Friday, March 31, 2006

Cablevision and RS DVRs

A recent article in IP Law 360 describes a new service Cablevision is offering that should provide yet another test case for third party liability over services that facilitate the copying of movies. The article precedes articles in today's news services that motion picture studios, through Movielink, will be releasing movies for certain types of downloading on the same time that they are released on DVD.

The IP Law 360 article is both a bit overwrought in its description of the issues and skimpy on the details of how the service will work, but from other material I have seen, Cablevision will offer a remote-storage video recorder service (RS-DVR) later this year. Remote storage refers to the fact that the storage of the movies will be on the company's own servers, rather than as with TiVo or other devices, on the consumers' own appliance. That initially sounds like what did, but there is this very significant difference: consumers, in their homes, are the ones who initiate the recording by scrolling through Cablevision's channel guide, and will control the copies, that is, the ability to view or delete the programming. Moreover, there will be storage limits. That sounds like fair use to me.

Thursday, March 30, 2006

Paul Newman and Fair use

Yesterday's Stamford Connecticut Advocate had an article noting that the state Senate's Judiciary Committee has shelved a bill to provide a right of publicity despite lobbying efforts by Paul Newman, Christopher Plummer, and Charles Grodin. The bill's sponsor, Senator Andrew MacDonald, is quoted as saying "There just wasn't enough time for us to work through what the difference between between political satire and parody is, and what would be justifiable for a public figure to expect protection for." Motion picture studios argued against the bill, saying that the bill "suffered from ... severe First Amendment problems, particularly because the bill applied to all individuals," adding "Technically, anything from Jon Stewart's show to parodies of political figures to movies like 'Contact' and 'Forest Gump' where you're using news footage and that kind of thing of public figures would be subject to litigation."

Other courts, particularly in California have not read publicity rights so broadly, and have incorporated copyright fair use principles, not in toto, but as, appropriate, in pari passu. In Comedy III Productions, Inc. v. Gary Saderup, Inc., 25 Cal. 4th 387 (Cal. 2001), the California Supreme Court wrote:

"Some commentators have proposed importing the fair use defense from copyright law (17 U.S.C. § 107), which has the advantage of employing an established doctrine developed from a related area of the law. Others disagree, pointing to the murkiness of the fair use doctrine and arguing that the idea/expression dichotomy, rather than fair use, is the principal means of reconciling copyright protection and First Amendment rights. We conclude that a wholesale importation of the fair use doctrine into right of publicity law would not be advisable. At least two of the factors employed in the fair use test, "the nature of the copyrighted work" and "the amount and substantiality of the portion used" (17 U.S.C. § 107(2), (3)), seem particularly designed to be applied to the partial copying of works of authorship "fixed in [a] tangible medium of expression" (17 U.S.C. § 102); it is difficult to understand why these factors would be especially useful for determining whether the depiction of a celebrity likeness is protected by the First Amendment.Nonetheless, the first fair use factor--"the purpose and character of the use" (17 U.S.C. § 107(1))--does seem particularly pertinent to the task of reconciling the rights of free expression and publicity. As the Supreme Court has stated, the central purpose of the inquiry into this fair use factor "is to see, in Justice Story's words, whether the new work merely 'supersede[s] the objects' of the original creation, or instead adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message; it asks, in other words, whether and to what extent the new work is 'transformative.'Although such transformative use is not absolutely necessary for a finding of 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. (1994) 510 U.S. 569, 579 This inquiry into whether a work is "transformative" appears to us to be necessarily at the heart of any judicial attempt to square the right of publicity with the First Amendment. As the above quotation suggests, both the First Amendment and copyright law have a common goal of encouragement of free expression and creativity, the former by protecting such expression from government interference, the latter by protecting the creative fruits of intellectual and artistic labor. The right of publicity, at least theoretically, shares this goal with copyright law. When artistic expression takes the form of a literal depiction or imitation of a celebrity for commercial gain, n9 directly trespassing on the right of publicity without adding significant expression beyond that trespass, the state law interest in protecting the fruits of artistic labor outweighs the expressive interests of the imitative artist. Inquiry into the "purpose and character" of the work in copyright law also includes "whether such use is of a commercial nature or is for nonprofit educational purposes." (17 U.S.C. § 107(1).) It could be argued that reproduction of a celebrity likeness for noncommercial use--e.g., T-shirts of a recently deceased rock musician produced by a fan as a not-for-profit tribute--is a form of personal expression and therefore more worthy of First Amendment protection. "

Two years later, in Edgar Winter v. DC Comics, 30 Cal. 4th 881 (Cal. 2003), the California Supreme Court revisited the issue in a dispute over DC Comics' five-volume miniseries featuring two singing cowboys, finding the use to be one of parody. In the Connecticut examples of "Contact" and "Forrest Gump," those would uses, under copyright law, be considered transformative. Perhaps in the next iteration of the Connecticut bill there will be a fair-use type exception, but in any event, it is interesting to see two different areas of law come closer together.

Tuesday, March 28, 2006

Injunctions, Patents, and Copyrights

The Washington Post carried this story about the US Government's brief before the Supreme Court in MercExhange v. eBay. One of the disputes is whether injunctions in patent cases should be issued automatically. It was, of course, the imminent threat of an injunction in the Blackberry dispute that led to the astonishing $620 million settlement. There are different issues with injunctive relief in patent than copyright cases, including compulsory licensing and whether the plaintiff was "working" the patent, and it may be that those differences are sufficient to render the Supreme Court's eventual decision in the eBay case to be of little relevance in copyright cases. Indeed, it is amusing only in a sardonic sense to read the Court's opinions, where it variously finds an historic "kinship" between the two areas, or finds them quite different.

In the Ninth Circuit, in copyright cases, preliminary injunctions seem to be virtually automatic, but it is helpful to think about why preliminary injunctive relief should be awarded. Preliminary injunctive relief is supposed to be the exception, not the rule, an extraordinary remedy, one of the most drastic tools in the arsenal of judicial remedies," a "very far reaching power to be granted only sparingly and in limited circumstances and not as a matter of right." The purpose of temporary injunctive relief is frequently stated to be to preserve the status quo, or to "preserve the existing state of things until the rights of the parties can be fully investigated and determined." For this reason, a preliminary injunction is sometimes referred to as preserving the relative positions of the parties.

While preserving the status quo seems to evoke ancient concerns, the roots are quite shallow, and as a main goal of preliminary injunctive relief did not emerge until late in the nineteenth century. An injunction can, and frequently does, alter the parties’ positions. When an injunction is granted, the defendant’s conduct is stopped in plaintiff's favor, sometimes to defendant’s extreme detriment. This effect was well stated in an 1896 copyright case from the Circuit Court for the District of Massachusetts, Ladd v. Oxnard: [P]atent, trade-mark, and copyright cases . . . do not ordinarily preserve the status quo. . . . [T]hey sometimes operate to suspend temporarily the entire establishment or business of the respondent, and sometimes break them up as to result in permanent destruction."

Conversely, where an injunction is denied, defendant’s ongoing conduct cannot be described as preserving the plaintiff's pre-infringement position. Indeed, the copyright owner may be considerably worse off. In a traditional copyright infringement action, any decision on preliminary relief can only loosely be described as preserving the status quo. Even in the best of circumstances (where a fair degree of information is available to the court), crafting an injunction that will approximate a world that has in fact changed poses formidable difficulties. Answering the question "What would have happened had the defendant not appeared on the scene?" inherently involves speculation and therefore risk of error.

In technology cases, the large number of infringing uses for the technology sought to be enjoined, relevant for third party-liability, is also relevant in determining the harm to the public factor for injunctive relief. One is also, however, thrown on the horns of a dilemma by denying injunctive relief, namely, the denial can, especially if permanent, act just like a compulsory license. Whether courts can effectively create compulsory licenses was the subject of much internal debate among the Supreme Court justices in the Sony case, and it will be interesting to see how that debate plays out 22 years later in the eBay case.

Monday, March 27, 2006

When a 1909 Act Author Dies in Year 28

What happened, from a copyright perspective, when an author whose work is governed by the 1909 Act dies in the 28th year of copyright, and he or she (alas, there are, statistically, far fewer widowers than widows; see this link which contains an unusual argument why this justifies polygamy in Islam), had previously assigned the right to the renewal term? There are a number of different scenarios. For example, the work was first published in 1950, and was not properly renewed. The assignment is worthless because the work is in the public domain. What if the work was properly renewed? In this case, the renewal assignment is invalid as a contingent interest that did not come to pass, the contingency being that the author would survive until the renewal time came. That is the teaching of Stewart v. Abend and its predecessors.

What if the same author lived to the 28th year, filed the renewal application and promptly died from such a momentous event? Neither the statute nor the legislative history of the 1976 Act provided guidance on when the renewal rights actually vested. The correct answer may determine whether assignments granted during the original term are valid and whether the correct renewal claimant has filed. There are three possibilities: (1) when the renewal term begins; (2) when a timely, proper renewal application is filed with the Copyright Office; or (3) when the renewal certificate is issued by the Copyright Office. The third possibility was undesirable because it depended on a mechanical and unpredictable government action.

The first period (when the renewal term begins) was adopted in Marascalco v. Fantasy, Inc., 17 USPQ2d 1409, 1411 (C.D. Cal. 1990), aff’d, 953 F.2d 469 (9th Cir. 1991), on the ground that it would best effectuate the congressional policy of protecting the rights of authors and their families. The second period (when a timely renewal application was filed) was adopted in Frederick Music Co. v. Sickler, 708 F. Supp. 587, 589 (S.D.N.Y. 1989), principally on the ground that the plain language of the statute did not mention survival until the renewal term began, instead stating that entitlement to the renewal term was available “when application for such renewal and extension shall have been made to the Copyright Office and duly registered therein.” Frederick Music Co. represented the better rule since the author (or other renewal claimant) had done all that he or she is required to do and the act of issuing a renewal application is ministerial, assuming the application is timely and properly filed.

The Copyright Renewal Act of 1992 clarified this question (and of course made renewal automatic). If a renewal registration is made in the 28th year of the original term, and the claimant dies following the renewal registration but before December 31 of that year, the renewal copyright is secured on behalf of the renewal claimant and the 67-year renewal term is conveyed as part of the claimant’s estate. However, if the renewal registration is not made in the 28th year of the original term, the renewal term will vest on January 1 of the 29th year from the commencement of federal protection in the party entitled to claim renewal as of December 31 of the 28th year (e.g., typically as assignee of the author).

The Copyright Office's Circular 15 states, in relevant part: "if a renewal registration is made in the 28th year and the renewal claimant dies following the renewal registration but before the end of the year, the renewal copyright is secured on behalf of that claimant."

The issue is currently on appeal to the Sixth Circuit in Roger Miller Music v. Sony/ATV Publishing, Nos. 05-6824, 05-6880, and will be bear watching. The Copyright Office sent a letter to counsel stating that this phrase in Circular 15, which used to follow that quoted above, no longer reflects the Office's views: "and the subject of the sixty-seven years of renewal copyright becomes a part of the individual's estate." The Office did not take a position of the merits of the case, but was concerned that the phrase was being used to state it did.

Thursday, March 23, 2006

Prince Charles and Fair Use

For those who take offense at the University of Chicago facebook project, there is always Prince Charles, who threw over Princess Diana for Camilla. Some would say it shows the power of true love over youth, but whatever the truth, the Prince was the plaintiff in a successful copyright - right of privacy suit brought over journals recounting his official trips. The decision, which was handed down on March 17th is by Justice Blackburne of the High Court of Justice, Chancery Division.Here is a link to it.

The defendant was the publisher of the newspaper The Mail on Sunday. Defendant published articles that contained excerpts of a journal Charles had written on his trip to Hong Kong from June 27 to July 3, 1997 on the occasion of the turnover of the territory. Charles claimed that his journals set out his private thoughts and impressions of the trip. He didn't keep them to himself, though. There is a dispute about the number of people he shared them with, the number ranging from 60 to 75, all in government positions (see paragraphs 22-26 of the opinion), and a dispute about their confidential nature. The journals themselves are a mix of the mundane: complaints about sitting in club class airplane seats rather than first class; to sage advice he felt compelled to give to Tony Blair; to the controversial, especially a remark about "the group of appalling old waxworks" among the Chinese delegation. This final remark served as the front page headline of the defendant's article, which trumpeted: "Scathingly candid remarks Prince Charles has made about the Beijing leadership can be revealed today."

There is no doubt the article dealt with questions of public interest, but in granting the equivalent of summary judgment to Charles on both the privacy and copyright claims, the court felt that irrelevant; to the court, it was Charles' personal impressions and "musings" that were significant. One wonders why those impressions and musings were not also a matter of public interest. Britain's fair dealing provision has a current news reporting provision and a criticism and review provision, but neither were held applicable, the former because the court read into it the violation of the breach of privacy, the latter because of the unpublished nature of the journals.

Judge Leval has written that in some circumstances, the unpublished nature of a work may be weighed in favor of fair use because unauthorized disclosure may be the only way the material will see the light of day. I doubt a U.S. court would come out differently, but I think the question would be closer.

Tuesday, March 21, 2006

In Praise of Obituaries

Shakespeare, in "Julius Caesar" Act 3, scene 2, had Marc Antony say: "I come to bury Caesar, not to praise him," but the praise given to those just buried in newspaper obituaries is an art form worthy of appreciation. The extent of copyright in news reports has been the subject of many cases, but the obituary page of flagship papers like the New York Times, is, to those who love writing, a world of its own, full of genius, humor, and an amazing ability to capture important characteristics of the deceased in a short space, a form of biographical haiku. The obituary page has finally received the critical attention it deserves in Marilyn Johnson's just published book, The Dead Beat: Lost Souls, and the Perverse Pleasures of Obituaries. Ms. Johnson's work is both loving and scholarly, exploring differences between British and U.S. styles, as well as regional differences within the U.S. There is an International Obituary Writers Association, which is having its 8th Annual Conference in June 2006 in New Mexico. Here is a link.

It is not in the celebrity obituaries that one finds the gems, but in the stories about far more ordinary lives. Here is one, familiar to New Yorkers: "Selma Koch, a Manhattan store owner who earned a national reputation by helping women find the right bra size, mostly through a discerning glance and never with a tape measure, died Thursday at Mount Sinai Medical Center. She was 95 and a 34B."

In today's New York Times, there is an obituary about Joseph Bova (along with a picture). Mr. Bova was described as an "Actor with a Flair for Comedy." His roles were said to range from "Prince Dauntless the Drab in the original production of 'Once Upon a Mattress' to Shakespeare's King Richard the III. He was said to "be known largely for his comedic abilities ... [and] although not a major star, had a steady career on and off Broadway, in movies and television." The obituary describes his having acted with Lynn Redgrave in a 1977 production of GB Shaw's "St. Joan," and as having played Bert Barry in "42d Street" for its entire 1980 to 1989 run. Then comes the highlight of the obit for me, the only quote, from his widow: "He played a purple turtle in a children's vitamin ad. Those ads were enough to buy a country house in Woodstock."

What a wry comment on an industry and a career. Obituary writers are among our greatest cultural commentators and like the best of memorialists, have the ability to affirm life in all its humor and pathos. In an era when the number of newspapers is shrinking and becoming more and more corporate, afraid to confront the critical issues of the day critically, it is reassuring that tucked away, there are those like Chuck Strum (NY Times obit editor) and his colleagues who devote their lives to making sure we appreciate the lives of others.

Wednesday, March 15, 2006

Adam Curry and Creative Commons License

Adam Curry is an American well known for his days at MTV, as a podcaster (the Daily Source Code), at OnRamp, Inc. and THINK New Ideas, Inc., and as a celebrity (an amorphous and sometimes annoying species of self-promoters). His Dutch wife Patricia is also a celebrity and he seems determined to make his 15 year old daughter Christina one too, while loudly complaining about invasion of her privacy. Here is a link to his blog. Here is a Wikipedia entry about him, which notes "Some controversy was caused by four edits .... Curry made to Wikipedia's article on podcasting by removing mention of early work done by others ... Curry later apologised, saying he had not understood how to use Wikipedia editing functions and had been unaware of some of the prior work done by Kevin Marks."

Recently, Curry has been in the news for a suit he brought, in Holland, against what he describes as a Dutch gossip rag, for among other things reproducing photographs in which he states he owns copyright and published on Flickr under the Creative Commons "attribution-non-commercial-share alike" license. Here is his Flickr page. The results of the court's judgment are the subject of intense disagreement. Here is a link with a very impressive number of comments, some quite personal and/or profane: .

There does appear to be agreement that the court found the Creative Commons license to be enforceable and violated, although the damages were very low. The violation found appears to have been copyright infringement, not breach of contract, leading one to wonder how the case might have been decided in the U.S. if a fair use criticism or comment defense was raised.

Is Copyright Funny?

Annual meetings of boring professional groups frequently try to spice things up by selling T-shirts containing double entendres, like "Chemists like to mix it up." Another might be "Copyright lawyers know how to reproduce" or maybe "perform." But are such things copyrightable? In Foxworthy v. Custom Tees, Inc., 879 F. Supp. 1200 (N.D. Ga. 1995), the court prootected what it called "redneck humor," at least Jeff Foxworthy's version of it: "You're a redneck if ... " followed by the punchline, something like "you ever cut your grass and found a car." As a staunch blue state person (I have a bumper sticker above my computer that says "U.S. Out of New England!"), I'll leave the humor quotient in these to others. Mr. Foxworthy has a big following, though, and perhaps we should leave it with Justice Holmes' comment in Bleistein that if his jokes "command the interest of any public, they have a commercial value -- it would be bold to say that they have not an aesthetic and educational value -- and the taste of any public is not to be treated with contempt. It is an ultimate fact for the moment, whatever may be our hopes for a change." 188 U.S. 189, 252 (1903).

The court found the jokes wildly funny, apparently, structuring its opinion around headings of a like theme (judicial trade mark fair use, I guess); it also found them protectible: "two entretainers can tell the same joke, but neither entertainer can use the other's combination of words." But they can if that combination is not protectible. While monologues (especially ones like Steven Wright's) certainly surpass the requisite level of originality, the same cannot be said for Mr. Foxworthy's little bon bons. The Copyright Office's Compendium II discussion (section 420.02) has it right:

"Jokes and other comedy routines may be registered if they contain at least a certain minimum of original expression in tangible form. Short quips and slang expressions consisting of more than short phrases are not registrable."

Tuesday, March 14, 2006

Joint Authorship Problems

There is agreement on many aspects of joint authorship, but not all. It is generally agreed that in the United States, joint authors are tenants in common, meaning all own an undivided proportional share in the entirety: 2 authors 50%, 3 authors 33 1/3% etc. Joint authors are not liable for infringement for using the work themselves, and are subject only to a (state law) duty to account for any profits earned. Joint authors can engage in non-exclusive licensing without the others' permission and the licensee is immune from suit by the other joint authors. A joint author may sell its proportional interest without the permission of the others, but cannot engage, solo, in exclusive licensing (which is the same thing as an assignment of the right licensed).

It is also settled, contrary to Nimmer, that to be a joint author one must contribute a modium of expression, and not just ideas, and that if one does so, the proportional share is calculated per capita and not on the extent of the contribution made, meaning that if there are two joint authors and one contributed 10% of the expression that joint author nevertheless owns a 50% interest. It is also agreed that joint authors can vary their proportional interest, but that such an agreement is a transfer of copyright, requiring compliance with Section 204.

One area of disagreement is Goldstein's view that to be a joint author one must contribute expression which can stand on its own as a copyrightable work. That view is based on a misreading of the Second Circuit's Childress v. Taylor opinion, and also reads out of the statute inseparable joint works, leaving only interdependent ones. One unsettled and probably insoluble problem is a joint work created by a private individual (or company) and an employee of the United States acting within the scope of his or her employment. Section 105 excludes from protection works of the United States government, but what happens when only one author is a government employee? This problem also arises with bootlegs, for example if Trent Lott were to sing in a barbershop quartet at the Capitol with private individuals.

Sunday, March 12, 2006

Brain Teaser

Here's a brain teaser involving notice under the 1909 Act and the 1994 Uruguay Round Agreements Act, amending Section 104A. The question is the impact, under Section 9 the 1909 Act, of a failure to affix a copyright notice to copies of works of foreign origin, distributed overseas. Did this result in loss of U.S. copyright?

In the original draft of Section 9 (codified in 1947 as Section 10), it was proposed that "any person entitled thereto by this Act may secure copyright for his work by publication thereof in the United States with the notice of copyright required by this Act." (Emphasis added.) In the final draft, however, the italicized words were transferred to the next clause: "and such notice shall be affixed to each copy thereof published or offered for sale in the United States by authority of the copyright proprietor." This change made it clear that a work duly copyrighted in the United States did not lose protection merely because there might be an edition subsequently published abroad without notice.

Not addressed, however, was whether a foreigner whose country had relations with the United States (but that did not have a notice requirement) could secure protection in the United States by publishing an edition in the United States with the prescribed notice after first publishing in the foreign country of origin without notice. After a number of lower court decisions, the Second Circuit, in Heim v. Universal Pictures Co., 154 F.2d 480 (2d Cir. 1946), expressed the view, in extended dicta, that American copyright could be secured by mere publication abroad even without the notice admittedly required for publication in the United States, so long as the work was not in the public domain in the foreign country. This view relied on the second clause of Section 10, quoted earlier. But, as pointed out by Judge Clark in his concurring opinion, that provision concerns only preserving copyright after it has been secured by original publication with the proper notice. For a number of years after Heim, the Copyright Office registered claims for works first published abroad without notice. However, following the United States' adherence to the Universal Copyright Convention, the Office issued regulations stating that Heim conflicted with the public policy reflected in the UCC implementing legislation that in order to enjoy full protection in the United States, foreign works first published abroad should bear the "UCC notice."

In 1996, the Ninth Circuit, relying on a general review of copyright as being nonextraterritorial, purporting to follow Heim, holding that publication overseas without notice does not inject the work into the public domain in the United States so long as such publication does not throw the work into the public domain in its foreign country of origin, Twin Books Corp. v. Walt Disney Co., 83 F.3d 1162, 1167 (9th Cir. 1996). According to the Ninth Circuit, when a work is published with proper notice overseas, U.S. protection begins, including subsequently the obligation to timely renew. This approach elides the real question: Did U.S. law in existence at the time, and therefore governing, require notice on copies first published overseas? If it did, chest thumping about the nonextraterritoriality of U.S. law is beside the point: by definition, if the statute is construed as requiring affixation of such a notice, Congress expressly made U.S. law extraterritorial, which it is entitled to do (and did in Section 401(a) of the 1976 Act as passed, which required notice to be affixed on authorized copies published "in the United States or elsewhere").

Very recently, on January 30, 2006 in Societe Civile Succession Richard Guino v. Beseder, Inc., a district judge in Arizona, in a very close reading of Heim and Twin Books criticized Twin Books for an "arguably incorrect" reading of Heim, for leading to an "unreasonable result," for ducking the issue in a summary fashion, and because it "unduly restricts the copyright restoration provisions of Section 104A." The Arizona court's concern was that under Twin Books, "the foreign publication without notice would neither place the work in the public domain in the United States, ... nor commence the term of copyright." Thus, the court concluded: "The Twin Books rule would prevent a foreign work published without notice from being eligible for copyright restoration under Section 104A."

In the Richard Guino case, sculptures (with authorship attributed solely to Renoir) were created in France in 1917. In an exhibition for sale held at the Bristol Hotel in Paris in 1974, the sculptures were listed for sale as works of Renoir-Guino. The plaintiff (a trust created by an agreement between the Renoir and Guino estates) registered the works with the U.S. Copyright Office on June 11, 1984. The court was of the belief that the earlier activity in France was a "publication", but found that 1983 was the date of a "new" "first" publication, and therefore measured the term under Section 302(b) of the 1976 Act; since Guino, a joint author, died in 1973, the term expires in 2043. Correct decision?

Thursday, March 09, 2006

The Times (Under 17 USC 507) They Are a Changin'

In two earlier postings (here and here), I reviewed statute of limitations issues, including Judge Lewis Kaplan's cutting edge opinion in Auscape In't'l v. National Geographic Soc'y, 2004 WL 1798130 (SDNY Aug. 12, 2004), which rejected the prevailing discovery approach to determining when the statute of limitations clock ordinarily begins to run. Judge Haight has now jumped on board in an opinion that may well be a harbinger of things to come. Because his analysis is likely to be repeated I reproduce it below. It should be borne in mind that his (and the Second Circuit's) description of Taylor v. Meirick is incorrect. There is also a good discussion of the standards for dismissal under FRCP 12(b)(6).

Slip Copy, 2006 WL 547252 (S.D.N.Y.)
United States District Court,
S.D. New York.
Mark ROBERTS, Plaintiff,
Nathaniel Thomas KEITH, Administrator of the Estate of Norman Thomas Keith,
a.k.a. Tommy Keith, Moe Moore, Sugarhill Records Ltd., Sugar Hill Music
Publishing, Ltd., Gambi Music, Inc., Twenty Nine Black Music, Sylvia Robinson,
Joseph Robinson, Jr., Rhino Records, Sanctuary Records Group, Ltd., Castle
Music UK, and Sequel Records, Defendants.
No. 04 Civ. 10079(CSH).
March 7, 2006.


HAIGHT, Senior J.*1 This is an action for copyright infringement under the Copyright Act, 17 U.S.C. §§ 101 et seq. Certain defendants move to dismiss the complaint pursuant to Rule 12(b)(6), Fed.R.Civ.P., on the grounds that the claims are barred by the statute of limitations and that defendants are licensees of a co-owner. The moving defendants also ask for attorneys' fees pursuant to 17 U.S.C. § 505.

Since this is a Rule 12(b)(6) motion to dismiss, the factual account that follows is based upon the allegations of the complaint.The case involves the recording and release of a musical composition, "Baby Let's Rap Now, Dance a Little Later," (the "Released Work"), as well as the rights to two other, unreleased compositions, "Love Trap," and "The Woman That Got Away," (the "Unreleased Works"). The Released Work was released in 1980, and re-released as part of various compilation works in 1997, 1999, 2000, and 2001.

Plaintiff Mark Roberts contends that the Released Work is a recording of his original composition, "Baby Let's Talk Now, Dance Later" (the "Roberts Work"), and that his copyright in the Unreleased Works has been infringed by the moving defendants' improper attribution of authorship of the works in question to a deceased individual named Norman Thomas Keith ("Keith"). Defendant Nathaniel Thomas Keith is sued as the administrator of Keith's estate. Roberts, one-time aspiring songwriter, contends that he wrote the lyrics to the Roberts Work and the Unreleased Works (collectively, the "Works") from 1976 to 1977. Complaint ¶ 1. According to the Complaint, Roberts mailed the lyrics to the Works to Keith, an R & B producer, in January 1978. Id. ¶ 2. The Complaint alleges that Keith engaged plaintiff in a series of telephone conversations regarding the Works over a period of from early 1978 to the summer of 1979. Id. ¶¶ 3-9. According to Roberts, Keith informed him in February 1978 that he wanted to record the Works. Id. ¶¶ 3-9. In March 1978, Roberts was telephoned by Keith regarding the Roberts Work and was asked whether he had any conception of the melody for the song. Plaintiff responded by singing the Roberts Work to Keith by telephone. In a subsequent phone call, Keith played the Works to Roberts by telephone. Id. ¶ 4. Keith indicated that he would like the Moments, an R & B group for which Keith was the producer, to record the Works. Id. ¶

3. Notwithstanding these earlier expressions of interest and encouragement, by the spring of 1978 the Moments had switched record labels, and Keith informed Roberts that he would use the Works with another musical group. Id. ¶ 6. Keith contacted Roberts again in the summer of 1978 to tell Roberts that he would use the Works on his solo album, to be released sometime in 1979. Id. ¶ 6. In early 1979 Keith informed Roberts that his record label had no interest in a Keith solo album. Id. ¶ 7. Later that year, Keith told Roberts that the record labels for which he worked, all owned by Defendants Sylvia and Joseph Robinson, were closing down. Keith stated that he would no longer have any need for the Works and that he would never publish the Works and that "Roberts could have his original lyrics back." Id. ¶ 8. Roberts did not hear from Keith again after 1979, and abandoned his musical pursuits in March 1983. Id. ¶ 13-14.*2 In the interim, according to the Complaint, Keith persuaded the musical group Ray Goodman and Brown to record and release the Roberts Work, as the Released Work, for Defendant Sugar Hill Records. Id. ¶ 11. The Released Work was subsequently compiled into a "box set" entitled "The Sugar Hill Records Story" and re-released in the United States by Defendant Rhino Records in February 1997 and July 1999. The Roberts Work was later released in the United Kingdom by Defendant Castle Music UK and Defendant Sequel Records in 2000, and by Defendant Sanctuary Music Group Ltd. in 2001. Id. ¶ 12.

Roberts had copyrighted his "original lyrics" to the Unreleased Works in 1987 and to the Roberts Work in 1998. Complaint ¶ 15. Roberts alleges he discovered on July 23, 2003 that the Roberts Work had been recorded and released. Roberts allegedly made the discovery by visiting the website, a site providing access to songwriters' catalogues. On the site, the Works are listed as original works of Keith. Id. ¶ 17.Defendant Robinson claims ownership of the publishing rights to the Released Work through Gambi Music, Sugar Hill Publishing Ltd.Defendants Sugar Hill Records, Ltd., Sugar Hill Music Publishing, Ltd., Gambi Music, Inc., Twenty Nine Black Music, Sylvia Robinson, and Joseph Robinson, Jr. now move to dismiss the complaint on the grounds that the claim is barred by the statute of limitations and that they, hereinafter "the moving defendants," [FN1] cannot be held liable for copyright infringement as licensees of Keith, a co-author of the Released Work. Cinque Decl., ¶¶ 3-4.
FN1. Defendant Nathaniel Thomas Keith, sued as administrator of the estate of the late Norman Thomas Keith, has not joined in the present motion to dismiss.

A. Standard of Review on a Motion to Dismiss Pursuant to Rule 12(b)(6). The district court should grant a Rule 12(b)(6) motion "only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." Hishon v. King & Spalding, 467 U.S. 69, 73 (1984)(citing Conley v. Gibson, 355 U.S. 41, 45-46 (1957)). On a motion to dismiss, a district court must accept a plaintiff's well-pleaded factual allegations as true, Papasan v. Allain, 478 U.S. 265, 283 (1986), and such factual allegations must be "construed favorably to the plaintiff," LaBounty v. Adler, 933 F.2d 121, 123 (2d Cir.1991) (citations omitted). "The review of such a motion is limited, and the issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims. Recovery may appear remote and unlikely on the face of the pleading, but that is not the test for dismissal." Bernheim v. Litt, 79 F.3d 318, 321 (2d Cir.1996) (internal citations and quotation marks omitted).

B. Statute of Limitations

1. Date of Accrual of Claim
The Copyright Act states with deceptive simplicity that a civil copyright infringement claim must be brought "within three years after the claim accrued," 17 U.S.C. § 507(b), without bothering to define when a claim accrues. Conceptually there are two alternatives. An infringement claim may "accrue" at the time of the infringement (the "injury rule") or when the plaintiff knows or has reason to know of the injury upon which the claim is based (the "discovery rule"). Whether a copyright infringement action accrues as of the date of injury or as of the date of discovery is far from a settled question in the case law. Neither the Supreme Court nor the Second Circuit has ruled on the issue, and district courts within this Circuit are divided, with a majority of the earlier decisions holding that a copyright claim accrues on the date of its discovery by the plaintiff. See Auscape Int'l v. Nat'l Geographic Soc'y, No. 02 Civ. 6441, 2004 WL 1798130, at *4 (S.D.N.Y. Aug. 12, 2004) (and cases collected at note 34).

Judge Kaplan's thorough and lucid opinion in Auscape forcefully challenges those decisions by other district courts in this Circuit holding that civil copyright infringement claims accrue as of the date of discovery. Ausscape correctly observes that those cases "rely almost exclusively upon Merchant v. Levy, 92 F.3d 51 (2d Cir.1996)," which in turn "followed Stone v. Williams, 970 F.2d 1043 (2d Cir.1992), in applying a discovery rule to hold that plaintiffs' claims for a declaration of copyright co-ownership were barred by the statute of limitations." 2004 WL 1798130, at *4. While it may be questioned whether the date of accrual of a claim for co-ownership of copyright should be the same as that for an infringement claim, a question Judge Kaplan raises in Auscape, he correctly stated that in any event the Second Circuit's decisions in Merchant and Stone derived from cases in areas other than copyright "the general rule that accrual of a federal claim is governed by a discovery rule unless the statute upon which it is founded explicitly provides otherwise." Id. In other words, "Merchant and Stone rest entirely on then prevalent views regarding the accrual of federal claims generally," id., and so do the district court decisions in this Circuit which, understandably enough, undertook to apply those Second Circuit cases in divining the date of accrual for a copyright infringement claim.

But Merchant and Stone can not be regarded as applicable to, let alone determinative of, the question of when a claim for copyright infringement accrues. That is because they antedate the Supreme Court's decision in TRW v. Andrews, 534 U.S. 19 (2001), which Judge Kaplan rightly said in Auscape "altered this landscape." 2004 WL 1798130, at *5. TRW shifted the tectonic plates because, in determining when a claim accrued under the Fair Credit Reporting Act, the Supreme Court "rejected the previously dominant view that federal courts should apply an injury rule only when Congress explicitly has adopted that rule, requiring instead that federal courts look beyond the specific language of a statute to its text and structure in determining what rule should apply when the statute is silent." Id.

In Auscape Judge Kaplan, correctly perceiving the generality of the rule the Supreme Court announced in TRW and that there was no principled difference in respect of the statute of limitations calculus between the Copyright Act and the federal statute involved in TRW, looked to the statutory structure and legislative history of the Copyright Act in determining whether a discovery or injury rule should apply in copyright infringement claims. His careful examination of the legislative history demonstrates in convincing fashion that "Congress intended to adopt a three-year limitations period running from the date of the infringement, as a discovery rule would have defeated its overriding goal of certainty." 2004 WL 1798130, at*7. After a similarly thorough review, Judge Kaplan concluded that "Supreme Court precedent concerning statutes of limitations in other contexts also supports the application of the injury rule here." Id., at *7. I find the analyses conducted and conclusions reached in Auscape to be entirely persuasive, adopt them as my own in the case at bar, and accordingly hold that the injury rule governs the application of the three-year statute of limitations in this copyright infringement case.

Plaintiff's complaint was filed on December 21, 2004. Thus claims arising out of infringement prior to December 21, 2001 are time barred, unless the operation of the statute of limitations is tolled by some recognized principle of law, a question I consider in Part II.B.2., infra. However, quite apart from any tolling effect, any claims arising out of infringements within the three-year period preceding the filing of suit are actionable. "If such infringement occurred within three years prior to the filing, the action will not be barred even if prior infringements by the same party as to the same work are barred because they occurred more than three years previously." Lennon v. Seaman, 63 F.Supp.2d 428, 443 (S.D.N.Y.1999) . "Each act of infringement is a distinct harm giving rise to an independent claim for relief." Stone v. Williams, 970 F.2d 1043, 1049 (2d Cir.1992). [FN2]
FN2. Plaintiff contends that his suit is timely if instituted within three years from the last act of infringement, quoting the Seventh Circuit's opinion in Taylor v. Meirick, 712 F.2d 1112, 1118 (7th Cir.1983) that the statute of limitations does not begin to run on a
continuing wrong until the wrong is over. This "continuous wrong" doctrine has been rejected by the Second Circuit, which explained in Stone v. Williams that, "This does not mean that when infringements occur during the limitations period recovery may be had for past infringements. Recovery is allowed only for those acts occurring within three years of suit and is disallowed for earlier infringing acts." Stone v. Williams, 970 F.2d at 1049-50 .

Plaintiff argues that even if the statute of limitations runs from the date of an infringement, the fraudulent concealment by Keith of his infringing conduct tolled the statue of limitations until at least March 8, 2003."[T]he law is clear that fraudulent concealment of the existence of a cause of action tolls the running of the statute of limitations ." Stone v. Williams, 970 F.2d 1043, 1048-49 (2d Cir.1992). Tolling lasts for as long as the fraud is effective. Id. In order to rely upon the doctrine of fraudulent concealment, the plaintiff must plead three elements: (1) wrongful concealment by defendants, (2) which prevented plaintiff's discovery of the nature of the claim within the limitations period, and (3) due diligence in pursuing discovery of the claim. In re Merrill Lynch Ltd. Partnerships Litig., 154 F.3d 56, 60 (2d Cir.1998); Antonios A. Alevizopoulos & Assocs. v. Comcast Int'l Holdings, Inc., 100 F.Supp.2d 178, 184 (S.D.N.Y.2000). A complaint must satisfy the particularity requirement of Fed.R.Civ.P. 9(b) with respect to these elements. Id. To do so, the complaint must adequately specify the statements it claims were false or misleading, give particulars as to the respect in which plaintiff contends the statements were fraudulent, state when and where the statements were made, and identify those responsible for the statements. Cosmas v. Hassett, 886 F.2d 8, 11 (2d Cir.1989). Furthermore, the complaint must "allege facts which give rise to a strong inference that the defendants possessed the requisite fraudulent intent." Alevizopoulos, 100 F.Supp.2d at 184 (quoting Cosmas, 886 F.2d at 11.The Court's Rule 12(b)(6) analysis is confined to the legal sufficiency of the factual allegations of Roberts' complaint. Those allegations satisfy the elements of pleading fraud as far as the conduct of the late Norman Thomas Keith is concerned. The complaint alleges particularized facts which specify that Keith contacted Roberts in early 1979 for the purpose of informing Roberts that defendants would have no need for his lyrics, that Keith would not publish or use the Works, and that Roberts could have the Works back. Compl. ¶ 8. On these facts, Keith's production of the Released Work a mere one year later gives rise to a strong inference that Keith possessed fraudulent intent. Keith allegedly produced the Roberts Work with minor alterations one year after informing Roberts that he would not publish any of the Works, and never contacted Roberts again. Compl. ¶¶ 11, 13. Upon discovering the fraud on March 8, 2003, plaintiff proceeded to pursue his claim in earnest, contacting defendants within two months of discovery and filing the complaint within twenty-two months of the date of discovery. There are no facts presented at this stage to indicate that plaintiff should have uncovered Keith's alleged fraud earlier.

On the present record, therefore, I deny the moving defendants' motion to dismiss any of plaintiff's copyright infringement claims on the ground that they are barred by the statute of limitations. [FN3]
FN3. That denial is without prejudice to defendants' revisiting the question of the statute of limitations after discovery has been completed.

Defendants' second ground for dismissal has no merit. Defendants claim that they are undisputed licensees of a co-author, namely Keith. But they fail to cite to any paragraph in the complaint that would support this contention. Construed in the light most favorable to the plaintiff, the complaint asserts sole authorship. The complaint pleads facts giving rise to an inference that plaintiff is the author of both the lyrics and melody of the Released Work. Compl. ¶ 4. Thus there exists an issue of fact as to whether or not the moving defendants hold a valid license to publish from a co-author.

For the foregoing reasons, the moving defendants' motion to dismiss the complaint pursuant to Rule 12(b)(6) is denied. Accordingly, their related request for attorneys' fees pursuant to 17 U.S.C.A. § 505 is also denied.Counsel for the parties are directed to conduct the conference mandated by Fed.R.Civ.P. 26(f) and to submit to the Court the proposed discovery plan. The plan must be submitted to the Court not later than April 3, 2006. The Court will then consider the entry of a scheduling order pursuant to Rule 16(b).

Wednesday, March 08, 2006

La la and Section 109

The San Francisco Chronicle had this story yesterday about a new service for CD swapping. Although it doesn't refer to Section 109 of the Copyright Act directly, that is obviously the relevant section:

"Former Yahoo chief product officer Geoff Ralston's record collection ranges from Joni Mitchell to Jimmy Buffett, the Beach Boys to the B-52s. In the past few months, it's also expanded to popular but lesser-known groups such as Death Cab for Cutie, Fountains of Wayne and the New Pornographers."I've experienced more new music in the last six months than in the last 15 years," Ralston said. That's because Ralston is on the board of La la, a Palo Alto startup that is introducing a site it believes offers a legal alternative to sharing music online. It's a virtual place where consumers can come together and trade their used CDs, much like going to a used-record store.Part MySpace, Netflix, eBay and iTunes, La la incorporates pieces of each: Users list online the CDs they both want and have. In the process, they find others who share the same taste in music. Then, when one user requests a CD that another person owns, the owner drops it in the mail in a pre-paid envelope. The receiver is billed $1, plus 49 cents for shipping; the shipper pays nothing.The service, which is still being tested, comes as the music industry continues to wrestle with declining CD sales and illegal file sharing on the Internet. Just last week, the Recording Industry Association of America filed another round of lawsuits, going after 750 people who it says stole music online.In autumn, Sony created an uproar after customers found its CDs incorporated software meant to curtail excessive copying, but which opened their computers to spyware and viruses. Meanwhile, getting music online continues to grow, with the iTunes music store hitting its 1 billionth song download last month."There is a transition going on, from media that is hard plastic, that has weight to it, to all-digital media, where increasingly people are acquiring and listening to music without it being on a disc," said Ralston. "La la is taking advantage of both sides."La la offers customers access to about 1.8 million albums, more than what's available on iTunes and at local retailers. It also seeks to create online communities of users who enjoy the same music, providing connections to people who have similar record collections."This is meant to be better than iTunes," co-founder Bill Nguyen said. "If Apple had done it better, then we wouldn't have built this."La la avoids copyright issues because swapping used CDs is legal, while sharing copyrighted music online is not. For the $1 it charges a user to receive a CD, La la gives 20 cents to the artist.For every CD a user ships, the user receives one in return. An internal algorithmic system -- that the founders liken to karma -- tracks how often a person sends a CD, if it's sent on time and if the CD is in good shape. Someone with "bad" karma will probably not receive a CD as quickly as someone with "good" karma. Sending burned CDs, a big no-no, could lead to getting kicked off the site.La la can't, however, stop folks from receiving a CD, making a copy of it and then trading it again. That, in fact, is how about 30 percent of consumers get their music these days, according to the NPD Group, a market research firm in Port Washington, N.Y. A little more than 50 percent of consumers buy CDs, about 16 percent use illegal file-sharing networks and about 4 percent download music legally on services like iTunes."What's been a challenge for the industry is people swapping CDs and ripping and burning copies of them," said Russ Crupnick, an analyst with NPD Group. "It's a big piece of how people are acquiring music."La la said it doesn't condone users doing this, but it could prove to be one of the company's challenges. "I don't see how the RIAA is going to like it, but they don't have a choice because it doesn't infringe on copyright," Ben Bajarin, an analyst with Creative Strategies. Nguyen said the company has no plans to expand beyond music. Incidentally, another Silicon Valley startup, Menlo Park's Peerflix, uses a similar model to trade DVDs.La la is backed by Bain Capital and Ignition Partners, which pumped $9 million into the company. It also landed Anselm Baird-Smith, a former eBay architect, as one of its co-founders. Mr. Baird-Smith, who has two sisters and a brother who are professional musicians, opted to take a chance on La la."I didn't realize so many people loved me," he said. But "it's about music and about being good to the artist and me personally being able to bring something to La la."

The only possible hitch is the horribly mucked-up language of Section 109(b)(1)(a):

"Notwithstanding the provisions of subsection (a), unless authorized by the owners of copyright in the sound recording or the owner of copyright in a computer program (including any tape, disk, or other medium embodying such program), and in the case of a sound recording in the musical works embodied therein, neither the owner of a particular phonorecord nor any person in possession of a particular copy of a computer program (including any tape, disk, or other medium embodying such program), may, for the purposes of direct or indirect commercial advantage, dispose of, or authorize the disposal of, the possession of that phonorecord or computer program (including any tape, disk, or other medium embodying such program) by rental, lease, or lending, or by any other act or practice in the nature of rental, lease, or lending. Nothing in the preceding sentence shall apply to the rental, lease, or lending of a phonorecord for nonprofit purposes by a nonprofit library or nonprofit educational institution. The transfer of possession of a lawfully made copy of a computer program by a nonprofit educational institution to another nonprofit educational institution or to faculty, staff, and students does not constitute rental, lease, or lending for direct or indirect commercial purposes under this subsection."

This language was much clearer before software was added to it: in its original incarnation, dealing with record rental, it was much simpler to parse. Bottom line, from the description above of La la, it doesn't appear to run afoul of the section since there title to the copy is parted with and there is nothing like the wink-wink-nudge-nudge that led to the original record rental ban.

Tuesday, March 07, 2006

Oscars and Copyright

By now all the expensive dresses have been returned (or not), along with the bling bling. Ang Lee may (or not) be playing the Crying Game over the Best Picture award. We have all seen pictures of the Chosen few with their statuettes. The origin of the statue is described here:

"Hollywood's most-coveted leading man was designed by MGM's chief art director, Cedric Gibbons in 1928. It depicts a knight holding a crusader's sword, standing on a reel of film. The reel's five spokes symbolize the Academy's original branches: actors, writers, directors, producers, and technicians. Each Oscar checks in at a statuesque 13 1/2 inches, weighs 8 1/2 pounds, and is made of bronze that has been plated with 24-karat gold.

Over the years, Oscar has received several "facelifts." Juvenile actors like Shirley Temple and Hayley Mills received mini replicas, and Walt Disney was honored with a full-sized statue and seven dwarf-sized ones. During WWII, the award was made of plaster. The Oscar we know and love today hasn't changed since the 1940s, when the base was enlarged and changed to metal (it was originally marble) and the Academy started numbering each golden boy. "

From 1929 to 1941, the Academy claimed common law copyright in the Oscar; in that final year, it registered the work with the Copyright Office as an unpublished work and began placing restrictions on the manner in which winners could advertise their Oscar, and also required that Oscar winners give the Academy a right of first refusal on any intended sale of the statue. In 1950, the estate of post-mortem recipient Sid Grauman offered the statue for sale at a public auction, the first time a statue had been offered up.

In a later case involving a knock-off, the claim was made that the Oscar was in the public domain for failure to place a notice on copies. That was a requirement only if the work was published. The select nature of the recipients with the limited purpose of advancing the motion picture arts and sciences, and implied restrictions on further distribution was held to result in a limited publication, that is, no publication. Academy of Motion Picture Arts and Sciences v. Creative House Promotions, Inc., 944 F.2d 1446 (9th Cir. 1991), amended, 91 D.A.R. 12181 (9th Cir. Oct. 2, 1991), rev'g 728 F. 1442 (C.D. Cal. 1989).

Monday, March 06, 2006

eBay and First Sale of Educational Books

Law students are aware that some of the casebooks they so carefully study come in a "Teacher's Edition." That edition is not for sale to students. The teacher's editions of casebooks run the gamut from perfunctory to works of art. The Holy Grail of Teacher's editions is the one for the Dukeminier & Krier property casebook; it is a book of its own: not only does it have the answers to all of the questions posed, it has explanations of them, as well as historical material, everything a neophyte professor needs to come across as an expert, and everything a student would need to ace the course.

Many other fields of education have teacher's editions too, and the same inhibitions on them falling into students' hands apply. That's where eBay comes into play. Just as book reviewers have historically sold to second hand bookstores copies sent by publishers, and disk jockeys the albums they are given, some professors have taken to selling the teacher's editions they receive. eBay now provides a vast market of eager students and perhaps others. Educational publishers don't like such sales, and are reported to be trying to prevent sales on eBay of them.

There are no special rules for the sale of teacher's editions. To begin with, the first sale doctrine doesn't require a sale; other countries more accurately describe it as the "exhaustion" doctrine: once the copyright owner has parted with title to the physical object, the copyright owner's rights over that copy are "exhausted" and anyone who lawfully possesses that object can do what they want with it in terms of distribution and display. So, if an educational publisher gives a teacher a teacher's edition rather than selling it, that fact doesn't matter. The teacher can sell it on eBay or wherever.

But what if the copy says, "Not for sale"? Many copies sent to book reviewers and to disk jockeys contain similar legends and can be found in second hand stores; I own a few myself that I have purchased. One would have to ask whether there is a contract under such circumstances to determine whether there is a breach of it, since the first sale doctrine does not apply to licensed only uses. There are reasons to be skeptical there is a license only in such a situation (it is, for example, highly unlikely the publisher has an expectation of getting the copy back in the event of a breach), but if there is a contract, it is only between the book publisher and the original teacher, not a reseller.

Thursday, March 02, 2006

Patents, Misuse, and Market Presumption

In a unanimous opinion yesterday, delivered by Justice Stevens, the Supreme Court held that amendments made to the Patent Act in 1988 led to the conclusion that the mere fact that a product subject to a tying arrangement is patented does not support a presumption of market power for antitrust purposes, Illinois Tool Works Inc. v. Independent Ink, Inc. The Court did observe, however, that its previous strong disapproval of tying arrangements "has substantially diminished." Indeed, it noted that some tying arrangements have been held to be procompetitive.

The origin of the presumption that a patent (and perhaps copyright) confers market power arose outside of antitrust law, in the patent misuse area, specifically in Motion Picture Patents Co. v. Universal Film Mfg. Co., 243 U.S. 502 (1917), and later Morton Salt Co. v. G.S. Suppinger Co., 314 U.S. 488 (1942). Two years later, the Court decided Mercoid Corp. v. Mid-Continental Investment Co., 320 U.S. 661 (1944). Mercoid, by the way, led to the statutory patent provision on staple article of commerce that has dogged copyright since its questionable adoption by the Court in the 1984 Sony decision. Those who wonder about the appropriateness of that adoption might fruitfully retrace those earlier steps.

In 1988, Congress amended 35 USC 271(d)(5) , by stating, in relevant part, that injunctive relief should not be denied or misuse found "unless, in view of the circumstances, the patent owner has market power in the relevant market for the patent or patented product in which the license of sale is conditioned." The Supreme Court yesterday held that this passage indicated "Congress did not intend the mere existence of a patent to constitute the requisite 'market' power,'" even though the amendment did not expressly refer to antitrust law.

The only reference in the opinion to copyright is to the 1995 guidelines issued jointly by the DOJ and FTC, which state that for prosecution purposes, they "will not presume that a patent, copyright, or trade secret necessarily confers market power upon its owner." While there is no corresponding statutory provision in the Copyright Act to the patent misuse defense, the defense has been raised in a number of cases. The merits of such a defense were not reached in yesterday's decision, but the circumstances in which it will be raised may have shrunk. The MPAA, RIAA, NFL and other copyright owners had submitted amicus briefs favoring the ultimate result. MPAA's Dan Glickman is quoted in today's Hollywood Reporter as saying that "This is good news for all creators and innovators." Theatre and video distribution owners, concerned (rightly or not) about block booking and tie-ins, were less thrilled.