Monday, October 30, 2006

Playstation and HD Loader

In a opinion handed down September 11th, but reported in this week's BNA PTCJ, Sony Computer Entertainment America Inc. v. Devino Inc., Judge Claudia Wilken (N.D. Calif.) granted summary judgment and a default judgment to Sony in a DMCA case involving its Playstation 2, HD Loader (here is a link to wikipedia on the product), mod chips, and whether valid downstream defenses get one off the hook for a Section 1201 violation. The answer to that last question is no. One defendant proceeded pro s (the summary judgment), while the corporate defendants had default entered for lack of counsel (among other reasons).

HD Loader is software that allows consumers to play games on the PS2 on an optional hard drive peripheral. Games are stored on the hard drive, from which they are more quickly accessible than waiting around for the PS2 console to read data off the disc. Sony had a different view of their utility. Defendant also sold mod chips that could alter the play of the games.

The DMCA claim was over the PS2 authentication process, which was held to be a "technological measure" within the meaning of the DMCA. The primary purpose of defendant's products was held to be to circumvent the authentication process. The interesting part of the opinion is the court's finding that defendant's products may be used in a manner that constitutes fair use by consumers and which would constitute reverse engineering under Section 1201(f). Nevertheless, the court held that "downstream consumers' lawful or fair use of circumvention devices does not relieve [defendant] from liability for trafficking in such devices under the DMCA," citing 321 Studios v. MGM Studios, Inc., 307 F. Supp.2d 1085, 1097 (N.D. Cal. 2004); United States v. Elcom, Ltd., 203 F. Supp.2d 1111, 1120 (N.D. Cal. 2002).

321 Studios itself cited the Second Circuit's Corley opinion, which construed Section 1201(c)(1)'s language "nothing in this section shall affect ... defenses ... including fair use" as relevant only to post-circumvention activity. In straight copyright infringement actions involving secondary liability, downstream use has been relevant on occasion. For example, in the Betamax case (where Sony was a defendant), Sony got off the hook because of what the downstream consumers did. By excluding such possibilities under the DMCA, the DMCA has indeed become an uber-protectionist piece of legislation.

Sunday, October 29, 2006

Surf Music, Hip-Hop, Race and Copyright

In Jimi Hendrix's song "Third Stone from the Sun," he ad-libs "You'll never hear surf music again." He later explained he wasn't dissing the genre, but had mistakenly heard Dick Dale had died. Dale is still alive (here's a link to his website), although of course Hendrix isn't. Michael Viner is also alive. Michael who? A fantastic article in the Sunday New York Times by Will Hermes explains who Michael Viner is and how a derivative of surf music became first a funk hit and then the national anthem of hip-hop.

Viner, 62, is white and worked on Robert Kennedy's campaign for President until 1968 when Kennedy was assassinated in Los Angeles by a Palestinian. Viner then roomed with Rosie Grier, an African American who had also worked for Kennedy as a bodyguard and who was standing next to Kennedy when he was murdered. (It was Grier who captured Kennedy's killer Sirhan Sirhan). Grier had been a football player and also did needlepoint. Grier became an actor and Viner took over music at MGM, where he worked on soundtracks. That experience came in handy when he produced a chase scene in a 1972 movie called "The Thing With Two Heads," a "ludicrous but racially provocative horror film" starring Grier and the great Welsh actor Ray Milland as two heads attached to the same body. (The tag line was: "They transplanted a white bigot's head on a soul brother's body!").

One track in the movie was called "Bongo Rock." When it became popular as a 7" single, the record label put out a fancy version, but as Mr. Viner explained, "as soon as people saw all the white guys in the band, it stopped selling," so the record company put out a version with two black hands over a pair of bongos. In 1972 Mr. Viner also put together a group, The Incredible Bongo Band, for a full-length LP which bombed. A follow-up album called "The Return of the Incredible Bongo Band," is said to have "fared even worse." Although the albums are reported to be scheduled for release in the U.S. tomorrow (here is a link to, they appear to have been released previously in the U.K.; here is a Juno Records site that lists them and which has sample Mp3 files. Viner sold his rights to MGM, but got them back in 1990.

"Apache," the Incredible Bongo Band's 's most famous performance, sounds to me like really bad surf music that collided with really bad proto-funk. The underlying musical composition was written by Jerry Lordan, a Londoner, who was inspired by a 1954 Burt Lancaster-Charles Bronson movie of the same title, about a warrior called Massai, the last Apache left after Geronimo's surrender to the U.S. Cavalry in New Mexico. Imdb notes: "There really was a renegade Apache warrior called Massai, who was a bloodthirsty killer renowned for stealing, raping and murdering. And he did indeed escape from a prison train bound for Florida and make his way back to his homeland. It is however doubtful whether he was 6 foot and had blue eyes like Burt Lancaster."

Michaelangelo Matos has an article entitled "All Roads Lead to 'Apache,'" discussing the song's history here. He neatly sums its history up this way: "[A composition] written by a white Englishman imitating Native Americans as portrayed by white Americans and made famous by a Dane with a vaguely Hawaiian sound, was arranged by a Canadian, [only] to become the biggest record in black New York." Oliver Wang has an index of mp3 files of various performances of the song here. (The URL given in the Times article to Wang's website is incorrect). Wang includes the initial performance by English guitar instrumentalist Bert Weedon in 1960, followed by performances by Cliff Richard and the Shadows (also in 1960), a snippet by the Ventures (1963), the Sugarhill Gang (the first hip hop sample, from a 1981 12"), Goldie (1995), Moby (1999), and The Roots ("Thought @ Work" 2002). L.L. Cool J sampled it in 1985 ("You Can't Dance"). Missy Elliot's August 2006 MTV clip "We Run This" is said by the Times article to "owe a lot" to Apache. Other hip-hop artists like Nas ("Made Ya Look" and "Thieves Theme") have frequently used samples from other songs off of The Incredible Bongo Band album.

The song's appeal in the hip-hop world was not intially attibutable to recording artists, but instead to a Jamaican immigrant to the Bronx, Clive Campbell, known as DJ Kool Herc. Mr. Herc in an interview on NPR's Fresh Air stated: "I'm not a DJ, I'm a disc jockey. I play the discs that make you jockey." Here are two radio interviews with him on Fresh Air: August 29, 2005; March 30, 2005. Kool Herc is quoted in the Matos article as calling Apache the "national anthem of hip-hop." Grandmaster Flash and Afrika Bambaataa have also warmly embaraced the song. Their own unique performances of it, like Kool Herc's involve use of simultaneous multiple versions of the recording melded into a derivative performance. A July 8, 2002 Fresh Air interview with Grandmaster Flash is here. The derivative attributions go back of course to the movie, which inspired the song, which in turn inspired countless different performances across many different genres as well as national and racial lines.

While Viner is reported to have hired someone help him stamp out bootleggers and illegal samples, he has no had problems with the hip-hop community. As Mr. Hermes reports: "Current rap artists are happy to pay for the imprimatur of using the original Incredible Bongo Band recordings, which are not just laden with history but remarkably funky."

Thursday, October 26, 2006

Koons Affirmed (Don't Blanch)

On November 7, 2005, I did a post on an SDNY decision by Judge Stanton finding fair use for alleged artist Jeff Koons' use of a photograph in a painting, Blanch v. Koons. Yesterday, the Second Circuit affirmed in a comprehensive opinion by Judge Sack and a concurring opinion by Judge Katzmann. (The link to the opinion includes pictures of the works).The case can be reduced to two fundamentals: Koons' use was highly transformative and the copyright owner suffered no harm to her market; the rest is window dressing. But window dressing -- stated rationales -- are picked up in later opinions and in briefs, so they are worth noting.

To recapitulate the facts briefly: plaintiff, for $750 dollars, did an advertisement for Gucci silk sandals. The photo depicted a woman's lower legs and feet (wearing the silk sandals) resting on a man's lap in an airplane cabin. The photo appeared in a six-page feature in Allure magazine. Koons was commissioned by Deutsche Bank and the Guggenheim Museum to create a series of seven paintings, which he later called "Easyfun-Ethereal." One work, "Niagara," was at issue. In Niagara, Koons (or more accurately, perhaps, his "assistants") depicted several sets of women's lower legs juxtaposed against food and landscapes. He intended to "comment on the ways in which some of our most basic appetites -- for food, play, and sex -- are mediated by popular images. ... By reconceptualizing these fragments as I do, I try to compel the viewer to break out of the conventional way of experiencing a particular appetite as mediated by mass media." And Fox News is fair and balanced. Koons made good money on the project, but Blanch admitted Koons' use didn't harm her career, upset any plans she had for her work, or decrease its value.

In the traditional march through the four factors, the majority began with the transformative nature of the use. Koons' purpose and use were unquestionably transformative: Koons used a piece of plaintiff's work as part of an overall collage (the majority at one point turned collage from a noun into a verb, "collaged," a grammatical use I doubt is yet accceptable and hope won't become acceptable). On the commercial aspect of the first factor, we get to a point of dispute between the majority and the concurring opinion. Where a use is transformative, the majority, quoting an earlier panel opinion, stated that the secondary commercial nature of the use is "discounted." The concurring opinion thought that too broad a remark, but in so doing, made remarks I find odd. The concurring opinion felt that the context of the earlier panel's discounting remark occurred with a use that was within the preamble uses. Koons' use, Judge Katzmann felt, was not for a preamble use and therefore the discounting (which he then called a presumption) "does not apply." Indeed, he doubted the courts had "license" to engage in such discounting.

I don't follow either opinion's logic on this point. As I understand Campbell, one of the considerations in determining how to weigh the fact that the defendant made money off the use is to ask how that money was made: was it made by a superseding use or a transformative use.? If transformative, we don't pay a lot of attention to defendant having made money because the purpose of the use is not to usurp a legitimate market, and because most uses involve profit-making entities. We look therefore at the purpose of the use itself and not the status of the user. This has nothing to do with whether a particular use is listed in the (illustrative) preamble and certainly does not rise to a presumption; in fact, it has nothing to do with presumptions, but rather with a purely factual determination of why defendant did what he did. (Moreover, Koons' use was for criticism or comment, a use enumerated in the preamble).

The majority has a very helpful discussion on the parody versus satire dichotomy, which it effectively eliminates. The question, as the majority aptly states, is simply whether "Koons had a genuine creative rationale for borrowing Blanch's image, rather than merely using it merely 'to get attention or to avoid the drudgery in working something fresh up.'" He clearly did have such a rationale.

While there are other things of note in the opinion, I want to focus on only one more because it too was a point of difference between the majority and the concurring opinion; that is the question of bad faith. The relevancy of bad faith in fair use determinations is the subject of a lot of disagreement within the judges of the Second Circuit, seen again here. I agree with the majority that there is no authority for the argument that failing to seek permission by itself can constitute bad faith. If that were true virtually all cases involving fair use would contain an element of bad faith. The concurring opinion didn't necessarily disagree, but would have instead concluded that "whatever bad faith Koons may have exhibited in this case, as well as the limited commercial nature of his use, would not outweigh the much stronger considerations pointing toward a finding of fair use." True enough, but I don't understand the concurring opinion's reluctance to endorse the majority's sensible approach.

There's Something about Kids in Uniforms

Awhile back, ASCAP was embarrassed by efforts to require Girl Scouts singing songs around the campfire to pay up. This led to many stories and even videos of young girls doing the Maracrena in silence. Here is an excerpt from a Wall Street Journal article from those days:

By Lisa Bannon, The Wall Street Journal
Something is missing at Diablo Day Camp in Lafayette, Calif., this year.
At the 3 p.m. sing-along in a wooded canyon near Oakland, 214 Girl Scouts are learning the summer dance craze, the Macarena. Keeping time by slapping their hands across their arms and hips, they jiggle, hop and stomp. They spin, wiggle and shake. They bounce for two minutes.
In silence.
"Yesterday, I told them we could be sued if we played the music," explains Teesie King, camp co-director and a volunteer mom. "So they decided they'd learn it without the music."

Watching the campers' mute contortions, Mrs. King shakes her head. "It seems so different," she allows, "when you do the Macarena in silence."
Starting this summer, the American Society of Composers, Authors & Publishers has informed camps nationwide that they must pay license fees to use any of the four million copyrighted songs written or published by Ascap's 68,000 members. Those who sing or play but don't pay, Ascap warns, may be violating the law.
Like restaurants, hotels, bars, stores and clubs, which already pay fees to use copyrighted music, camps -- including non-profit ones such as those run by the Girl Scouts -- are being told to ante up. The demand covers not only recorded music but also songs around the campfire.
"They buy paper, twine and glue for their crafts -- they can pay for the music, too," says John Lo Frumento, Ascap's chief operating officer. If offenders keep singing without paying, he says, "we will sue them if necessary."
No more "Edelweiss" free of charge. No more "This Land Is Your Land." An Ascap spokesman says "Kumbaya" isn't on its list, but "God Bless America" is.
Diablo, an all-volunteer day camp that charges girls $44 a week to cover expenses, would owe Ascap $591 this year, based on the camp's size and how long it runs. Another composer group, Sesac Inc., which owns copyrights to such popular tunes as Bob Dylan's "Blowin' in the Wind," says it plans to ask camps for another set of royalties this fall.

The MPAA, much more media savvy, has figured out a way to deal with the problem. Teaming up with the Boy Scouts in Los Angeles, the MPAA has designed a merit badge for respecting copyrights (see picture of the badge here).

Scouts lusting after the badge participate in curriculum the MPAA has produced, which includes creating a video public service announcement, and visiting a video-sharing website to identify copyrighted material.

Wednesday, October 25, 2006

Privileges in Copyright Law

The Copyright Act contains a mesh of rights and exceptions to those rights. Some of the exceptions are exemptions, like Section 108; some are compulsory licenses, like Sections 111 and 119 and parts of Sections 114 and 115. Some are privileges like Section 107, fair use. Exclusive rights are things copyright owners in the particular work own. Exclusive rights arise either through creation, or by transfer. If by transfer, the assignment of exclusive rights must be in writing, signed by the freelance author, and, as with all exclusive rights in property, will endow the owner thereof with the exclusive ability to exclude all others from using the property. Privileges are not rights and are not licenses either. They must be proved by the party asserting entitlement thereto and may not be transferred to third parties.

There is one provision which states on its face that it is a privilege, but has not been treated as such by the courts. This is Section 201(c):

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

The first sentence of Section 201(c) states unequivocally that all rights vest initially in freelancers and remain there unless transferred, while the structure of the second sentence limits availability of the privileges that follow “in the absence of an express transfer of the copyright or any of the rights under it. . . .” Congress thus clearly contrasted transfer of exclusive rights with privileges: if you get a transfer of exclusive rights, your transfer governs and you get no privileges under this section. If you have no such transfer of rights, you get (presumptively) the privileges set forth therein. Non-exclusive licenses are transferable without permission.

All this was clear enough until the district court decision in Tasini v. New York Times, 972 F. Supp. 804 (S.D.N.Y. 1997), which held:

In plaintiffs' view, the fact that Section 201(d)(2) provides for the transfer of “rights” can only be taken to mean that the “privileges” identified in the preceding section of the Act are nontransferable. This approach distorts the relationship between Section 201(c) and Section 201(d).
Section 201(d)(2) does not speak only of “rights,” but also of any “subdivision” of rights. The potential for such a subdivision of rights is created in the preceding section, 201(d)(1), which permits the transfer of copyright, “in whole or in part,” either by conveyance or by “operation of law.” This recognition of the potential for a partial transfer of copyright “by operation of law” follows from the fact that exactly such a transfer is effected in the preceding Section of the Act, Section 201(c), which extends certain enumerated “privileges” to publishers. In other words, the three provisions operate in tandem: Section 201(c) transfers plaintiffs' copyrights, “in part,” to defendants-a permissible exercise under Section 201(d)(1)-and therefore, under Section 201(d)(2), defendants are left with full authority over the “subdivision” of rights they acquire.
When Sections 201(c) and 201(d) are placed into historical context, the weakness in plaintiffs' position is all the more apparent. The 1976 Act, in significant part, amounts to a repudiation of the concept of copyright indivisibility, a principle pursuant to which the assorted rights comprising a copyright could not be assigned in parts, i.e. subdivided. See Nimmer, § 10.01 [A], at 10-5. Under this former regime, individual authors were at risk of inadvertently surrendering all rights in a contribution to a collective work either to the publisher of that work, or to the public. Id. Under Sections 201(c) and (d) of the 1976 Act, that threat is gone. Authors are no longer at risk of losing all rights in their articles merely because they surrender a small “subdivision” of those rights-either by operation of Section 201(c) or by express transfer-to the publishers of collective works.
The aim of Section 201(c)-to avoid the “unfair[ness]” of indivisibility-would not be further served by equating “privileges” with nonexclusive licenses.
The term “privilege” is used in Section 201(c) to underscore that the creators of collective works have only limited rights in the individual contributions making up their collective works; the term does not indicate that the creators of collective works are limited in exercising those few rights, or “privileges,” that they possess. Thus, to the extent that the electronic reproductions qualify as revisions under Section 201(c) the defendant publishers were entitled to authorize the electronic defendants to create those revisions.

The court however confused rights in the collective work with privileges in the individual contributions thereto. Unfortunately, the issue wasn't reached on appeal and remains.

Sunday, October 22, 2006

New Section 411(a) case

In my continuing effort to have courts apply the Section 411(a) requirement that one must have actually received a certificate of registration (or received a rejection) before instituting an infringement suit, here is an opinion from the 7th Circuit from October 17th, Brooks-Ngwenya v. Thompson, 2006 WL 2972691. True enough it concerns a case where the plaintiff received the certificate after the appeal was filed, but the appeal refreshingly reads the statute as written. The case also points out an increasing phenomenon: plaintiff misfiles in state court; defendant removes to federal court. Once in federal court, defendant then moves to dismiss for lack of subject matter jurisdiction due to a failure to comply with Section 411(a). Here's the opinion.

*1 Angela Brooks-Ngwenya contends that, while working for the Indianapolis Public Schools, she devised a set of educational materials for use with underachieving middle-school students. According to her complaint (which is all we have to go on at this stage), the school system and some of its employees initially responded with hostility but, after discovering that the materials worked, copied them without permission or compensation. The complaint was filed in state court and removed under 28 U.S.C. 1441 because the copyright claim arises under federal law. The district court dismissed the copyright claim with prejudice after Brooks-Ngwenya conceded that she had not registered her work with the Copyright Office. The court then remanded the remaining claims, based as they are on state law. See 28 U.S.C. 1441(c).

Registration is a condition to copyright-infringement litigation. “[N]o action for the infringement of the copyright in any United States work shall be instituted until preregistration or registration of the copyright claim has been made in accordance with this title.” 17 U.S.C. 411(a). Although Brooks-Ngwenya asserts that she failed to register because she did not understand the necessity of that step, and then because she “was distracted from following through” because of “interruptions coming from É staff members”, that is irrelevant. The statute makes registration or preregistration necessary. That's all there is to it. Registration is not complex (it is no harder that filing a lawsuit), and distractions must be overcome if authors want to litigate.

Brooks-Ngwenya tells us that she registered the work on May 19, 2006, while her appeal was pending. That is too late to save this litigation. A rule in the form “no action shall be instituted until ···” means that the condition must be fulfilled before the litigation begins. Satisfaction of the condition while the suit is pending does not avoid the need to start anew. See, e.g., McNeil v. United States, 508 U.S. 106 (1993) (Federal Tort Claims Act, which provides that no action may be instituted until an administrative claim has been made and resolved, requires dismissal of a suit filed before the administrative claim's resolution, even if that step occurs while the suit is pending); Hallstrom v. Tillamook County, 493 U.S. 20 (1989) (statutory requirement to wait 60 days after notice before filing suit requires outright dismissal of premature action rather than keeping it inactive on the docket for the 60-day period); Perez v. Wisconsin Department of Corrections, 182 F.3d 532 (7th Cir.1999) (same approach for exhaustion of administrative remedies under 42 U.S.C.1997e(a)).

Failure to satisfy a condition to litigation does not imply, however, that the plaintiff loses outright. A suit that is premature because a condition to litigation remains unsatisfied must be dismissed without prejudice. See Ford v. Johnson, 362 F.3d 395 (7th Cir.2004). If the condition can be satisfied while time remains in the statute of limitations, then a new suit may be filed and resolved on the merits. We do not see any indication that a fresh copyright suit would be untimely. Potentially infringing use of the materials is ongoing (according to Brooks-Ngwenya), and each new copy is a fresh wrong, with its own three-year period of limitations. See 17 U.S.C. 507(b); Courtis v. Cameron, 419 F.3d 989 (9th Cir.2005). So the distinction between dismissal with and without prejudice may be vital to Brooks-Ngwenya's entitlements.

Friday, October 20, 2006

The Labor Side of Web Video

Licensing issues with web video have to date focused on music copyright holders and motion picture studios, but a story in this morning's Los Angeles Times discusses another group worried about getting a slice of the pie, actors and actresses. As with all new technologies, it is not clear which payment formulas in contracts cover the new use.

This has been a recurring story from the days of silent movies turned into talkies, talkies exhibited on television, videocassettes, and then DVDs; in music the issue appeared when vinyl went into audio cassettes and then into CD, and now Mp3 files. There are usually payment tiers with the parties having very different views of which tier the new use should fit in. On the labor side, there is a determination not to get taken advantage of again. In the music industry, on the other side of the management-talent divide, some executives still passionately vow never to make the "MTV mistake again," a sentiment that infuses how they go about treating new technological market issues . Digital exhibition on websites, coming after the traditional period of being regarding as the copyright equivalent of the Boston Strangler, is now being embraced, if warily, as a new revenue source.

Enter the Screen Actors Guild. Unlike the disorganized music business, SAG will deal with the issue as a collective bargaining matter, and the story is a good read on how things might play out, including the possibility of a strike if residuals for episodes of "Ugly Betty" appearing on web sites aren't paid.

Thursday, October 19, 2006

Parallel Imports and Penguins

Last week I was reading a book review of a work entitled "Why Don't Penguins' Feet Freeze? And 114 Other Questions." The book is a compilation of questions submitted to the "Last Word" column of New Scientist magazine. I went to and typed in a search, but nothing came up. Since the magazine is from the UK, I went to Amazon's UK site, where I found it, for 8 pounds. The book was quickly dispatched to me. I received it less time than it takes a letter to get from New York City to my home in Connecticut, 35 miles away.

No doubt the book will eventually be available in the United States, but not now. The Internet and international booksellers have made available to U.S. consumers works before their U.S. distributors do. In some cases, such as the Harry Potter books, U.S. consumers create quite a demand for such parallel imports.

From 1790 to 1891, U.S. authors whose works were copyrighted in the United States could prohibit all parallel imports. At the same time, however, not only were the parallel importation rights repealed for American authors, but significant exceptions to the importation of works not complying with the manufacturing clause were made, not for the benefit of the author but for the benefit of certain importers. In addition, books, engravings, photographs, etchings, maps, and charts that were printed, bound, or manufactured more than 20 years before the date of importation, or imported by authority or for the use of the United States or the Library of Congress, could be brought in without the copyright owner’s permission.

The appropriateness of an importation right for both piratical and parallel copies was vigorously debated during the discussion leading up to passage of the 1909 Act. A compromise was reached in Section 30 of that Act. Importation of piratical copies and copies that did not comply with the manufacturing clause (even if authorized by the copyright owner) was prohibited except that one such copy could be imported either for individual use or for the use of any educational, literary, philosophical, scientific, religious, or fine arts society, educational institution, or free public library. While a theoretical argument could be made that a “piratical copy” included a work that was imported in violation of a territorial contract, Customs regulations took a contrary view, and thus there was no parallel import right under the 1909 Act.

The grant of a parallel importation right raises different issues than a right to ban the importation of piratical copies. With parallel imports, the copyright owner has authorized the reproduction and initial distribution. In addition, a parallel importation right might impose restrictions on individuals who purchase lawfully made copies in good faith, unaware of any territorial agreement. Furthermore, the very low standard of originality for copyrighted works has been used as a way around perceived deficiencies in the trademark law in order to stop importation of consumer products such as hair products, via an “original” label. For such consumer products, protection of copyright is not even an afterthought; it is not a thought at all. Instead, assertion of copyright in a shampoo label to ban the sale of a lawfully made product is a ruse to prevent the public from purchasing that product at a reasonable price. It is not coincidental that the majority of parallel import cases involve packaging for consumer products.

In the debates that led up to the 1976 revision of the 1909 Act, there was no disagreement about the need to give the copyright owner the right to ban the importation of piratical copies, and such a right was included in Section 602(b). The right to prohibit parallel imports was not as easily obtained. The 1961 report of the Register of Copyrights recommended against what it tellingly called “agreements to divide international markets,” favoring reliance on contractual protection. the Copyright Office expressed concern that a parallel import right “would impose . . . territorial restriction[s] upon third persons with no knowledge of the agreement. And even as between the [contracting] parties, Customs does not seem to be an appropriate agency for the enforcement of private contracts.”

Ultimately, though, the request of publishers for a right to prevent the importation of copies made overseas and brought in contrary to a contract with a foreign copyright owner granting them the exclusive right to distribute in this country was successful (see Section 602), but with three exemptions: (1) importation of copies or phonorecords under the authority of or for the use of the United States, any state, or political subdivision of a state (but not including schools); (2) importation of one copy or phonorecord of any one work at any one time for personal use (and and (3) importation by a scholarly, educational, or religious organization not for private gain of no more than one copy of any audiovisual work for archival purposes, or no more than five copies or phonorecords of any other type of work for lending or archival purposes.

It is the second of these exemptions that let me get my book from amazon UK. The penguin question, by the way, takes it place in a chapter dealing with questions such as "Why don't birds fall off of their branches when sleeping?" and "Why do sheep always run in a straight line in front of a car and not to the side?" For now, you will either have to order to book as I did from the UK or wait for a U.S. distributor.

Wednesday, October 18, 2006

Today's Stories About UMG

There were a number of stories yesterday evening and in this mornings' papers about UMG's suits against and for video file sharing. The suits, filed in the Central District of California, are also reported to allege reformatting and creating derivative versions of songs from artists like Mariah Carey.

Ms. Carey, of whom the New York Post ran a fetching picture (but with an inset picture of Doug Morris's head), also featured in a companion story, entitled "Exclusive," about a direct to consumer broadcast network launched by UMG containing UMG content on a subscription basis. Subscribers will have access to material not generally available, at least through lawful channels. The company that built the service for UMG is quoted as saying that "Entertainment industry executives have realized that they need to have their own networks, or else the software companies will just buy them and there won't be an entertainment business anymore," although I presume he was not referring to AOL's purchase of Time Warner a number of years ago. It should also be noted that existing entertainment network broadcasters do have their own websites, none of which have been as successful as other alternatives, especially of course free ones. Whether a subscription based service - versus a free, advertiser supported one -- is the way to go apparently continues to be the subject of debate.

Tuesday, October 17, 2006

Ringtone Ruling

Those wondering what type of novel issues of law might arise out of the Copyright Royalty Board's referral to the Register of Copyrights under new Section 803(a) need not wonder any more. In a 34 and a half single page ruling handed down yesterday (available at the Copyright Office website on the left side), the Register of Copyrights tackled the very important commercial question of whether (at least classes) of ringtones are subject to the section 115 compulsory license as digital phonorecord deliveries (known as "dpds"). The question was answered affirmatively. This is an epoch-making decision that bears repeated readings and not just the quick one I did for this posting, and not just for ringtones: one can expect statements made about the derivative right and derivative originality to be cited in diverse contexts. The politics of the dispute are also interesting, given that there is overlap between the RIAA and the NMPA (the combatants in the dispute) in terms of corporate membership of labels and music publishers. Since the amount paid for ringtones may be substantially less than the free market rate, the cost to consumers may go down as to payments to music publishers decrease. I imagine not just RIAA, but celllphone providers are rejoicing.

The Register carefully distinguished between earlier types of ring tones (monophonic, polyphonic) that were mostly synthesized and between more recent types (mastertones) which contain portions of an actual sound recording. She also noted that there are ringtones that are mixes of the original recording and other material; as to these 115 is not available.

The ruling focuses on 10 to 30 second tones. RIAA asserted musical ringtones are dpds subject to 115. Music publishers disputed the claim, arguing among things that ringtones were derivative works, fall outside the 115(a)(2) arrangement privilege, and that they are not distributed for private use. Since I assume that the music publishers would agree that delivery of an entire song as a ringtone (and certainly to a cellphone for playback) would be a dpd, the dispute is rooted in whether 115 covers snippets, including whether snippets implicate the reproduction and distribution right or instead the derivative right. Earlier ringtones would seem to have the strongest claim to involve the derivative right; with mastertones either you think 115 is limited to entire works or you don't.

The one part of the ruling that may have implications beyond ringtones involves the general standards for infringement of the derivative right. I was very happy to see the Register decline to follow the Ninth Circuit's approach in Mirage Editions, Inc. v. Albuquerque A.R.T. Co., 856 F.2d 1341 (9th Cir. 1988), which held that merely placing art works on ceramic tiles violated the derivative right. I confess however to being somewhat confused by the to-and-fro in yesterday's ruling between the standard for infringement of the derivative right and the standard for originality for constituting a protectible derivative work. Nimmer has long proposed such a relationship: “Unless sufficient of the pre-existing work is contained in the later work so as to constitute the latter an infringement of the former, the latter by definition is not a derivative work.” 2 Nimmer on Copyright § 8.09[A], p. 8-138 (2004)," but I have never understood it.

To me, he is mixing apples and oranges. For example, one could have a protectible derivative work based on public domain material material. Nor do I see how creating such a syllogism actually helps out in practice; to me, it does the opposite by directing courts to a different issue altogether. In the case of ringtones, the issue is not whether the snippet would be protectible on its own, but rather whether 115 covers such uses, an inquiry which centers on whether less than the whole of the work can still be a dpd and whether the arrangement provision in 115(a)(2) is implicated. It is, as the Register noted, a question of statutory intepretation, not one of too-cute rules of thumb. I understand the Register had to address the issue because the parties devoted so much attention to it, but to me it was beside the point.

Sunday, October 15, 2006

Canada's Tasini

At a Copyright Society of the USA annual meeting many years ago, there were two Canadians in attendance, a fact that inexplicably led the speaker to announce that representatives from both parts of Canada were present. I almost raised my hand and asked, "Do you mean the U.S. and French?" but as the son of a Canuck, I remained silent. English speaking Canadians are of course a rich source of comedians, who then move to the United States (see this link to "Well-Known People Who Happen to be Canadian") and there is the Toronto sensation Naked News, which is how Rupert Murdoch would like Fox to be if he could get away with it (perhaps it would then be called "Foxy News"). My interest is purer, though, analyzing how U.S.-Canadian relations play out in copyright cases. In the most recent of such cases, decided October 12th, Robertson v. Thomson Corp., the Canadian Supreme Court adopted the approach of our Supreme Court's Tasini v. New York Times (533 U.S. 483) approach, but only by a 5-4 margin.

17 U.S. Section 201(c) was the focal point of Tasini, in which the New York Times, without permission, authorized the inclusion of freelance authors’ separately owned contributions into different collective works, owned by third parties, e.g., NEXIS. This activity is not covered by Section 201(c). The Section 201(c) privileges cover only "that particular collective work" and "any revision of that collective work." The second "that" refers back to "that particular collective work," i.e., the original collective work in which freelancers’ separate contributions were first published.

Since the Times without permission authorized inclusion of the freelance authors’ works in a collective work which was not that collective work, but which was instead a third party’s different collective work, it exceeded their Section 201(c) privilege. As Congress noted, "the publisher [can] not revise the contribution itself or include it in a new anthology or an entirely different magazine or other collective work."H.R. REP. No. 1476, 94th Cong. 122-123 (1976).

The Copyright Office also noted:

Under [the Section 201(c)] presumption, . . . an encyclopedia publisher would be entitled to reprint an article in a revised edition of his encyclopedia, and a magazine publisher would be entitled to reprint a story in a later issue of the same periodical. However, the privileges under the presumption are not intended to permit revisions in the contribution itself or to allow inclusion of the contribution in anthologies or other entirely different collective works.
Copyright Law Revision Part 6: Supplementary Report Of The Register Of Copyrights On The General Revision Of The U.S. Copyright Law: 1965 Revision Bill (1965)

There is no doubt that NEXIS, the GPO, and other third-party collective works are "entirely different collective works" from "that particular collective work," i.e., the issue of the New York Times in which the contribution originally appeared. NEXIS preexisted, for example, the April 15, 2003, issue of the New York Times and contains millions of articles from other periodicals. NEXIS can in no sense be considered either that particular collective or any revision of that work. NEXIS is instead an entirely different collective work to whom the Section 201(c) privilege does not extend.

One is hard-pressed to think of how Congress could have made its intent more emphatic. If Congress had wished publishers to be able to include freelance authors’ works in third parties’ collective works, the limiting word "that" (coming on the heels, moreover, of the section’s reference to "that particular collective work") would have been deleted (as would the legislative history that expressly prohibits inclusion in new anthologies and "entirely different collective works"). Congress thus made it abundantly, emphatically clear that the privileges provided in Section 201(c) cover uses only of the original collective work (and of any later collective works in the same series).

And now for the Canadians. There is no corollary to Section 201(c) in Canadian law, and so the majority got to its result by a different route, that of distinguishing between rights that inure as a result of ownership of the collective work and rights that inure as a result of ownership of the individual contributions contained therein. But remarkably, the majority managed to fit its analysis into the one I gave above for how to construe what "that" collective work means in the specialized circumstance of Section 201(c). The majority got there through the concept of "decontextualization," meaning that third party databases are not a reproduction of the collective work and, according, the collective work owner does not have a right to reproduce the individual articles in a decontextualized way (other than a CD-ROM version which was found to be sufficient "contextualized").

The dissent focused quite a bit on the adverse consequences that flowed from Tasini, principally the subsequent removal of articles from the NY Times's database. But that result only flowed from the Times' decision not to pay for uses, not because freelancers insisted on being excluded from the database. The Times took care of the problem prospectively by requiring assignment of e-rights (and I believe for no extra payment) as a condition of being a stringer. Tasini is at best a default for those rare cases where publishers forget to take freelancers to the cleaners; it is not an inalienable right, and thus it is just as hard to get worked up over the Canadian dissent's parade of horribles as it was over the New York Times'. As Evita said,"Don't Cry for Me Argentina." (Here is a link to YouTube with a Madonna music video of the song along with other videos of the same ilk).

Thursday, October 12, 2006

Put Another Copyright Act on the Barbie, Mate

The Austrialians, makers of excellent wine and all around great folk, are in the midst of a copyright revision process. Here is a link to materials dealing with one aspect of that effort, "Exceptions and Other Digital Agenda" items. The process is worth following as an indication of how fair use and Internet issues are dealt with a fairly mature environment (relative to say 1976 or even 1998). Here is a brief summary of some of the issues from one of by favorite blogs, Kim Weatherall's (the link here takes you to a fuller discussion):

The Private Copying (Time-shifting and Format-shifting) Exceptions

The Bill has exceptions for two kinds of private copying: time-shifting, and format-shifting.

Time shifting is of course where you that is, tape a broadcast (radio or television), at home, for their private and domestic use, to watch or listen at a more convenient time. Good to see that they didn't persist with the 'watch once only' condition....

The format-shifting exception is more complicated. The idea is to allow private copying into different formats. Now, if you think about it, there are two reasons you might want to do that. you might want to format shift in order to 'space shift' - that is, have a private copy to carry around instead of the original hard or CD form, right? Like put it on your iPod. Or, you might want to format-shift because a format has become obsolete, and you want to move your collection to the new format (vinyl records to CDs, for example).

Which is the focus here? The explanatory material refers to both possibilities. But let's have a look at the conditions on format shifting:
  1. You can't do just any old format-shift. You can copy from books to any other format; from photographs from electronic format to a hard copy, or from hard copy to electronic; sound recordings from CDs, tapes, records, digital downloads to any other format (not podcasts); or films: from video to electronic format.

  2. You can't make a copy from a borrowed, or pirate copy: it has to be your, legitimately purchased or owned material

  3. You can copy only for your own 'private and domestic use'

  4. You can only make one copy in any given format (eg, one MP3 copy, one digital copy of a VHS film)

  5. You can't make 'serial' copies - ie further copies from your format-shifted copy.

  6. You can't sell, hire, etc your format-shifted copy.

Now, if this were a true 'space-shifting' exception, the condition that you can only make one copy in any given format is a bit awkward. As a student last week asked - does that mean if you make an MP3 copy, to put on your iPod, you can't also keep the MP3 on your laptop? The answer would be yes. Which is kind of inconvenient, if you are the type who doesn't always carry your iPod around, and uses their laptop as a source of music too. But if it were really a 'obsolete formats' exception, it's not clear that the prevention of serial copying makes all that much sense - surely you should be able progressively to copy your collection from format to format, as they come up. And surely, of course, you would have a condition that related to obsolescence of the format in some way.

Thus the thrust of the government's format-shifting exception is, in some ways, an uneasy compromise between these. Given the focus on iPods in the Inquiry (people were calling it the iPod inquiry, colloquially), it was important that the format-shifting exception attempt in some way to cover that activity. However, the exception can be justified in policy terms more readily on the basis of a need to shift from obsolete formats. If this exception ends up getting challenged, it will be interesting to see what the main justification put forward is - and whether it is accepted by an international tribunal, given the mix of motives apparent from the conditions imposed.

Tuesday, October 10, 2006

Project Posner

Tim Wu of Columbia University Law School (with the help of others) has created a searchable database of all of Judge Posner's opinions. Here's the link.

The purpose of the site is explained this way:

The purpose of this site is to make freely and easily available to the public Richard Posner's largest and greatest body of work — his judicial opinions. The database contains opinions from 1981 to 2006. It will not contain the most recent opinions.

Why this site? While Posner's books and popular writings are easily available to the public, his opinions are difficult or expensive for the public to access, let alone search. This site, for the first time, collects almost all of his opinions in a single searchable and easily readable database.

For lawyers and those interested in law, Posner's opinions have a particular substantive value. One thing that distinguishes the opinions is the effort to try and get at why a given law actually exists, and an effort to try and make sense of the law. That can make them more useful than most case reports.

In addition, the opinions often develop the American general and state common law. Posner is among the judges who feels free to take the rule of Erie as more suggestion than injunction.

Finally, some of the opinions are funny.

I did a number of searches. The first, not surprisingly, was "copyright." Sixty hits came back, the most recent being Assessment Technolgies (2004), the earliest being Rogers Co. Inc. v. Keene Mfg. Co. (1985). I then searched for the world's most popular search term, "sex," and came back with 124 hits, a clear indication that Judge Posner thinks about sex more than twice as often as he thinks about copyright. (See also his 1991 book Sex and Reason). Since Judge Posner is well known for law and economics issues it should not be surprising that he thinks about such issues alot; a real lot: a search of "actual damages" came back with 520 hits, almost 4 times as much as sex, a clear indication that he thinks about economics issues well over 4 times as much as sex.

Judge Posner should also be known for his ruminations and literature (See his revised 1998 book Law and Literature). A search of Kafka reveals 7 references including this one in Glenn v. Secretary of Health & Human Services, a 1987 opinion in which the issue was whether a 46 year old baker's helper was entitled to social security benefits due to an inability to stand up for long periods of time (due to degenerative arthiritis of the hips) and his unsuitability for desk jobs due to his alleged illiteracy. The district court affirmed the SSA ALJ's denial of benefits, a decision the court of appeals affirmed under what appears to be something like an abuse of discretion standard. In tackling the issue of whether Glenn was illiterate within the meaning of the SSA's regulations, Judge Posner wrote:

To decide whether Glenn is "literate" (= marginally educated) or "illiterate" is to impose a dichotomous classification on a continuous phenomenon; but law does that all the time for the sake of administrative simplicity, a pertinent illustration being Stephens v. Heckler, 766 F.2d 284, 286 (7th Cir. 1985). The regulations provide some guidance in performing this unavoidably arbitrary task of classification. They make clear that to be deemed literate you need only be able to read and write well enough to be able to hold simple, unskilled jobs. This is not everyone's idea of literacy; it would not satisfy the distinguished literary critic who said that "He who has read Kafka's Metamorphosis [the story about a man who wakes up one morning to find that he's a giant bug] and can look into his mirror unflinching may technically be able to read print, but is illiterate in the only sense that matters." George Steiner, Literacy, in Steiner, Language and Silence: Essays on Language, Literature, and the Inhuman 3, 11 (1974).

Hamlet is cited 13 times in the database, Bleak House once and Merchant of Venice once, clearly indicating that Judge Posner thinks about Hamlet almost twice as much as Kafka, which may or may not be healthy. One can of course create your own stats and form your own profile, something Professor Wu encourages. Happy searching.

Monday, October 09, 2006

State Law and Copyright Contracts

The intersection of state and federal law comes into play in a number of contexts, preemption being one. Another is interpretation of contracts. There are a number of provisions in chapter 2 of the Copyright Act that deal with the copyright contracts, such as 201 (divisibility) and 204 (formalities); state law can't add to or take away from such requirements and thus has no role to play in issues such as whether an exclusive license may be oral (it can't be even if state law permits it to be).

One still comes across issues surrounding whether renewal rights were assigned, but that is usually regarded as involving a question of federal law since there is a strong federal policy on preserving such (federal) rights.

One area where the courts are split is whether a contract silent on the questions conveys rights of exploitation for technologies not in existence at the time of the contract. If one applies federal law, one has to be applying a policy, since there is nothing in the statute about such issues. Courts too are split about what such a policy is: is the policy a default policy favoring authors (authors keep what they don't expressly convey because copyright supposedly favors authors), is it a policy drawn from amorphous contract principles like construing ambiguities against the drafter of the contract (the Maltese Falcon case), or does one purport to be neutral as Judge Leval of the Second Circuit stated in the Boosey & Hawkes case? Alternatively, does one look to state law (as Judge Newman of the Second Circuit indicated in the Rosetta books case), a step which in turn leads one to the same lacunae: there is no state law on how to interpret federal copyright rights, so does one resort to policy judgments involving creative individuals, or attempt to apply general contract principles?

Some issues involving copyright contracts are clearly matters of state law: whether there was a meeting of the minds, adequate consideration, and some issues about the scope of the contract. Rescission of contracts was previously the subject of a dispute between the 9th Circuit in its Rano case and every other circuit to have considered the issue, including the 7th in the Walthal case: the 9th Circuit read into a conveyance of non-exclusive rights the Section 203 termination time restriction, a step the other circuits disparagingly rejected.

A recent decision from the Seventh Circuit, Automation by Design, Inc. v. Raybestos Products Co., 2006 WL 2636454 (7th Cir. 2006), by the wonderful Judge Ilana Rovner, contains a very helpful guide to some of these issues, including a review of Walthal. I excerpt below the relevant sections from her opinion, given she admirably covers issues that are frequently overlooked in traditional discussions of copyright law:

In this copyright infringement dispute, Automation by Design, Inc.(ABD) alleges that Raybestos Products Company, a wholly owned subsidiary of Raytech Corp., (together “Raybestos” or “RPC”) infringed on its copyright and breached their agreement when it hired Production Design Services, Inc. (PDSI) to build a duplicate machine of one that ABD had designed and built for Raybestos several years earlier. Because we find that Raybestos did not violate the terms of the license agreement, we affirm the decision of the district court granting summary judgment and declaratory judgment in favor of the defendants, Raybestos and PDSI.


Raybestos manufactures parts used in the automotive industry. In late 1998 or early 1999 it contacted ABD, a designer and manufacturer of automated assembly machines, to initiate negotiations for a contract to manufacture an automated clutch plate assembly machine to replace an existing one. Representatives from the companies met several times and ABD submitted three separate offers, none of which was accepted by Raybestos. On June 21, 1999, following further discussions by the parties, ABD sent Raybestos a letter offering to build the clutch plate assembly machine for $756,000. Among other things, the June 21 offer letter memorialized the parties' earlier agreement that Raybestos would itself purchase all of the component parts for the machine, allegedly due to concerns about ABD's financial health. The letter also contained the following language which forms the gordian knot of this case:ABD grants RPC the right to duplicate any or all design copyrighted by ABD, as it relates to this project. This “license” is non-transferrable and is only for equipment to be used exclusively by RPC and does include any equipment to be fabricated for resale or transferred to a customer or supplier of RPC.(R. at 90, Ex. M, p. 2).Raybestos accepted the terms of this June 21 offer letter and, on June 24, 1999, issued a purchase order. The purchase order required, among other things, that ABD design, construct, and install a clutch plate assembly machine and provide Raybestos with a reproducible set of machine drawings. The purchase order also reflected the parties' agreement that “the price for duplicates of this machine will be for not more than 85% of the price of this machine.” (R. at 90, Ex. N, p. 2). ABD accepted the terms of the purchase order and designed, manufactured and, sometime in the summer of 2000, installed the machine and delivered to Raybestos all of the documentation specified in the purchase order, including the machine design drawings. ABD affixed a copyright symbol to each drawing.All remained well until late 2001 or early 2002, when Raybestos contacted ABD and requested a quote for a second machine expecting the 15% discount described in the June 24, 1999 purchase order. The quote from ABD, however, was not 15% less than the price of the first machine, but rather it was 10% higher. ABD asserts that because Raybestos requested over thirty material changes to the machine, ABD did not view the second machine as a duplicate of the original, subject to the terms of the discount. Raybestos disagreed. Smarting from the higher quote, Raybestos sought bids from alternate suppliers, but continued to negotiate with ABD. During negotiations, Raybestos informed ABD that it had received a bid for nearly $250,000 less than ABD's bid. In response, on July 3, 2002, ABD's attorney delivered a letter to Raybestos declaring that “the Plans are the exclusive property of Automation by Design, and may not be reproduced or used by Raybestos or provided by Raybestos to any third party for its use.” (R. at 90, Ex. V). Raybestos countered this claim by pointing to the language of the purchase order granting Raybestos the right to duplicate any or all designs for equipment to be used exclusively by Raybestos. ABD's letter also revoked the license effective immediately and demanded the return of the designs. Raybestos disagreed with ABD's interpretation of the contract language and continued to pursue alternate suppliers. Toward that end, during fall 2002, Raybestos made three copies of the machine manual. Ken Harlan, Raybestos' manager of Technical Services, delivered one copy of the manual to each of six different suppliers with directions to return the copy with its bid along with a confidentiality agreement. When one supplier returned the copy of the machine manual, Harlan delivered that same copy to another supplier. All of the copies of the machine manual were returned to Raybestos with the bids. Ultimately Raybestos chose PDSI to design and install the second machine, incorporating the thirty-three changes requested by Raybestos, and, some time after June 30, 2003, Raybestos provided PDSI with a copy of ABD's drawings to use during the manufacturing process. PDSI made a photocopy of the ABD drawings and used the manual to obtain the list of component suppliers and to identify the various changes that Raybestos requested. At the end of its process, PDSI generated a complete set of its own drawings for the machine it built. On March 31, 2003, ABD registered its copyright with the U.S. Copyright Office. ABD does not hold a patent on the ABD Machine or any part of it. ABD subsequently brought a claim against Raybestos and PDSI alleging copyright infringement and breach of contract and requesting declaratory relief. Raybestos and PDSI counterclaimed for breach of contract and declaratory relief. Upon the defendants' motion, the district court granted summary judgment for the defendants. Thereafter the defendants moved the district court for entry of a declaratory judgment in their favor and against ABD. Raybestos separately moved to voluntarily dismiss its breach of contract claim. The district court granted the defendants' motions and entered final judgment in favor of the defendants and against ABD. ABD appeals and we affirm.


For the most part the parties do not dispute the course of events described above (with minor disagreements regarding motivation and intent). The crux of the dispute is whether the language of ABD's June 21,1999 letter, and Raybestos' responsive purchase order of June 24, 1999, which together formed the contract between the parties, allowed Raybestos to act as it did-that is, to hire PDSI to create a second clutch plate assembly machine. Because the primary question is interpretation of a written contract, this matter is particularly amenable to summary judgment, Cherry v. Auburn Gear, Inc., 441 F.3d 476, 481 (7th Cir.2006) (explaining that where there is no contractual ambiguity, a contract's interpretation is a matter of law); Orthodontic Affiliates, P.C. v. Long, 841 N.E.2d 219, 222 (Ind.Ct.App.2006) (“Generally, the construction of a written contract is a question of law for which summary judgment is particularly appropriate.”), which we will grant after de novo review if there are no questions of material fact and the defendants are entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Hess v. Reg-Ellen Mach. Tool Corp., 423 F.3d 653, 658 (7th Cir.2005).

A. Copyright infringement.

Although the United States Copyright Act, ... grants exclusive jurisdiction for infringement claims to the federal courts, those courts construe copyrights as contracts and turn to the relevant state law to interpret them. Kennedy v. Nat'l Juvenile Det. Ass'n, 187 F.3d 690, 694 (7th Cir.1999). The district court properly turned to Indiana law to resolve the dispute between these two corporations whose principal places of business are in Indiana. (R. at 104, p. 7). Under Indiana contract law, interpretation of an unambiguous contract is a matter of law that can be resolved on summary judgment. Orthodontic Affiliates, P.C., 841 N.E.2d at 222. Ambiguous contracts, on the other hand, must be set before a trier of fact to ascertain the facts necessary to construe the contract. Id. When a court grants summary judgment it has necessarily determined that the contract is not ambiguous or that any existing ambiguity can be resolved without the aid of a factual determination. Perryman v. Motorist Mut. Ins. Co., 846 N.E.2d 683, 687 (Ind.Ct.App.2006) .ABD maintains that the contract at issue in this case is ambiguous and that it cannot be interpreted without resort to parol evidence. Raybestos counters that ABD failed to make this argument to the district court and therefore has waived the right to do so in this court. Although it is true that the arguments were framed slightly differently in the summary judgment briefing below (R. at 90, 97, 100), ABD sufficiently raised the question of ambiguity to preserve its right to argue to this court that the language of the contract fails to clearly define which subdivided copyrights ABD granted to Raybestos-a question to which we now turn. The rights comprised in a copyright may be subdivided and transferred. 17 U.S.C. 201(d)(2) (“Any of the exclusive rights comprised in a copyright, including any subdivision of any of the rights specified by section 106, may be transferred as provided by clause (1) and owned separately.”). In other words, a copyright holder may transfer the right to duplicate to one person, the right to distribute to another, and the right to produce derivative works to yet another. See ITOFCA Inc. v. MegaTrans Logistics, Inc., 322 F.3d 928, 929-30 (7th Cir.2003) (“Making and selling are distinct rights and you can assign one without the other.”). This case turns on which subdividable rights ABD granted to Raybestos. To determine which rights ABD granted to Raybestos, we look to the language of the agreement. If, and only if, the language is ambiguous may we turn to evidence outside of the four corners of the agreement to determine the parameters of the license. Magee v. Garry-Magee, 833 N.E.2d 1083, 1087 (Ind.Ct.App.2005). The language of a contract is not ambiguous simply because the parties disagree as to the meaning of the terms. Simon Prop. Group, L.P. v. Mich. Sporting Goods Distrib., Inc., 837 N.E.2d 1058, 1070 (Ind.Ct.App.2005): “A contract is ambiguous only where a reasonable person could find its terms susceptible to more than one interpretation.” Cummins v. McIntosh, 845 N.E.2d 1097, 1104 (Ind.Ct.App.2006). To determine if there are any ambiguities in the contested two sentences of the June 21, 1999 letter, we begin by eliminating that which is clear. Both parties agree that the license unambiguously gave Raybestos the right to duplicate the designs of the clutch plate assembly machine. The language as to this point is unequivocally clear: “ABD grants RPC the right to duplicate any or all design copyrighted by ABD, as it relates to this project.” (R. at 90, Ex. M, p. 2).*4 The next sentence of the keystone paragraph states that the “license”-that is, “the right to duplicate any or all design”-“is only for equipment to be used exclusively by RPC.” The question then becomes: what does it mean to be permitted to use a license “for equipment.” One obvious way to use a “right to duplicate the design” license “for equipment” is to duplicate that equipment. Consequently, the language on its face appears to allow Raybestos to duplicate the equipment. Indeed, ABD itself agrees that Raybestos could duplicate the equipment, so on this point the language is clear. ABD argues, however, that Raybestos could duplicate only parts of the equipment and then solely for the purpose of maintenance and repair. ... As evidence for this proposition, ABD points to its June 14, 2001 letter to Raybestos which states, “for maintenance and repair purposes, Raybestos Products Company does have the right to duplicate parts of the assembler.” ... As just noted above, however, where the terms of a contract are clear and unambiguous, this court cannot consider extrinsic evidence.... . The parties' agreement as to the meaning of this language-that Raybestos had the right to duplicate equipment-constitutes vigorous proof of the clarity of language. Indeed, if the parties agree as to the meaning, it seems certain that a reasonable person could interpret this language in only one way. .... The major dispute then turns on whether Raybestos had the right to duplicate only parts of the equipment, as ABD maintains, or to duplicate the machine in toto, as Raybestos argues-a question to which we will turn momentarily. In any case, reviewing the controverted language to this point, we can conclude that resort to extrinsic evidence is unavailable given the lack of ambiguity in the agreement.Interestingly, even if we were to consider the proffered parol evidence, that evidence only would serve to clarify this interpretation. The letter to which ABD refers makes clear that the agreement allows Raybestos to use the designs to duplicate parts of the machinery (as opposed to simply duplicating the design itself, as by photocopy). Raybestos insists that the letter makes clear that Raybestos could duplicate parts solely for maintenance and repair purposes: “for maintenance and replacement purposes, Raybestos Products Company does have the right to duplicate parts of the assembler.” ..... Nothing in that letter, however, limits Raybestos to duplicating parts for maintenance and repair only. The letter, after all, was written in response to Raybestos' purchase order for a specific part, and only addresses, therefore, Raybestos' right to replace that particular part. To understand Raybestos' copyright permission in other contexts, one would have to turn back to the language of the agreement which, as we interpreted above, issues a broad grant to duplicate any or all designs “for the equipment.” In this way the extrinsic evidence further clarifies the language of the agreement which, on its face, grants Raybestos the right to use the license to duplicate parts of the equipment. We emphasize, however, that because the language of the contract is subject to only one interpretation, we need not and will not rely on extrinsic evidence to guide our way. Similarly, the court cannot add to, vary, or explain the terms of this unambiguous agreement. Cooper v. Cooper, 730 N.E.2d 212, 215 (Ind.Ct.App.2000). Consequently, we reject ABD's invitation to the court to interpret the contract or add language to it limiting the license to the repair and maintenance of the machine. Turning to the second sentence of the disputed paragraph, ABD's letter states that the “license is non-transferable”-language that is similarly unambiguous. In other words, whatever rights ABD granted to Raybestos, Raybestos could not transfer those rights to another. The sentence that follows augments and clarifies this conclusion: the license “is only for equipment to be used exclusively by [Raybestos] ····” This language indicates that ABD intended to prevent Raybestos from using ABD's designs to enter the clutch plate assembly business itself-that is from manufacturing clutch plate assembly machines for sale to others. Similarly, it intended to prevent Raybestos from transferring the designs to a third party to manufacture equipment to be used by or sold to entities other than Raybestos.After this point, however, the streak of clarity ends. Recall the language of the June 21 letter:ABD grants RPC the right to duplicate any or all design copyrighted by ABD, as it relates to this project. This “license” is non-transferrable and is only for equipment to be used exclusively by RPC and does include any equipment to be fabricated for resale or transferred to a customer or supplier of RPC. The second sentence of this paragraph is made up of two clauses which appear to contradict one another. In the first clause it restricts Raybestos' use of the license to “equipment to be used exclusively by [Raybestos].” The second half of the sentence, however, seems to allow Raybestos the use of the license to fabricate equipment for resale or to transfer equipment to a customer or supplier-a seemingly limitless grant of permission to use the license, including a grant to use the license to compete directly with ABD. Neither party mentions this contradiction in the briefing before this court and the district court ignores it as well, most likely because all parties assumed, as we do, that ABD meant to include the word “not” between the word “does” and “include.” In fact, in depositions the deponents repeatedly read the contract to include the word “not.” Resolving this ambiguity is not necessary for the resolution of this matter (indeed, as just noted, neither the parties nor the district court mentioned it). Such a glaring contradiction in the key paragraph of the contractual language warrants mention, however, if not resolution. We could resolve the matter simply by applying the doctrine of mutual mistake, and, since the ambiguity is one that can be resolved without aid of a factual determination, it does not prevent a grant of summary judgment.... But because such resolution is not necessary for a decision in this case, we mention the contradiction solely for the sake of thoroughness. Having reviewed all of the key language of the contract, we can turn to the parties' arguments regarding the alleged transfer of the design. According to ABD, Raybestos violated the agreement when it transferred the design to PDSI for the purpose of allowing PDSI to manufacture a duplicate machine for Raybestos' use. ABD makes two claims regarding transferability and distribution. The first is that the license did not permit any distribution or transfer whatsoever: “the language of the license clearly states that the ‘license is non-transferable.’ ” (ABD brief 14); “the use of the term nontransferable means nontransferable.” (oral argument at 25min:33-37sec); “[a]bsent from the language the License, however, is any right to distribute the Designs.” (ABD brief 15); “there is no question but that the License language does not permit distribution.” Id. 18; “it is without question that the express language of the License prohibited the transfer of any duplication rights to any third party, including PDSI.” Id. at 22; “[o]n it's face, the License did not grant any rights of distribution.” Id. at 10. At the same time, it concedes that, despite the language on the face of the agreement, Raybestos had an “implicit right of distribution for the sole purpose of maintaining and repairing the machine,” (oral argument at 1min:13-18sec) one that was not apparent from any language in the agreement, but solely from the extrinsic evidence. (ABD brief at 19, Reply brief at 11). In short, ABD simultaneously argues that “non-transferable means non-transferable”-period, but also states that there are exceptions to the prohibition of transferability. Raybestos' position, on the other hand, is that defining the scope of a permissible transfer is unnecessary as Raybestos never transferred or attempted to transfer the license to PDSI. (Appellee's brief at 27). Rather, the license applied to PDSI as Raybestos' agent. Id.ABD counters that PDSI could not have been Raybestos' agent because the two parties signed an agreement which specifically defined their relationship as that of independent contractors and not agents. (R. at 97, Ex. 8). This puts too fine a point on it. We need not delve into a complex discussion of agency to understand the term as Raybestos uses it here. Raybestos hired PDSI “to act for or in place of” itself, as a representative. See Black's Law Dictionary, (8th ed.2004) (defining “agent” as “[o]ne who is authorized to act for or in place of another; a representative.”). Regardless of how the two parties chose to define their relationship for remuneration, tax, employment law, or tort liability purposes, for purposes of determining whether a transfer occurred, it seems clear that Raybestos simply hired PDSI to act in Raybestos' stead-using the design to create a machine that it likely did not have the capacity to create on its own. To see that Raybestos had the right to use the designs in this manner we need only look to a more clear-cut example. Take, for instance, Raybestos' right to duplicate the designs. All parties agree that this language clearly allowed Raybestos to make photocopies of the designs. If, however, Raybestos lacked the capacity to photocopy the designs on sight (if, for example, the designs were to large for an ordinary copier or needed to be reproduced in color), Raybestos could certainly take the designs to a Kinko's photocopy shop to have them copied. Similarly, if it lacked the capacity to manufacture parts on its own, it had the right to hire another to do so in its stead. It is true, as the dissent points out, that PDSI benefitted from having the designs. It benefitted in part, however, in the same way that Kinkos might benefit from being awarded a photocopy job. Additionally, of course, PDSI saved considerable time and expense by not having to reinvent the wheel. But again, had Raybestos opted to put engineers and manufacturers on its payroll to complete the job on its own, it would have saved considerable expense by having the designs rather than being forced to reverse engineer the machine. The benefit of having the designs, therefore, was Raybestos' benefit-a benefit for which it paid. Without the designs, Raybestos would have had to start from scratch-a contingency it avoided by requiring access to the designs as a term of the agreement. The dissent would return this case to the district court for further proceedings to determine whether “PDSI's low bid on the replacement machine and its possession of the existing machine's designs was merely coincidental in the face of a reasonable inference to the contrary.” Post at ----. As the above discussion demonstrates, however, the answer to that question is irrelevant. Once Raybestos secured the rights to duplicate the designs and “use the license” to duplicate machinery, it could hire another party to manufacture parts for it if Raybestos lacked the tools or skills to do so itself. Allowing one's agent or contractor to use designs for one's own benefit is not a transfer. The definition of a transfer under the Copyright Act is not helpful in this context as it explicitly excludes from its definition non-exclusive licenses like the one in this case. Other general definitions of “transfer,” like the one from Black's Law Dictionary, are perhaps more helpful. Black's defines a transfer as “(1) [a]ny mode of disposing of or parting with an asset or an interest in an asset, including a gift, the payment of money, release, lease, or creation of a lien or other encumbrance ··· (2) Negotiation of an instrument according to the forms of law ··· (3) A conveyance of property or title from one person to another.” Black's Law Dictionary (8th ed.2004). Surely Raybestos never intended to part with whatever license rights it had. Raybestos needed then, and likely needs today, the ability to use the designs to operate and maintain its machinery. Furthermore, PDSI signed a Secrecy and Confidentiality Agreement agreeing not to use any proprietary information it gained in its work with Raybestos for commercial use, so it has no continuing need or ability to use the license. (R. at 90, Ex. X).The second sentence of the disputed agreement language further explains the parameters of what the parties intended to constitute a transfer. The license “is only for equipment to be used exclusively by RPC.” In other words, the purpose of prohibiting a transfer was to prevent Raybestos or third parties from going into the clutch plate assembly business and selling such equipment to others. The license permitted Raybestos to employ the designs only for its own use-which is precisely what it did.This conclusion-that no transfer occurred-wraps up all but one aspect of the copyright infringement claims in this case. ABD argues that although Raybestos could duplicate and manufacture parts of the machinery on its own, it could not duplicate the machinery as a whole. But once ABD admitted that Raybestos could duplicate parts of the equipment for maintenance and repair, this fight was over. For there is nothing in the contract language that would distinguish between copying and making derivative works for one or more parts, but not for the machine as a whole. And, as explained above, whatever rights Raybestos had to duplicate, it could hire PDSI to do so in its stead. The dissent argues that the right of duplication was limited to the “project” which the dissent claims was only the “first machine.” Post at ----. From this the dissent concludes that “Raybestos's implied right of distribution should not extend beyond making spare and replacements parts for the first machine because ABD has not admitted such a right of distribution.” Id. (emphasis ours). But this leap in logic works only if we grant ABD's request to interpret the contract to add such limiting language-that is if we accept ABD's contention that the contract implies something that it does not say. And for the reasons described above, we cannot. Furthermore, the language points to the opposite result. If the license grants a right of duplication as it relates to the project, as the dissent states, and the project is defined as the first machine, then Raybestos had the right to duplicate the first machine in toto. The district court correctly granted summary judgment for Raybestos and PDSI on this copyright infringement claim.

B. Revocation of the license.

Because Raybestos did not materially breach the license agreement, the district court was correct in determining that ABD could not revoke the license for breach of the agreement. (R. at 104, p. 11). We turn consequently to the only remaining question in this case-whether ABD could terminate the license at will. Under Indiana law, a contract which provides no termination date is terminable at will by either party. Furthermore, state law governing contract termination does not conflict with and is therefore not pre-empted by the federal Copyright Act. Walthal v. Rusk, 172 F.3d 481, 485 (7th Cir.1999). In other words, if a contract is terminable at will under Indiana law, nothing in the federal Copyright Act would prevent such a termination.According to ABD, because the contract provided no termination date or fixed duration, ABD could terminate it at will. In support of its position it cites Walthal, which upheld the right of a musical group to cancel an oral contract of unspecified duration that gave a record distributor the nonexclusive right to manufacture and sell certain recordings in return for a fifty percent share of the sales. Id. at 485-86. The Walthal court's task was to determine whether Illinois' common law allowing contracts of unspecified duration to be terminated at will conflicted with the Copyright Act's § 203 on termination which allows copyright holders to terminate the grant of a license after thirty-five years. Id. at 483. The Walthal court concluded that it did not. Id. at 485. The Copyright Act allows a copyright holder to terminate the grant of a copyright after thirty-five years, but nothing in the act prevents parties from agreeing to a shorter period for termination or prevents the operation of state law allowing termination at will. Id. at 482, 484-85. ABD points to Walthal as definitive support for its claim for the proposition that any copyright license of indefinite duration can be terminated at will. Because Walthal upheld a copyright grantor's right to terminate the license at will, even where the license holder had paid consideration for the license, the case certainly appears helpful to ABD's claim. Regarding consideration and termination, however, Walthal says only: “Touch and Go presents two primary issues. The first is that the licensing agreement is irrevocable because consideration-the 50 percent share of the profits-was paid. This contention is without merit.” Walthal 172 F.3d at 483. In essence, the Walthal court assumed that the contract was terminable at will under Illinois law and instead turned its attention to the question of whether Illinois or Federal Copyright law prevailed. In this case, however, we must answer the threshold question as to whether the contract at issue between the parties was terminable at will. And because this court looked more precisely at this particular question in Baldwin Piano, Inc. v. Deutsche Wurlitzer GmbH, 392 F.3d 881 (7th Cir.2004), that trademark case provides more guidance for our analysis.After a reorganization in the Wurlitzer company, Baldwin Piano kept the piano and organ business and became the new parent company of the organization; Deutsche Wurlitzer GmbH, a jukebox manufacturer, was spun off to another firm but received a license to continue to use the famous “Wurlitzer” name on its jukeboxes and other products. Id. at 882. Eighteen years later, Baldwin Piano informed Deutsche Wurlitzer that the license was cancelled effective immediately. Id. The court, looking to the contractual termination language and the economic realities of the situation, held that the license could not be terminated at will. Id. at 886.What both parties and the district court ignored, is that just like the parties in Baldwin Piano, but unlike the parties in Walthal, the agreement between ABD and Raybestos did indeed contain a termination clause. Raybestos' June 24, 1999 Purchase Order, contained boilerplate language which allowed for termination due to default or at Purchaser's (Raybestos') convenience. Both parties agree that this document, along with the June 21, 1999 offer letter from ABD formed the agreement between the parties. (R. at 97, p. 6); (Appellee's brief at 10-11). Although ABD describes the fine print of Raybestos' purchase order as boilerplate it makes no contention that it was not binding. Cf. Prall v. Ind. Nat. Bank, 627 N.E.2d 1374, 1378 (Ind.Ct.App.1994) (holding a party to the terms of boilerplate language where he was a sophisticated party and did not contend that the boilerplate language was ambiguous or that he agreed to it under economic duress). In Baldwin Piano, the court looked at the contract's termination clause and determined that the enumerations in that clause were exclusive rather than illustrative and consequently prohibited any other form of termination including termination at will. Baldwin Piano, 392 F.3d at 884. The Baldwin Piano court relied on an Illinois Supreme Court decision holding that a non-exclusive list of reasons for termination makes the term of the contract indefinite and permits termination at will. Id. Conversely, an exclusive list of reasons for termination prevents termination at will. Id. Although we do not have the same elucidation from the Indiana Supreme Court as the Baldwin Piano court had from the Illinois Supreme Court, a natural reading of the agreement terms in this case indicates that the parties have delineated the instances in which they anticipated permissible termination and that list appears to be exclusive rather than illustrative. Consequently, the language of the agreement supports an interpretation that the contract was not terminable at will. See id.Similarly, the economic realities of the agreement favor treating the license as perpetual rather than terminable at will. See id. at 883. According to ABD, it gave Raybestos a very limited license to duplicate its designs. That license, it contends, would have allowed Raybestos to make photocopies of the designs or to use the designs to maintain and replace parts, but nothing more. Even accepting ABD's narrow construction of the license, it defies economic logic for Raybestos to enter into an agreement to purchase a machine where the license that allowed it to repair or maintain the machine could be revoked at any time. For if ABD revoked the license, then the first time a critical part broke or failed, the machine would have become essentially useless to Raybestos. “Businesses are not compelled to make sensible bargains, but courts should not demolish the economic basis of bargains that would be sound if the contract were given a natural reading.” Id. at 883-84. Both the natural reading of the contract language and the nod to economic reality favor an interpretation that the license agreement was not terminable at will.Looking further through a lens of economic sensibility, we note that, like the parties in Baldwin Piano, and unlike the parties in Walthal, these parties were not engaged in a long-term interactive arrangement. As the Baldwin Piano decision points out, the “terminable-at-will” doctrine was designed to allow businesses to part ways amicably where they had an ongoing long-term relationship that required coordination and agreement over a long period of time and where the relationship was no longer profitable for one or more parties. “Terminablility means that, if the firms' goals or methods diverge, either side may get out.” Id. at 885. But where, as here, the parties are not locked together in an ongoing relationship there is no sense in presuming that the parties intended to make their contract terminable at will, particularly where the language of the agreement, the nature of the license, and the economic realities dictate otherwise. See id. at 885-86. Consequently we find that the agreement was not terminable at will. We need not, therefore, delve into the dispute regarding whether Raybestos provided separate consideration for the license.The judgment of the district court granting summary judgment and a declaratory judgment for Raybestos and PDSI is affirmed.