in the same complaint, brought an unsuccessful copyright infringement claim. The implied contract claim was, thus, a phony effort to circumvent the lack of substantial similarity; it was as if plaintiff said, "you copied my expression, but if the trier of facts finds you didn’t, then you copied my idea." The fallacy of such an approach is readily apparent.
****************
By characterizing the inquiry as a bargain "not for the idea itself, but for the services of conveying that idea," the Grosso court attempted to shift the focus of the right from unauthorized use of the screenplay to a non-existent services for conveying the ideas in the screenplay. But there were no "services" rendered for conveying the idea, nor did Grosso seek recompense for the conveyance of the idea: he sought recompense for the post-conveyance use of the idea, that is the use in a screenplay alleged to have been substantially similar to plaintiff’s. Such claims are preempted.
An additional problem in idea cases is the very different standards applied in the two principal jurisdictions, California and New York, for what type of ideas are protectable and under what circumstances.
Wednesday, July 26, 2006
Laches and the Statute of Limitations
What is the relationship between laches and the statute of limitations in 17 USC Section 507? Laches is an equitable doctrine invoked when, through an unreasonable delay, plaintiff fails to act in a timely fashion in asserting its rights. But while laches properly focuses on plaintiff's blame in sitting on its rights, ultimately it is the harm to defendant from plaintiff's inaction that forms the basis for the defense. As an affirmative defense, defendant bears the burden of proof in establishing both unreasonable delay and harm therefrom: mere delay or passage of time is insufficient.
Can laches ever occur when plaintiff acts within the limitations period, in our case three-years from the time the claim accrues?
Statutes of limitation are pure creatures of legislatures; laches is a judicially created doctrine, and as a result some courts (those few who are modest) have expressed concern over separation of powers problems that would arise if laches is utilized to bar a claim brought within the limitations period. Professor Dobbs, the guru of such things, has traced the origins of laches to subject areas where there was no statute of limitations, and thus laches functioned as a form of judicial flexible statute of limitations. But where the legislature has acted, laches should not be available.
Courts do though have a hard time not dipping into the well of their self-created equitable powers, especially the Ninth Circuit which has used laches within the limitations period while ironically noting such applications are "rare." In Jackson v. Axton, 25 F.3d 884, 888 (9th Cir. 1994), that court wrote, without any supporting authority (who needs it when you create your own), "laches may apply whether or not any statutory limitations period runs."A subsequent opinion, Kling v. Hallmark Cards, Inc., 225 F.3d 1010, 1039 (9th Cir, 2000) seems to have misunderstood the issue entirely, writing:
[a] copyright holder would be vulnerable to the laches defense if
he had knowledge of a planned infringement more than three
years prior to filing his action, even if he complied with the statute
of limitations by filing less than three years after the infringement
actually began.
Try explaining that to a client. And then there is the case that led me to this post in the first place, a June 26, 2006 opinion from the Eastern District of Pennsylvania, Gloster v. Relios, Inc., 2006 WL 1737800: "[O]nce the statute of limitations has run, the defendant is entitled to a presumption of laches, which the plaintiff has to rebut." I would have thought that once the limitations is past, plaintiff loses, and that if one is within the limitations period either laches has no role at all, or if it does, defendant bears the burden.
Can laches ever occur when plaintiff acts within the limitations period, in our case three-years from the time the claim accrues?
Statutes of limitation are pure creatures of legislatures; laches is a judicially created doctrine, and as a result some courts (those few who are modest) have expressed concern over separation of powers problems that would arise if laches is utilized to bar a claim brought within the limitations period. Professor Dobbs, the guru of such things, has traced the origins of laches to subject areas where there was no statute of limitations, and thus laches functioned as a form of judicial flexible statute of limitations. But where the legislature has acted, laches should not be available.
Courts do though have a hard time not dipping into the well of their self-created equitable powers, especially the Ninth Circuit which has used laches within the limitations period while ironically noting such applications are "rare." In Jackson v. Axton, 25 F.3d 884, 888 (9th Cir. 1994), that court wrote, without any supporting authority (who needs it when you create your own), "laches may apply whether or not any statutory limitations period runs."A subsequent opinion, Kling v. Hallmark Cards, Inc., 225 F.3d 1010, 1039 (9th Cir, 2000) seems to have misunderstood the issue entirely, writing:
[a] copyright holder would be vulnerable to the laches defense if
he had knowledge of a planned infringement more than three
years prior to filing his action, even if he complied with the statute
of limitations by filing less than three years after the infringement
actually began.
Try explaining that to a client. And then there is the case that led me to this post in the first place, a June 26, 2006 opinion from the Eastern District of Pennsylvania, Gloster v. Relios, Inc., 2006 WL 1737800: "[O]nce the statute of limitations has run, the defendant is entitled to a presumption of laches, which the plaintiff has to rebut." I would have thought that once the limitations is past, plaintiff loses, and that if one is within the limitations period either laches has no role at all, or if it does, defendant bears the burden.
Monday, July 24, 2006
A Dance to the Death?
Today's New York Times Arts section has an article on a bitter fight within the Connecticut dance troupe Pilobolus. (Pilobolus is a phototropic zygomycete, "a sun-loving fungus that grows in barnyards and pastures.") What motivated the story is unknown, although the Times discloses that the chairman of Pilobolus' board is married to a Times reporter, and article does, at least to me as an outsider, come off as very pro-management. Perhaps the article is meant to counter traction the story has gotten in other quarters.
The dispute recalls the bitter fight over rights to Martha Graham's choreography, sorted out by the Second Circuit in Martha Graham School & Dance Foundation, Inc. v. Martha Graham Center of Dance, Inc., 380 F.3d 624 (2d Cir. 2004)(Newman, J.), 2006 WL 1901021 (2d Cir. July 11, 11, 2006). The Martha Graham case presented substantially different facts, though, including a single creator and a corporation set up by her for tax reasons in which she became an employee.
In Pilobolus, you had four individuals, in the early 1970s, just as pop music was descending into a special type of Hell. After about 30 years, and financial problems, the company needed financial help. As part of securing that help, lenders may have required experienced management. That management came in 2004, and may have required that things be put on a "professional basis," that is, signed transfers and or work for hire agreements. Fur flew and one of the artistic directors was kicked out. Another supported his departed colleague, while two others seemingly sided with management, or at least went along with management's approach.
One result of that dispute is a dispute over ownership. The article quotes the Executive Director as saying "the dances had always been copyrighted by the company, and there was never any doubt that it owned the work." I searched the Copyright Office records and indeed the registrations - all of which were done in a single day, Sept. 26, 1991, 13 years before management came in - list the claimant as Pilobolus, Inc., and then give a work for hire attribution for the specific choreographers.
The registrations are though well more than 5 years after creation, and some of the works are 1909 Act works. I also don't know when the "Inc." was added to the company's name: one can't, after all, be a work for hire employee of a company that doesn't exist. One hopes this dispute doesn't become as protracted as the Martha Graham litigation; as noted above, the Second Circuit just issued another opinion in that case a little over a week ago.
The dispute recalls the bitter fight over rights to Martha Graham's choreography, sorted out by the Second Circuit in Martha Graham School & Dance Foundation, Inc. v. Martha Graham Center of Dance, Inc., 380 F.3d 624 (2d Cir. 2004)(Newman, J.), 2006 WL 1901021 (2d Cir. July 11, 11, 2006). The Martha Graham case presented substantially different facts, though, including a single creator and a corporation set up by her for tax reasons in which she became an employee.
In Pilobolus, you had four individuals, in the early 1970s, just as pop music was descending into a special type of Hell. After about 30 years, and financial problems, the company needed financial help. As part of securing that help, lenders may have required experienced management. That management came in 2004, and may have required that things be put on a "professional basis," that is, signed transfers and or work for hire agreements. Fur flew and one of the artistic directors was kicked out. Another supported his departed colleague, while two others seemingly sided with management, or at least went along with management's approach.
One result of that dispute is a dispute over ownership. The article quotes the Executive Director as saying "the dances had always been copyrighted by the company, and there was never any doubt that it owned the work." I searched the Copyright Office records and indeed the registrations - all of which were done in a single day, Sept. 26, 1991, 13 years before management came in - list the claimant as Pilobolus, Inc., and then give a work for hire attribution for the specific choreographers.
The registrations are though well more than 5 years after creation, and some of the works are 1909 Act works. I also don't know when the "Inc." was added to the company's name: one can't, after all, be a work for hire employee of a company that doesn't exist. One hopes this dispute doesn't become as protracted as the Martha Graham litigation; as noted above, the Second Circuit just issued another opinion in that case a little over a week ago.
Friday, July 21, 2006
Does the Derivative Right Add Up?
On June 30th, I did a post on the question of fixation and derivative works. Whether Fred von Lohmann could be stopped from singing in the shower by the derivative right (assuming an altered version, intentionally or not) even though it would be a private performance, was an unsolved question. The post mostly explored the difference between reproduction right (which requires fixation in copies or phonorecords) and the derivative right (which doesn't).
There is another difference between the two rights, though, namely, violation of the derivative right can occur not just by copying, but also by adding to the original. I use the term original here is the sense both of the intangible work and an intangible fixation: the reproduction right isn't violated if Marcel DuChamp painted a mustache on your physical painting, but the derivative right might be. Judge Posner wrote, in a case involving the addition of teletext to cable retransmissions, that "if the publisher of a book leaves the inside cover blank, the book seller cannot inscribe the Lord's Prayer on them in order to broaden the book's appeal," WGN Continental Broadcasting Co. v. United Video, Inc., 693 F.2d 622 (7th Cir. 1982). This is similar to a real such case, National Bank of Commerce v. Shaklee Corp., 503 F. Supp. 533 (W.D. Tex. 1980), where advertisements were affixed to to the copyrighted work. In a more recent case, National Conference of Bar Examiners v. Sacuzzo, 2003 WL 2146772, at *2 (S.D. Cal. June 10, 2003), infringement of the derivative right was found when student's recollections of taking secure tests was added to copyrighted material.
All of these cases are interesting because infringement was based not on copying the original, but adding to it. And there of course there are the subtraction cases, like Gilliam v. ABC, 538 F.2d 14 (2d Cir. 1976). Whether less is more, as Mies thought, or a bore as Robert Venturi thought, infringement can involve more or less.
There is another difference between the two rights, though, namely, violation of the derivative right can occur not just by copying, but also by adding to the original. I use the term original here is the sense both of the intangible work and an intangible fixation: the reproduction right isn't violated if Marcel DuChamp painted a mustache on your physical painting, but the derivative right might be. Judge Posner wrote, in a case involving the addition of teletext to cable retransmissions, that "if the publisher of a book leaves the inside cover blank, the book seller cannot inscribe the Lord's Prayer on them in order to broaden the book's appeal," WGN Continental Broadcasting Co. v. United Video, Inc., 693 F.2d 622 (7th Cir. 1982). This is similar to a real such case, National Bank of Commerce v. Shaklee Corp., 503 F. Supp. 533 (W.D. Tex. 1980), where advertisements were affixed to to the copyrighted work. In a more recent case, National Conference of Bar Examiners v. Sacuzzo, 2003 WL 2146772, at *2 (S.D. Cal. June 10, 2003), infringement of the derivative right was found when student's recollections of taking secure tests was added to copyrighted material.
All of these cases are interesting because infringement was based not on copying the original, but adding to it. And there of course there are the subtraction cases, like Gilliam v. ABC, 538 F.2d 14 (2d Cir. 1976). Whether less is more, as Mies thought, or a bore as Robert Venturi thought, infringement can involve more or less.
Thursday, July 20, 2006
Irreparable Harm Redux
On June 5th, I did a posting on the roots of the presumption of irreparable harm in copyright law and otherwise ragged on the whole idea as a general presumption. The presumption has been applied in trademark cases, and in the Second Circuit (the source of the copyright presumption too), is traceable to Omega Imp. Corp. v. Petri-Kline Camera Corp., 451 F.2d 1190 (2d Cir. 1971).
On July 6, 2006, Judge Gerard Lynch (SDNY) issued an opinion in SMJ Group, Inc. v. 417 Lafayette Restaurant LCC, 2006 WL 1881768, a trademark case where plaintiff made the mistake of resting on the presumption. Plaintiff had made out a likelihood of success on the merits and apparently thought that was the end of the matter. Not so fast said Judge Lynch, in a scholarly review of the presumption: a perfunctory citation "and reliance on the general presumption of irreparable harm is similarly insufficient. The general presumption is not automatic ... ." The motion for an injunction was then denied.
Praise the Lord; one can only hope others will notice in the copyright area, or that Judge Lynch applies the same reasoning to his next copyright case.
On July 6, 2006, Judge Gerard Lynch (SDNY) issued an opinion in SMJ Group, Inc. v. 417 Lafayette Restaurant LCC, 2006 WL 1881768, a trademark case where plaintiff made the mistake of resting on the presumption. Plaintiff had made out a likelihood of success on the merits and apparently thought that was the end of the matter. Not so fast said Judge Lynch, in a scholarly review of the presumption: a perfunctory citation "and reliance on the general presumption of irreparable harm is similarly insufficient. The general presumption is not automatic ... ." The motion for an injunction was then denied.
Praise the Lord; one can only hope others will notice in the copyright area, or that Judge Lynch applies the same reasoning to his next copyright case.
Wednesday, July 19, 2006
Catwalk Meowing
My favorite train newspaper, the New York Post (the one with headlines like "Headless body found in topless bar"), had a story today on a copying of design sketches for Bravo's "Project Runway" show. Here's the link. The story states that contestant Keith Michael "may have plagiarized" design sketches he submitted in his application to be on the show. The article states that "some people suggest" (this is journalism, after all) that Michael used Photoshop to scan photographs and convert them into drawings. He would, according to the theory, then have submitted the drawings as if they were his. The article has side by side comparisons.
Michael is not reported in the story as necessarily denying this, although "Speculation is high that the judges may have known or learned later that Michael submitted copied sketches and will boot him out of the contest on an upcoming episode."
Leaving aside whether ethics play a role in such an industry, on the copyright side of things, there would be little chance of infringement of a design interest, although the photographer whose photos was copied might.
Michael is not reported in the story as necessarily denying this, although "Speculation is high that the judges may have known or learned later that Michael submitted copied sketches and will boot him out of the contest on an upcoming episode."
Leaving aside whether ethics play a role in such an industry, on the copyright side of things, there would be little chance of infringement of a design interest, although the photographer whose photos was copied might.
Monday, July 17, 2006
Chihuly in the Bronx
I have done two postings on the suit brought by Dale Chilhuly for copyright infringement of his glass sculptures, one here and one here. This weekend, I went to a unique exhibit of his works at the Bronx Botanical Gardens. Unique, because of the settings: the works were displayed in fountains, hidden among plants, in ponds, all over the grounds. There were works for a desert setting, for a rain forest, and many other habitats. The show was fantastic, and my twins loved it too. Here's a link to the Botanical Gardens's online brochure. The show runs to the end of October.
On the copyright side of things, I saw works that were complex and creative as well as works that were not much different than you would see at Home Depot. But even for the highly creative works, the scope of protection would seem narrow, limited to that particular expression, and certainly not extending to style or technique.
On the copyright side of things, I saw works that were complex and creative as well as works that were not much different than you would see at Home Depot. But even for the highly creative works, the scope of protection would seem narrow, limited to that particular expression, and certainly not extending to style or technique.
Thursday, July 13, 2006
Dinosaurs, Claim and Issue Preclusion
Dinosaurs seem to have an eternal hold on children's (and many adults') imagination. My 5-year old twins have many dinosaur books and I have read them all to them, many times; last night my son went to sleep in dinosaur pajamas, and went off to school today with a dinosaur raincoat. In the last week, though, the Third Circuit decided a dispute over a dinosaur board game that involved the arcana of claim and issue preclusion, Hofman v. Pressman Toy Corp., 2006 WL 1876647 (3d Cir. July 7, 2006).
As the court of appeals observes, in Hofmann's first suit, 790 F.Supp. 498 (D.N.J.1990), aff'd, 947 F.2d 935 (3d Cir.1991): "Judge Debevoise granted summary judgment against , holding that she could not make out a copyright claim because there was no evidence that the defendants had access to her work. Hofmann filed four subsequent complaints in the District Court, raising the same claim ... . Each of those complaints was dismissed, and the dismissals were affirmed on appeal. " That's why the preclusion issue came to the fore. As explained by the court:
Claim preclusion and issue preclusion are related, but distinct, concepts. Whereas claim preclusion prevents a party from re-litigating claims she might have but did not assert in the first action, issue preclusion forecloses only a matter actually litigated and essential to the decision. Both claim and issue preclusion serve the same policy goals of conservation of judicial resources, fostering reliance on judicial action, and avoidance of the expense and vexation accompanying multiple lawsuits. Issue preclusion promotes the policy that “a losing litigant deserves no rematch after a defeat fairly suffered, in adversarial proceedings, on an issue identical in substance to the one he subsequently seeks to raise.
Old-timers may recall doctrines called re judicata and collateral estoppel. Those terms have been replaced by some courts, including the Supreme Court, by claim preclusion (replacing res judicata) and issue preclusion (replacing collateral estoppel). See Migra v. Warren City School Dist. Bd. of Educ., 465 U.S. 75 (1984). There is even an informative discussion by then Judge Ruth Bader Ginsburg, The Work of Professor Allen Delker Vestal, 70 Iowa L. Rev. 13 (1984). Dinosaurs are, however, likely to outlive any efforts to clarify the problems raised by the inherently messy nature of litigation.
As the court of appeals observes, in Hofmann's first suit, 790 F.Supp. 498 (D.N.J.1990), aff'd, 947 F.2d 935 (3d Cir.1991): "Judge Debevoise granted summary judgment against , holding that she could not make out a copyright claim because there was no evidence that the defendants had access to her work. Hofmann filed four subsequent complaints in the District Court, raising the same claim ... . Each of those complaints was dismissed, and the dismissals were affirmed on appeal. " That's why the preclusion issue came to the fore. As explained by the court:
Claim preclusion and issue preclusion are related, but distinct, concepts. Whereas claim preclusion prevents a party from re-litigating claims she might have but did not assert in the first action, issue preclusion forecloses only a matter actually litigated and essential to the decision. Both claim and issue preclusion serve the same policy goals of conservation of judicial resources, fostering reliance on judicial action, and avoidance of the expense and vexation accompanying multiple lawsuits. Issue preclusion promotes the policy that “a losing litigant deserves no rematch after a defeat fairly suffered, in adversarial proceedings, on an issue identical in substance to the one he subsequently seeks to raise.
Old-timers may recall doctrines called re judicata and collateral estoppel. Those terms have been replaced by some courts, including the Supreme Court, by claim preclusion (replacing res judicata) and issue preclusion (replacing collateral estoppel). See Migra v. Warren City School Dist. Bd. of Educ., 465 U.S. 75 (1984). There is even an informative discussion by then Judge Ruth Bader Ginsburg, The Work of Professor Allen Delker Vestal, 70 Iowa L. Rev. 13 (1984). Dinosaurs are, however, likely to outlive any efforts to clarify the problems raised by the inherently messy nature of litigation.
Wednesday, July 12, 2006
As Dirty as We Wanna Be
Here is a link I created to the Colorado "CleanFlicks" decision. To recap, the case involves the unauthorized sale of DVDs and videocassettes that have been altered, without permission, by commercial "family friendly" companies to delete sex, nudity, profanity and gory violence. (I wonder how Mel Gibson's Christ movie fared).
The defendant companies begin with a lawfully made copy and then make unauthorized digital copies which are edited in the aforementioned manner. The case does not involve the sale of filters that are used during the viewing and which do not themselves alter the hard copy: that activity was the subject of the 2005 Family Movie Act, P.L. No. 109-9.
The studios sued for violation of Sections 106(1)-(3) and won summary judgment and a permanent injunction. The defendants asserted fair use. One interesting aspect of the fair use discussion is a perceived paradox on the transformative-derivative work issue. To be an unauthorized derivative work, there needs to be an alteration to the work; yet, to excuse that same conduct under fair use, defendant claimed the alteration was transformative. Haw! said the studios, you admit you are a dirty infringer (pun intended). The studios meanwhile were happy to assert there was an alteration, but then had the reverse paradox in claiming there was no alteration at the fair use stage. Haw! said the family friendly folks, you admit our use is transformative!
There really isn't a paradox, because altering something doesn't make it automatically transformative or fair use: if I crop off the edges of a fabric design to make it fit better for my textile machines, I have altered the original, but hardly "transformed it." The family friendly folks had a stronger case than that, but it can't be said that they provided any new insights or perspectives on the works and that is what Judge Leval meant by transformative.
Still, the case highlights once again, the square peg in the round hole problem that is rapidly overtaking fair use analysis.
The defendant companies begin with a lawfully made copy and then make unauthorized digital copies which are edited in the aforementioned manner. The case does not involve the sale of filters that are used during the viewing and which do not themselves alter the hard copy: that activity was the subject of the 2005 Family Movie Act, P.L. No. 109-9.
The studios sued for violation of Sections 106(1)-(3) and won summary judgment and a permanent injunction. The defendants asserted fair use. One interesting aspect of the fair use discussion is a perceived paradox on the transformative-derivative work issue. To be an unauthorized derivative work, there needs to be an alteration to the work; yet, to excuse that same conduct under fair use, defendant claimed the alteration was transformative. Haw! said the studios, you admit you are a dirty infringer (pun intended). The studios meanwhile were happy to assert there was an alteration, but then had the reverse paradox in claiming there was no alteration at the fair use stage. Haw! said the family friendly folks, you admit our use is transformative!
There really isn't a paradox, because altering something doesn't make it automatically transformative or fair use: if I crop off the edges of a fabric design to make it fit better for my textile machines, I have altered the original, but hardly "transformed it." The family friendly folks had a stronger case than that, but it can't be said that they provided any new insights or perspectives on the works and that is what Judge Leval meant by transformative.
Still, the case highlights once again, the square peg in the round hole problem that is rapidly overtaking fair use analysis.
Tuesday, July 11, 2006
United States Government: DMCA Scofflaw?
The Executive Branch of our government has been on an IP public relations binge lately, strutting like a peacock and showing off its finest colors of commitment to strong IP rights. Alberto Gonzalez has been paraded out much like Johnny Depp without the eyeliner, vanquishing those pesky pirates. The Office of United States Trade Representative (before Mr. Zoellick's recent departure to Wall Street), strides the globe like the Colossus of Rhodes, mau-mauing ("Mzungu Aende Ulaya — Mwafrika Apate Uhuru!") small and medium size countries into agreeing to DMCA and even DMCA+ provisions. The Administration is solidly on message: IP 'R U.S.
Except, perhaps when it comes to the Government's own conduct. In Blueport Co. LLP v. United States, the Government successfully asserted a defense of sovereign immunity against a charge that it had violated 17 USC Section 1201, the DMCA's anti-circumvention provision. Federal Federal Claims Judge Lawrence Block described the factual allegations:
The bare facts of the matter now before the court are quite simple. It involves a copyrighted computer management information program and the alleged attempts by the U.S. Air Force to circumvent technological safeguards designed to protect the program. Plaintiff is a limited liability corporation, organized in the State of Idaho. On March 6, 2000, plaintiff acquired all the rights to a computer program entitled AUMD and AUMD Admin (“computer program”) from Mr. Mark Davenport, who was then a Technical Sergeant in the Air Force. Allegedly, the computer program greatly increased the efficiency with which Air Force manpower resource requirement reports were generated. The computer program contained an automatic expiration function, so that the program would stop operating on a particular date. This feature was included in the program to control licensing and to prevent unauthorized use beyond the license expiration date. Plaintiff alleges, in essence, that Air Force personnel unlawfully “hacked” into the computer program to alter the automatic expiration function, to the Air Force's advantage.
The defense was not as one might have expected, that the work was ab initio one of the United States government and therefore not protected by virtue of Section 105, but that the government cannot - ever - be sued for DMCA violations because Congress did not expressly provide for express waiver of such immunity. Plaintiff referred the court to a number of exemptions in Section 1201 that refer to conduct by federal employees, exemptions that would not make sense absent liability, but the bottom line was simple: without express liability, the Government is free to be a DMCA scofflaw.
The ball is now in Congress's court.
Except, perhaps when it comes to the Government's own conduct. In Blueport Co. LLP v. United States, the Government successfully asserted a defense of sovereign immunity against a charge that it had violated 17 USC Section 1201, the DMCA's anti-circumvention provision. Federal Federal Claims Judge Lawrence Block described the factual allegations:
The bare facts of the matter now before the court are quite simple. It involves a copyrighted computer management information program and the alleged attempts by the U.S. Air Force to circumvent technological safeguards designed to protect the program. Plaintiff is a limited liability corporation, organized in the State of Idaho. On March 6, 2000, plaintiff acquired all the rights to a computer program entitled AUMD and AUMD Admin (“computer program”) from Mr. Mark Davenport, who was then a Technical Sergeant in the Air Force. Allegedly, the computer program greatly increased the efficiency with which Air Force manpower resource requirement reports were generated. The computer program contained an automatic expiration function, so that the program would stop operating on a particular date. This feature was included in the program to control licensing and to prevent unauthorized use beyond the license expiration date. Plaintiff alleges, in essence, that Air Force personnel unlawfully “hacked” into the computer program to alter the automatic expiration function, to the Air Force's advantage.
The defense was not as one might have expected, that the work was ab initio one of the United States government and therefore not protected by virtue of Section 105, but that the government cannot - ever - be sued for DMCA violations because Congress did not expressly provide for express waiver of such immunity. Plaintiff referred the court to a number of exemptions in Section 1201 that refer to conduct by federal employees, exemptions that would not make sense absent liability, but the bottom line was simple: without express liability, the Government is free to be a DMCA scofflaw.
The ball is now in Congress's court.
Monday, July 10, 2006
Can the 2d Circuit's Injunction Standard Last?
In deciding whether to grant injunctive relief, the Supreme Court and every circuit other than the Second Circuit (OK, the Ninth Circuit part of the time) uses the traditional four factor analysis. See eBay Inc. v. MercExchange, L.L.C., 126 S.Ct. 1837 (2006): (l) a likelihood of prevailing on the merits, (2) irreparable harm if interim relief is denied, (3) balancing of hardships (harm to defendant if the injunction is granted versus the harm to plaintiff if the injunction is denied); and (4) weighing the effect on the public interest, including on non-parties
In the Second Circuit, though a two-part test for private claims is used, requiring a showing of (1) irreparable harm and (2) either (a) a likelihood of success on the merits or (b) sufficiently serious questions going to the merits as the make them a fair ground for litigation, and a balance of hardships tipping ‘decidedly” or “sharply” in movant’s favor. Under this formulation, a showing of irreparable harm is required under either prong; indeed the circuit has stated “in most cases the moving party must first demonstrate that [irreparable] injury is likely before the other requirements for the other requirements for the issuance of an injunction will be considered.” Zervos v. Verizon of N.Y. Inc., 252 F.3d 163, 172 (2d Cir. 2003) (quoting Rodriguez v. DeBuono, 175 F.3d 227, 234-235 (2d Cir. 1999)).
The origins of the prong 2(b) - sufficiently serious questions going to the merits as the make them a fair ground for litigation, and a balance of hardships tipping ‘decidedly” or “sharply” in movant’s favor – may be traced to Judge Jerome Frank’s 1953 opinion in Hamilton Watch Co. v. Benrus Watch Co., 206 F.3d 738 (2d Cir. 1953). Hamilton alleged violation of Section 7 of the Clayton Act, claiming Benrus had bought a large stock of common shares in Hamilton for the purchase of gaining control over it. The complaint requested that Benrus be ordered to sell the shares. Plaintiff also requested a preliminary injunction (principally against voting the shares), which was entered. Defendant asserted its actions were lawful, a position the court of appeals cast doubt on. The irreparable harm took a number of forms, one of which was the immediate ability to elect a director to the Board of Directors and access to confidential and highly competitive materials.
There seems little doubt the injunction could have been affirmed applying traditional equitable principles; but in a throw-away passage that has inexplicably become a bedrock of Second Circuit jurisprudence, it was stated:
"To justify a temporary injunction it is not necessary that the
plaintiff’s right to a final decision, after a trial be absolutely
certain, wholly without doubt; if the other elements are present
(i.e., the balance of hardships tips decidedly toward plaintiff), it
will ordinarily be enough that the plaintiff has raised questions
going to the merits so serious, substantial, difficult and doubtful,
as to make them a fair ground for litigation and thus for more
deliberate investigation.
206 F.2d at 740.
These remarks are striking both for their lack of any support in centuries of equity jurisprudence and for making the case against issuance of an injunction. Likelihood of success on the merits, not compliance with Federal Rule of Civil Procedure 8’s liberal pleading requirements, is a touchstone of injunctive relief as is irreparable harm: if the most that can be said about your case is that you have raised doubts about the merits of your own case, but that it is a serious case, you are well below any acceptable likelihood of success on the merits; indeed, abolition of the likelihood of success requirement seems to be the sole pupose for the Hamilton test.
Although in the 50 years plus years since Hamilton the Second Circuit has curbed some of the wilder implications of the opinion, it is well past time for the court of appeals to abandon its test. In this regard, it should be noted that the Supreme Court has not only never approved of the Second Circuit’s approach, but instead itself, in 2006, strongly endorsed the traditional four-factor test in eBay Inc. v. MercExchange, L.L.C.,
In the Second Circuit, though a two-part test for private claims is used, requiring a showing of (1) irreparable harm and (2) either (a) a likelihood of success on the merits or (b) sufficiently serious questions going to the merits as the make them a fair ground for litigation, and a balance of hardships tipping ‘decidedly” or “sharply” in movant’s favor. Under this formulation, a showing of irreparable harm is required under either prong; indeed the circuit has stated “in most cases the moving party must first demonstrate that [irreparable] injury is likely before the other requirements for the other requirements for the issuance of an injunction will be considered.” Zervos v. Verizon of N.Y. Inc., 252 F.3d 163, 172 (2d Cir. 2003) (quoting Rodriguez v. DeBuono, 175 F.3d 227, 234-235 (2d Cir. 1999)).
The origins of the prong 2(b) - sufficiently serious questions going to the merits as the make them a fair ground for litigation, and a balance of hardships tipping ‘decidedly” or “sharply” in movant’s favor – may be traced to Judge Jerome Frank’s 1953 opinion in Hamilton Watch Co. v. Benrus Watch Co., 206 F.3d 738 (2d Cir. 1953). Hamilton alleged violation of Section 7 of the Clayton Act, claiming Benrus had bought a large stock of common shares in Hamilton for the purchase of gaining control over it. The complaint requested that Benrus be ordered to sell the shares. Plaintiff also requested a preliminary injunction (principally against voting the shares), which was entered. Defendant asserted its actions were lawful, a position the court of appeals cast doubt on. The irreparable harm took a number of forms, one of which was the immediate ability to elect a director to the Board of Directors and access to confidential and highly competitive materials.
There seems little doubt the injunction could have been affirmed applying traditional equitable principles; but in a throw-away passage that has inexplicably become a bedrock of Second Circuit jurisprudence, it was stated:
"To justify a temporary injunction it is not necessary that the
plaintiff’s right to a final decision, after a trial be absolutely
certain, wholly without doubt; if the other elements are present
(i.e., the balance of hardships tips decidedly toward plaintiff), it
will ordinarily be enough that the plaintiff has raised questions
going to the merits so serious, substantial, difficult and doubtful,
as to make them a fair ground for litigation and thus for more
deliberate investigation.
206 F.2d at 740.
These remarks are striking both for their lack of any support in centuries of equity jurisprudence and for making the case against issuance of an injunction. Likelihood of success on the merits, not compliance with Federal Rule of Civil Procedure 8’s liberal pleading requirements, is a touchstone of injunctive relief as is irreparable harm: if the most that can be said about your case is that you have raised doubts about the merits of your own case, but that it is a serious case, you are well below any acceptable likelihood of success on the merits; indeed, abolition of the likelihood of success requirement seems to be the sole pupose for the Hamilton test.
Although in the 50 years plus years since Hamilton the Second Circuit has curbed some of the wilder implications of the opinion, it is well past time for the court of appeals to abandon its test. In this regard, it should be noted that the Supreme Court has not only never approved of the Second Circuit’s approach, but instead itself, in 2006, strongly endorsed the traditional four-factor test in eBay Inc. v. MercExchange, L.L.C.,
Friday, July 07, 2006
Charlotte Rampling and Lewis Flacks
English actress Charlotte Rampling has been much in the news lately, due to her starring role in a trite, pretentious French film called "Heading South." There is a short piece about Ms. Rampling in this week's New Yorker magazine (pp.37-38), and reviews in newspapers. Today's New York Times sums it up: "The Ache of Blinding Lust in a Sexual Paradise Lost." Except the reviewer, Stephen Holden liked the movie, alot. Set in Haiti in the 1970s, the movie explores sex and politics, power and oppression, and middle-age desire for erotic rapture: I'll take World Cup soccer. One is happy, though, for Ms. Rampling (she is 60 and plays a 55 year old in the movie). She has lived in France since the 1970s, around the time of her most famous role, in the Night Porter (1974).
This leads, of course, to the late Lewis Flacks, a former international copyright specialist at the Copyright Office. Lewis was a huge fan of Ms. Rampling's. In his office he kept a book of revealing photographs of her by Dirk Bogarde (her co-star in The Night Porter), called "Charlotte Rampling: With Compliments." In addition to her feral, erotic qualities, Lewis was particularly taken by her role in The Night Porter: given the subject matter of that movie and Lewis' background, there were some deep problems with this fascination. And Lewis was a very complex man, combining haut and bas as if they all part of the same instinct: he dressed like a government lawyer's version of David Lindley, yet appreciated nuances of French couture (especially on Ms. Rampling); smoked disgusting cigars, yet loved fine wine; had an encyclopedic knowledge of movies, yet loved to fritter away time playing simple console video games and drinking bad beer in the basement of a dive near the Copyright Office on Pennyslvania Avenue.
He had an astonishing intellect and feel for how to address international issues in an era when few were interested in them. Indeed, it was Lewis who was responsible for the Copyright Office's important role in the government's use of intellectual property as a component of trade policy, due to his relationship with Emery Simon, then at USTR. In the end, Lewis left the Office after a long career and joined IFPI in London. He is sorely missed as a true original.
This leads, of course, to the late Lewis Flacks, a former international copyright specialist at the Copyright Office. Lewis was a huge fan of Ms. Rampling's. In his office he kept a book of revealing photographs of her by Dirk Bogarde (her co-star in The Night Porter), called "Charlotte Rampling: With Compliments." In addition to her feral, erotic qualities, Lewis was particularly taken by her role in The Night Porter: given the subject matter of that movie and Lewis' background, there were some deep problems with this fascination. And Lewis was a very complex man, combining haut and bas as if they all part of the same instinct: he dressed like a government lawyer's version of David Lindley, yet appreciated nuances of French couture (especially on Ms. Rampling); smoked disgusting cigars, yet loved fine wine; had an encyclopedic knowledge of movies, yet loved to fritter away time playing simple console video games and drinking bad beer in the basement of a dive near the Copyright Office on Pennyslvania Avenue.
He had an astonishing intellect and feel for how to address international issues in an era when few were interested in them. Indeed, it was Lewis who was responsible for the Copyright Office's important role in the government's use of intellectual property as a component of trade policy, due to his relationship with Emery Simon, then at USTR. In the end, Lewis left the Office after a long career and joined IFPI in London. He is sorely missed as a true original.
Thursday, July 06, 2006
Can You Give it Away?
Today's Wall Street Journal (online subscription required) has an article in the Marketplace section by Nick Timiraos entitled "Free, Legal and Ignored." The article focuses on the new Napster in the university environment and the effort of universities to provide free access to music via Napster and other authorized services. Universities' interest in providing such services is not altruistic or pampering: they want to avoid lawsuits and preserve bandwith: at Vanderbilt University, a university official is quoting as saying the school saved $75,000 a year in network costs by providing the new Napster.
Still, according to the article, the response of students has been underwhelming, with some colleges dropping the service. The reasons for students' lack of interest vary; some programs do not permit retention of downloads after graduation: one student is quoted as saying "After I read that, I decided I didn't even want to try [the service]." Another student is quoted as saying "People still want to have a music collection. Music listeners like owning their music, not renting," a quaint sentiment considering how ownership usually comes about in such situations.
And then there is the 19% penetration of Macs and the 42% penetration of iPods. The chief information at Case Western Reserve University is quoted as saying "We were not in a position to offer an alternative to iTunes. The alternatives looked like they had more sizzle than steak." So maybe people will buy, after all, if the product is right. Indeed, today's Hollywood Reporter (p.6), reports "Looking at the entire sales picture - comprising physical albums, digital albums and digital tracks - overall sales to date this year have actually gained about one-tenth of a percentage point over the first six months of '05." Physical albums are reported to have dropped 12 million units, digital albums increased 8.2 million units, and digital tracks gained a whopping 122 million units, perhaps indicating the wave of the future.
Given the use of statistics in the Napster litigation on CD buying patterns in university areas, it might be interesting to conduct studies of universities which offered such services but then stopped.
Still, according to the article, the response of students has been underwhelming, with some colleges dropping the service. The reasons for students' lack of interest vary; some programs do not permit retention of downloads after graduation: one student is quoted as saying "After I read that, I decided I didn't even want to try [the service]." Another student is quoted as saying "People still want to have a music collection. Music listeners like owning their music, not renting," a quaint sentiment considering how ownership usually comes about in such situations.
And then there is the 19% penetration of Macs and the 42% penetration of iPods. The chief information at Case Western Reserve University is quoted as saying "We were not in a position to offer an alternative to iTunes. The alternatives looked like they had more sizzle than steak." So maybe people will buy, after all, if the product is right. Indeed, today's Hollywood Reporter (p.6), reports "Looking at the entire sales picture - comprising physical albums, digital albums and digital tracks - overall sales to date this year have actually gained about one-tenth of a percentage point over the first six months of '05." Physical albums are reported to have dropped 12 million units, digital albums increased 8.2 million units, and digital tracks gained a whopping 122 million units, perhaps indicating the wave of the future.
Given the use of statistics in the Napster litigation on CD buying patterns in university areas, it might be interesting to conduct studies of universities which offered such services but then stopped.
Wednesday, July 05, 2006
Gentlemen, Start Your Engines!
A recent very well written and reasoned opinion from the Northern District of Iowa, International Motor Contest Association, Inc. v. Staley , 2006 WL 1667889 (MarkW. Bennett, J), provides an excellent discussion (in a 52 page opinion) for those interested in the copyright misuse and unclean hands defenses.
Plaintiff International Motor Contest Association claims to be the oldest sanctioned (an ambiguous word, and anyway sanctioned by whom?) automobile racing association in the U.S. It claims copyright in its rules. Defendant, an individual, also promotes race events. IMCA claims defendant copied its rules. Defendant asserted a number of affirmative defenses and counterclaims, including misuse and unclean hands. Plaintiff them filed a motion to dismiss based in part on the Noerr-Pennington doctrine. The court rightly held that that doctrine only gives plaintiffs (limited) immunity from tort actions arising from the filing of the suit; it does not knock out affirmative defenses like misuse and unclean hands.
A large part of the opinion is devoted to a survey of the misuse defense in the courts. Plaintiff's argument here was odd: the misuse defense was alleged to fail because it asserted only "antitrust and anticompetitive conduct." Usually it is claimed that the defense extends only to such behavior. As the court noted: "Indeed, the question has more often been whether the defense includes other kinds 'misuse' besides antitrust violations and anti-competitive conduct."
Judge Posner has been a vocal proponent of a misuse defense for such "other kinds" of misuse, such as asserting rights beyond what the Copyright Act grants and using rights for ulterior purposes. I share that view, but there are some conceptual questions that should be addressed, and the IMCA court may ultimately face them too: if it is held that the IMCA does not possess copyright in its rules or that Staley has not infringed them, there is no technical role for a misuse defense since it is an affirmative defense. In other words, where plaintiff overstates its rights, it loses on the merits.
If it is held that IMCA does have a valid copyright and that Staley has infringed it, affirmative defenses do come into play, but might not it be a a difficult row to hoe once defendant's conduct has been found to have violated plaintiff's rights? Where, in other words, is the "mis"use? One possibility is that copyright has been used to influence other, non-copyright behavior, but outside of antitrust and anti-competitive behavior, the types of such behavior that would be so egregious as to be struck down is less clear, hence the logical problem posed by the defense.
Plaintiff International Motor Contest Association claims to be the oldest sanctioned (an ambiguous word, and anyway sanctioned by whom?) automobile racing association in the U.S. It claims copyright in its rules. Defendant, an individual, also promotes race events. IMCA claims defendant copied its rules. Defendant asserted a number of affirmative defenses and counterclaims, including misuse and unclean hands. Plaintiff them filed a motion to dismiss based in part on the Noerr-Pennington doctrine. The court rightly held that that doctrine only gives plaintiffs (limited) immunity from tort actions arising from the filing of the suit; it does not knock out affirmative defenses like misuse and unclean hands.
A large part of the opinion is devoted to a survey of the misuse defense in the courts. Plaintiff's argument here was odd: the misuse defense was alleged to fail because it asserted only "antitrust and anticompetitive conduct." Usually it is claimed that the defense extends only to such behavior. As the court noted: "Indeed, the question has more often been whether the defense includes other kinds 'misuse' besides antitrust violations and anti-competitive conduct."
Judge Posner has been a vocal proponent of a misuse defense for such "other kinds" of misuse, such as asserting rights beyond what the Copyright Act grants and using rights for ulterior purposes. I share that view, but there are some conceptual questions that should be addressed, and the IMCA court may ultimately face them too: if it is held that the IMCA does not possess copyright in its rules or that Staley has not infringed them, there is no technical role for a misuse defense since it is an affirmative defense. In other words, where plaintiff overstates its rights, it loses on the merits.
If it is held that IMCA does have a valid copyright and that Staley has infringed it, affirmative defenses do come into play, but might not it be a a difficult row to hoe once defendant's conduct has been found to have violated plaintiff's rights? Where, in other words, is the "mis"use? One possibility is that copyright has been used to influence other, non-copyright behavior, but outside of antitrust and anti-competitive behavior, the types of such behavior that would be so egregious as to be struck down is less clear, hence the logical problem posed by the defense.
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