Monday, July 30, 2007

Kiwis and Copyright

A select committee of the New Zealand government has been studying possible amendments to the NZ copyright act. On Friday, the committee issued a report along with recommendations. The 75 page document may be found here. News reports on the bill are mixed, see here.

New Zealanders seem particularly ripped about provisions on format shifting for music and the apparent ability of music copyright owners to opt-out of the ability to make format changes through labeling. There are no provisions on video. Among the more interesting provisions are ones stating that technologically required transient copying does not violate the reproduction right, amendments to the definition of service provider, TPM requirements, and changes in the notice and take down provisions.

Thursday, July 26, 2007

Pre-Trial Forfeiture in Copyright cases

Federal Rule of Civil Procedure 64 provides that at the commencement of and during the course of a civil action, all remedies providing for the seizure of property in order to secure satisfaction of a judgment ultimately entered are available according to the law of the state in which the federal district court sits, subject to (among other things) "any existing statute of the United States govern[ing] the .. extent to which it is applicable." My view, which is admittedly ignorant, is that this provision is not applicable because the Copyright Act itself spells out what pre-trial remedies are available and because any such state remedy would be preempted by Section 301.

A recent case in Puerto Rico rejected an outrageous Rule 64 request, although not on this ground. Here's the opinion in full:

--- F.Supp.2d ----, 2007 WL 2118854 (D.Puerto Rico)
United States District Court, D. Puerto Rico.

ESTATE OF Roberto HEVIA, Plaintiffv.PORTRIO CORPORATION, et al., Defendants.
Civil No. 07-1363 (JP).

July 23, 2007.

OPINION AND ORDERJAIME PIERAS JR., U.S. Senior District Judge.*1 The Court has before it the plaintiff's motion for a hearing and for provisional remedies. The plaintiff claims it owns the copyrights to architectural plans created by Roberto Raúl Hevia-Acosta, and alleges the defendants infringed those copyrights by using them to develop a residential complex in Río Grande, Puerto Rico. In its Second Amended Complaint, the plaintiff claims damages in the amount of $1,365,750.03 in profits it would have realized if the defendants had lawfully used the plans for the residential complex, and $31,500,000 in profits it alleges the defendants gained from the sale of units in the residential complex. The plaintiff moves the Court to exercise its authority under Rule 64 of the Federal Rules of Civil Procedure (1) to garnish any and all of the defendants' property in the possession of third parties up to the amount of $1,365,750.03 plus interest, and (2) to attach a certain property in Río Grande, presumably the entire residential complex that is the subject of this action. The plaintiff also moves the Court to hold a hearing on its motion for these provisional remedies. The plaintiff's motion (No. 12) is DENIED.A federal district court has the authority to issue orders “providing for seizure ... of property for the purpose of securing satisfaction of the judgment ultimately to be entered in the action.” Fed.R.Civ.P. Rule 64. Rule 64 provides that, subject to exceptions not relevant here, such provisional remedies are available under the circumstances and in the manner provided by the law of the state in which the district court sits. See id. Rule 56 of the Puerto Rico Rules of Civil Procedure provides that upon a motion by the claimant a court “may issue any provisional order it may deem necessary to secure satisfaction of the judgment.” P.R. LAWS ANN. tit. 32, App. III R. 56.1 (1979). The Supreme Court of Puerto Rico has construed Rule 56 expansively, “Rule 56 of the Rules of Civil Procedure confers on the court sufficient flexibility to issue the measures which it deems necessary or convenient, according to the circumstances of the case, to secure the effectiveness of judgments.” HMG Prop. Investors, Inc. v. Parque Indus. Río Cañas, Inc., 847 F.2d, 908, 913-914 (quoting F.D. Rich Co. v.Super. Ct., P.R.R. 155, 173 (1970)). An attachment order may not be entered without notice to the adverse party and a pre-attachment hearing, unless the claimant demonstrates (1) a previous proprietary interest in the object to be attached, (2) the existence of extraordinary circumstances, or (3) the probability of prevailing on the merits through the use of authentic documentary evidence which shows there is a debt liquid, due, and payable. See P.R. LAWS ANN. tit. 32, App. III R. 56.2 (1979); see Rivera-Rodríguez v. Stowell, 133 D.P.R. 881, 896 (1993).Here the plaintiff's motion for pre-judgment attachment and for a hearing is denied, because there is insufficient information in the motion to indicate that the requested pre-judgment attachment might be necessary to secure satisfaction of an anticipated judgment, or even that the Court should hold a hearing to decide the issue. The plaintiff's motion is only eight pages long, and the section titled “Arguments in Support of Provisional Remedy” is less than two pages long. The plaintiff merely argues that pre-judgment attachment would be necessary to secure a judgment as follows,*2 In the past, some of the co-defendants in this case have left other corporations they have created to develop the projects, as in this case, without any monies to satisfy the judgment. Thus, it is imperative that an attachment be granted to satisfy the future judgment that will be entered in this case.No. 12 at 6. These arguments, without more, are insufficient to indicate that the sweeping remedies the plaintiff requests, one of which would apply against all defendants, are necessary to secure a judgment in the plaintiff's favor.The plaintiff's motion must also be denied, because it does not indicate that the plaintiff could or is willing to file a bond sufficient to secure the defendants' damages in the event the plaintiff does not prevail on its claims. The validity of an attachment under Rule 56 depends on the validity of the plaintiff's claim against the defendant-attachee. García- Guzmán v. Villoldo, 273 F.3d 1, 6 (1st Cir.2001). If the plaintiff does not prevail on its claims against the defendant-attachee, that defendant-attachee has a claim under Article 1802 of the Puerto Rico Civil Code, P.R. LAWS ANN. tit. 31, § 5141 (1979), for the damages arising from the attachment. Id. at 6. In the usual case, Rule 56 requires a plaintiff seeking to attach a defendant's property to file a bond “sufficient to secure all the damages arising from” the attachment. P.R. LAWS ANN. tit. 32, App. III R. 56.3 (1979). On the issue of a bond, the plaintiff's motion merely states “[t]he appearing party is required an [sic] willing to post a bond, in an amount to be determined [at a hearing on the plaintiff's motion].” Given the value of the property the plaintiff wishes to attach, damages resulting from wrongful attachment would be substantial, and the Court would require the plaintiff to post a bond sufficient to satisfy such damages. The plaintiff's motion does not indicate its ability or willingness to post a bond of sufficient size.


I would be very interested if others have had experience with this issue.

Canadian Parallel Import Decision

The Canadian Supreme Court just released its decision in Euro-Excellence Inc. v. Kraft Canada Inc., link here. The appeal was allowed in an opinions by Justice Rothstein, Fish, joined by Justices Binnie and Descamps. Justice Bastarche delivered an opinion for himself and Justices LeBel and Charron favoring allowing the appeal, but the majority rejected his reasoning. Chief Justice McLaughlin and Justice Abella dissented in an opinion delivered by the latter. The case turned on how to interpret the statutory language in Canadian Copyright Act section 27(2)(e), and arose out of the efforts of an exclusive Canadian distributor (Kraft) of Cote d'Or and Toblreone chocolate bars to prohibit another distributor (Euro-Excellence) through the artifice of obtaining a copyright registration on three of the Cote d'Or labels and two of the Toblerone bars as artistic works. Suit was then brought under the Copyright Act alleging Euro for unlawful importation. Kraft won below.

Efforts by distributors of consumer good to keep prices artificially high through importation claims based on the labels are common and were defeated in the U.S. in the Quality King case, although only because the labels had been manufactured in the U.S. Had they been manufactured abroad and imported into the U.S. in violation of an exclusive distribution agreement, the outcome likely would have been to bar importation. In the Canadian case the task was different: the exclusive copyright owner had to prove that the labels would have infringed copyright had they been made in Canada by the persons who made they outside of Canada. Since this could not be proved, the distributors lost.

The various opinions have a great deal of comparative law and discussions of statutory interpretation. Readers are referred to Canadian commentators for more in depth coverage, especially Howard Knopf's blog which have a post on the opinion later today.

Tuesday, July 24, 2007

Forum Selection Clauses: The 2d Disses the 7th

Many commercial contracts have forum selection clauses, including those whose subject matter is intellectual property. In an attempt to overcome common law hostility to such clauses (based on a fear that they "ousted" courts of jurisdiction), the Supreme Court has encouraged enforcement of properly constituted and agreed-to clauses that place jurisdiction in foreign courts over the parties' disputes. (Whether those courts will agree to be so roped into the dispute is a different matter).

As concerns copyright infringement, one might think that the question the question of whether to enforce a forum selection clause in a federal court regarding an exclusively federal cause of action would be a matter of federal law, but the question is an open one, as seen in yesterday's opinion by the Second Circuit in Phillips v. Audio Active Limited. The lack of agreement doesn't end here: the courts don't agree on what standards to apply to determine whether claims may be said to be encompassed by forum selection clauses, while they routinely engage in Talmudic hairsplitting interpretations of whether particular claims are covered.

One sharp division is between the Second and the Seventh Circuits, compare Corcovado Music corp. v. Hollis Music Corp., 981 F.2d 619 (2d Cir. 1993)(Feinberg, J.) with Omron Healthcare, Inc. v. Maclaren Exports Ltd., 28 F.3d 600 (7th Cir. 1994)(Easterbrook, J.). Yesterday's Phillips decision continues the division, as well as adding to the mix a choice of law provision. (Omron
sent the case to the English High Court and assumed that court would apply U.S. law).

Phillips is a long opinion, certainly compared to Judge Easterbrook's succinct, easy-to-read Omron opinion. In brief, in Phillips, the Second Circuit held that a contract claim was covered by the forum selection clause, that a copyright infringement claim was not, and that pendent state claims were probably preempted. Plaintiff Phillips (a/k/a Peter Rock), entered into a recording contract covering two albums. The first album went off without a hitch, the second one was problematic, including his recording of 15 songs beyond what the contract required (at least as a minimum). The record label wanted to also release the (maybe extra) 15 songs, but Phillips refused, believing they were not ready yet. The label released them anyway and Phillips sued.

Defendants moved to dismiss on the basis of a forum selection clause that read: "The validity, construction, and effect of this agreement and any and all modifications hereof shall be governed by English law" -- the choice of law provision -- and "any legal proceedings that may arise out of it are to be brought in England" -- the forum selection clause. I italicized "arise out of" because court spent well over 6 pages on it, in a thoroughly unconvincing exegesis of whether there are meaningful differences between "arise out of," "arise in connection with," :arising in relation to," "arising under," and "arising from," to sample only a few. (Phillips is hardly alone in this exercise, as its citations to other opinions amply demonstrates). One purpose of the court's linguistic foray was to disagree once more with the Seventh Circuit's far simpler approach of boiling all such terminology down into a single inquiry of whether the dispute arguably depends on a construction of the agreement in which the forum selection clause is contained.

Instead, the Phillips court made the unsupported and amazing judgment that "we see no reason to presume the parties meant anything other than [Webster's Third New International Dictionary 117 (1981)] definition of the term: "to originate from a specified source." This presumption is not particular to the parties before the court; its applies to all parties. Leaving aside the utter absurdity of such an assumption, the definition is of no practical assistance, something quickly revealed by the court's failure to meaningfully employ in the case at bar. To be sure, the court states that the plaintiff's infringement claim doesn't originate from the recording contract (p.23), but the conclusion is based on deeply flawed premises. First the court framed the question as whether plaintiff's rights originated from the contract, and then answered that question in the negative. But obviously plaintiff's rights couldn't originate from the contract: he was the undisputed author of the works; the purpose of the contract was for him to assign away certain rights. On that point, defendants could claim that yes, he did, and that therefore the dispute was whether he contractually had. Whether he did in fact assign them was a merits determination. The Second Circuit though excluded entirely any claims by defendants under the contract; once it did so, obviously an infringement claim shorn of any contractual right doesn't arise under the contract and any forum selection clause in that contract doesn't apply. The court's exclusion, besides being sophistry, is also based on confusing jurisdictional analyses (where the presence of a defense cannot give rise to jurisdiction), with forum selection and arbitration clauses, where the conduct of both parties may be quite relevant. It is telling in this regard that the Phillips court rejected Omron's rejection of any principled difference between the two types of clauses.

Phillips is a disappointing opinion on many fronts. The court may well have been correct about the ultimate merits of Plaintiff's claim, but procedurally it is difficult to justify the result. Nor is my concern academic: as the court acknowledged, the result of its approach was not only to require separate proceedings in two different countries, but that so requiring "is a likely inconvenience to the parties and that they, in choosing to refer proceedings instead of claims, may have intended to bundle all claims constituting any proceeding in order to avoid fractured litigation." (p. 30). It is true that piecemeal litigation will occur anyway in arbitration disputes where one claim is held not be subject to the arbitration clause where others are, but the Phillips court's herniated analysis strikes me as leading it to protest too much.

Monday, July 23, 2007

Nude Television Anchors and Oral Settlement Agreements

Those who ever doubted Andy Warhol vastly underestimated everyone’s 15 minutes of fame when nudity is involved will take solace in the case of Catherine Bosley. In 2003, she became the noon show anchor of TV station WKBN in Youngstown Ohio. In that year, she suffered a serious lung ailment. She had earlier run three marathons (and despite open heart surgery in 1999). While recovering from her lung ailment, she and her husband went to Key West, Florida during Spring Break, a decision one can question even without hindsight. In her case though, things took an unusual turn. As explained by wikipedia:

While there, she joined in a wet T-shirt contest one night around midnight. The event was filmed, and the film of Bosley stripping and posing nude for the crowd was leaked on the Internet about 10 months later. As a result of the negative publicity, she resigned from WKBN.

She did not however shy away from the publicity and appeared across the nation on TV shows, including in in a sweeps interview by WOIO-TV in Cleveland, Ohio, conducted by Sharon Reed, who had herself generated considerable controversy when she appeared nude in a photo shot by mass nude photographer Spencer Tunick and then showed pictures of herself on the air. The interview was apparently highly regarded by the station's owners since Ms. Bosley is now employed by WOIO-TV (and has run two more marathons). Her side of the events, can be read on her website here. A July 31, 2006 debate between a Fordham University professor and Bill O’Reilly on whether Ms. Bosley should have resigned can be seen here. Mr. O'Reilly attempts to distinguish his own behavior from hers.

All of this naturally leads to copyright law. When the video of her winning performance was leaked, Ms. Bosley brought an initial suit alleging violation of her right of publicity. That case was settled; part of that settlement involved assigning copyright in the video to her. She then registered her claim to copyright. Thereafter, she determined that unauthorized copies were being made, and she sued, this time for copyright infringement (along with state claims). Almost at the courthouse steps, an oral settlement was reached and the trial judge sua sponte dismissed the suit with prejudice, retaining jurisdiction for settlement purposes. Negotiations on formalizing the settlement agreement broke down; plaintiff moved to enforce the oral deal. The district judge granted the motion; defendants appealed and the Sixth Circuit recently affirmed, 2007 WL 2050655 (6th Cir. July 13, 2007). Both courts rejected defendant's claims that the negotiations were little more than preliminary (an inconsistent assertion since it was defendants who informed the court that there was no need to empanel the jury and had filed a "Notice of Settlement" with the court). Finally, the court rejected defendants' claim of fraud allegedly arising out of plaintiff's failure to disclose that she planned to go on Oprah's TV show and blab about the matter once again. (Take that Andy).

The court’s decision should be of assistance to those who find themselves in similar predicaments (the legal enforcement ones, that is).

Thursday, July 19, 2007

Twombly Pleading Fall-Out

In June, I did a post on the Supreme Court's decision in Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955 (2007), which overruled (in the way the Roberts court does these days), Conley v. Gibson, 355 U.S. 41 (1957), in particular Conley's language that "a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief," 355 U.S. at 45-46. Twombly has been raised in many cases outside of its narrow context (Section 1 of the Sherman Act), including IP case, see U2 Home Entertainment, Inc. v. Kylin TV, Inc., 2007 WL 2028108 (E.D.N.Y. 2007)(finding requisite pleading level met); Dell, Inc. v. This Old Store, 2007 WL 1958609 (S.D. Tex. 2007)(finding pleading to be insufficient); Aktieselskabet AF 21 v. Fame Jeans, Inc., 2007 WL 1655877 (D.D.C. 2007)(pleading insufficient).

Professor Scott Dodson has now made available on the Virginia Law Review In Brief a short, but helpful explanation of Twombly and where it may lead us, "Pleading Standards After Bell Atlantic Corp. v. Twombly, 93 Va. L. Rev. In Brief 121, available here, and worthy reading.

Wednesday, July 18, 2007

The Emperess Has No Clothes

The New York Post this morning ran a short article (there are only short articles in the Post) entitled "Stefani has 'No Doubt' on Forever suit." A longer article is here on E!Online. The stories discuss an infringement suit brought by singer/designer Gwen Stefani against Forever 21 over alleged copying of her "Harajuku Lovers" clothing line, a line that features a checkerboard pattern of alternating hearts and squares, with Japanese lettering and the words "Harajuku" and "Love." The lines appears to be marketed to those who have only recently outgrown the Hello Kitty franchise. (For those who think this last remark "catty," see this link).

The Post article also refers to recent efforts to enact design design protection (no typo there: I mean protection for fashion designs under the design protection regime in 17 USC chapter 13). The Post notes that current copyright law already protects original fabric designs, and this is the basis on which Ms. Stefani's company is reported to be proceeding. There have been countless other (and successful) suits over fabric designs, including of wedding dresses. There have been successful suits over belt buckles, and a famous Second Circuit opinion by Judge Leval on eyeglass designs. What need is there then for even more protection? None that I can see. The fashion industry has been knocking on the same door for over 70 years and it is well past the time, as in Kafka's story, "Before the Law," to close the door and for the supplicant to die, ignominiously.

The initiative referred to by the Post began on April 25, 2007, when Congressman Delahunt introduced (with Mr. Goodlatte, Mrs. Maloney and Mrs. Bono as co-sponsors) H.R. 2033, the "Design Piracy Prohibition Act." The bill seeks to amend chapter 13 of title 17, which currently protects vessel hull designs. Section 1301(a) currently reads:

(a) Designs protected. - (1) In general. - The designer or other owner of an original design of a useful article which makes the article attractive or distinctive in appearance to the purchasing or using public may secure the protection provided by this chapter upon complying with and subject to this chapter.
H.R. 2033 would extend this to fashion designs, defined as "the appearance as a whole of an article of apparel, including its ornamentation." "Apparel" is in turn defined as articles of men's, women's, and children's clothing, including underwear, outerwear, gloves, footwear, headgear, handbags, purses, tote bags, belts, and eyeglass frames. Do we really need or want a new federal statute that protects the overall appearance of children's underwear?

The use of the term "piracy" in the title of the bill is designed to create its own justification for the bill: pirates bad, creators good; piracy occurs, therefore we need more and more laws (in the case of H.R. 2033, including a very detailed provision on secondary liability). But true pirates will almost always violate trademark laws, and as pointed out above, copyright law has proved quite flexible enough to protect truly original designs. I don't condone piracy of fashion designs, but I object to insatiable efforts to obtain broad and unnecessary protection:

What do you still want to know, then?” asks the gatekeeper. “You are insatiable.” “Everyone strives after the law,” says the man, “so how is that in these many years no one except me has requested entry?” The gatekeeper sees that the man is already dying and, in order to reach his diminishing sense of hearing, he shouts at him, “Here no one else can gain entry, since this entrance was assigned only to you. I’m going now to close it.”

Tuesday, July 17, 2007

DRMs and Internet Radio

There have been many stories recently about the negotiations between Internet radio stations and the RIAA's SoundExchange over new royalty rates. Those negotiations - the result of the dramatic increase in rates set by the Copyright Royalty Board -- also include members of Congress. I have no views on the merits of any of the proposals or what is the right rate to be paid. One point is of interest in the negotiations and that is the possible inclusion of required DRMs (Digital Rights Management information) as a part of a reduction in fees from the CRB rate. Such a quid pro quo is referenced in a press release available here from SoundExchange, which states that the $50,000 cap mentioned in the popular press was being offered to those webcasters "who agree to provide more detailed reporting of music that they play and work to stop users from engaging in 'streamripping' - turning Internet radio performances into a digital music library." The labels brought suit against XM Satellite last year over XM's "XM+Mp3 Player." SDNY Judge Deborah Batts rejected XM's reliance on Section 1008, added in the 1992 Audio Home Recording Act, Atlantic Recording Corp. v. XM Satellite Radio,Inc., 2007 WL 136286, 81 USPQ2d 1407 (S.D.N.Y. Jan. 19, 2007). The XM+ Mp3 player permitted consumers to not only listen to XM broadcasts, but to store MP3 files consumers already possessed (lawfully or not), and to "record, retain and library individually disaggregated and indexed audio files from XM broadcast performances." XM further provided its subscribers with playlists from blocks of programming that had been disaggregated into individual tracks. In a rare stance by a very liberal judge, Judge Batts regarded XM's reliance on Section 1008 as so facially mertiless that she refused to look at the legislative history. (XM's claimed that Section 1008 offers the distributor of a Digital Audio Recording Device (DARD) "absolute immunity" from infringement).

Her decision was, however, based on "the unique circumstances of XM being both a broadcaster and a DARD distributor," and its violation of the terms of its license, 2007 WL 136186, at *8. By seeking to ty rate reduction for pure Internet Radio broadcasters to their agreement to provide the means to block at the source future products or services that capture all or part of broadcast streams, SoundExchange appears to be taking the labels' concern over such services to a new level. One could, for example, decry XM's product (and interpretation of the AHRA) while still believe that there may be legitimate future products or uses. One may also question whether such DRMs are consistent with the purposes of the AHRA.

An easy rejoinder is that what is contemplated is merely a private industry agreement, and therefore raises no public policy issues. Congress's involvement in the negotiations shows otherwise, and it should not be forgotten that it was the CRB's extraordinary rate increase that led to the specter of DRMs as leverage. In the end, the deal will be what it is; however, I do think it fair to point out that more than just money may be involved.

Monday, July 16, 2007

Statute of Anne Too Generous by Half

The 1710 UK Statute of Anne established a term of protection of 14 years for an original period of protection, followed by a 14 year renewal term. This is the same durational structure adopted in the U.S. in the 1790 Act. The length of copyright has been on an upward arc ever sense, with the current regime in the U.S. at the obscene level of life of the author plus 70 years, a term utterly divorced from the reasonable need for incentives to create.

During the briefing leading up to the U.S. Supreme Court's oral argument in the Eldred case, 537 U.S. 186 (2003), which upheld as constitutional the 1998 term extension, a fine brief by economists such as Ronald Coase and Milton Friedman was submitted. The brief concluded that the additional twenty years provided was a windfall that would lead at most to a statistically trivial incentive to create, little if any different from a perpetual term. At the same time, the economists asserted that there were significant negative social costs associated with term extension, principally in the form of increased costs for existing works whose term was extended, thus leading to an overall reduced level of innovation (e.g. prohibiting the creation of derviative works building on existing works).

The brief did not attempt, though, to set out an optimal term of protection. Last week, Rufus Pollock,who is pursuing a Ph.D in Innovation and IP at Cambrdige University and who recently accepted a three-year fellowship at Emmanuel College (also Cambridge), has made available (here, at his website) a copy of the paper doing just that. The paper is called, ""Forever Minus a Day: Some Theory and Empirics of Optimal Copyright." The reference to "forever minus a day," is to a remark attributed to the late Jack Valenti (may his Rock keep and save him). Mr. Pollock concludes that the optimal term of protection to be around 14 years, half of that possible under the two early acts mentioned above. One interesting point about his analysis is that it is based on the dramatic (and he believes permanent) fall in the costs of production as a result of the savings from digital means of production.

He does of course also discuss the difference between low costs of production and the other side of the equation, the low costs of reproduction, and this is precisely what I find interesting: in in the policy debates about digital technology, going back in my experience in Congress to 1992, digital technology was regarded as a monolithic monster poised to forever destroy copyright unless some powerful weapons (read DMCA) were put in place. Mr. Pollock's paper is unique for looking at the larger picture, i.e., that is production costs and how those costs impact on the extent of incentives required. The paper is chock-full of statistics which is likely to turn many away, but there are other papers on his site (link provided above) that may prove easier going.

Friday, July 13, 2007

State courts deciding fair use

Can fair use issues be adjudicated in state courts even though state copyright claims are preempted by 17 USC 301? Two cases show how. In Mitcham v. Board of Regents, University of Texas Systems, 670 S.W.2d 371 (Tex. App. Texarkana 1984) plaintiff sued defendant in state court for libel, the libel being that the defendant had accused the plaintiff of committing copyright infringement. The plaintiff admitted the unauthorized copying (of a third party's work) but asserted its use was a fair use, excused under 17 U.S.C.A. § 107. If the plaintiff was correct that its use was a fair use, the defendant was guilty of libel. If the plaintiff was wrong that its use was a fair use, the plaintiff's claim for libel failed. The fair use claim was rejected due to wholesale copying, a dubious decision under the facts (student protests).

Another, quite recent case, is Zellner v. Cedarburg School District, 83 USPQ2d 1085 (Wisconsin Supreme Court 2007), available here. In Zellner, plaintiff was a high school science teacher who was fired for allegedly viewing on his school computer adult pornographic images, obtained off the web. At a subsequent meeting to discuss his termination, he was presented with a CD containing the images he had viewed. The Milwaukee Journal Sentinel newspaper requested a copy of the CD under the state Open Records Law. (Wisc. Stat. sec. 19.32(2)). That law contains an exception for the release of "materials to which access is limited by copyright... ." Plaintiff opposed the release of the CD by relying on the exception.

A threshold issue was whether a public employee fired for viewing adult pornography on his computer has standing to raise the exception, where the images are owned by third parties? Surprisingly to me, the Wisconsin Supreme Court said yes, he did have standing. The newspaper had sensibly argued that the purpose of the exception was to protect the rights of copyright owners, not shield public employees accused of misconduct from disclosure of information about their misconduct. The Court disagreed, holding that because the employee would be impacted adversely by the disclosure, he had standing. But his case fell on fair use grounds, the Court finding the use was a fair.

Thursday, July 12, 2007

Plain Meaning and Section 411(a)

My recent post on the Fourth Circuit and architectural works drew two commentators who challenge my plain meaning interpretation of the statute as requiring physical movement in order for the distribution right to be implicated. My interpretation is based on the fact that the statute limits the right to distribution of copies and copies is defined as a physical object; I don't know how you can distribute a physical object without moving it, but readers are pointed to that post to see the debate.

Another area in which I think the plain reading of the statute is crystal clear is Section 411(a) which requires that there be an actual issued registration or denial thereof before an infringement action may be instituted (not "maintained" as in the 1909 Act). A very very few courts, misled by Nimmer's mangling of the statute, have disagreed. The overwhelming majority of courts follow the plain meaning. Here is a new one, from the Court of Federal Claims, Jennette v. United States, 2007 WL 1771998 (Fed. Cl. June 19, 2007):

Lacking any binding authority, this court must look to the statute itself to determine its meaning. The cardinal rule in interpreting a statute is that “courts must presume that a legislature says in a statute what it means and means in a statute what is says there.” Conn. Nat'l Bank v. Germain, 503 U.S. 249, 253-54, 112 S.Ct. 1146, 117 L.Ed.2d 391 (1992). A court begins its inquiry by examining the text of the statute. Lamie v. United States Trustee, 540 U.S. 526, 534, 124 S.Ct. 1023, 157 L.Ed.2d 1024 (2004). “Unless otherwise defined, words will be interpreted as taking their ordinary, contemporary, common meaning” at the time Congress enacted the statute. Perrin v. United States, 444 U.S. 37, 42, 100 S.Ct. 311, 62 L.Ed.2d 199 (1979). When the statutory language is clear, a court's inquiry is complete. Conn. Nat'l Bank, 503 U.S. at 254, 112 S.Ct. 1146.The relevant portion of 17 U.S.C. § 411(a) provides:[N]o action for infringement of the copyright in any United States work shall be instituted until registration of the copyright claim has been made in accordance with this title. In any case, however, where the deposit, application, and fee required for registration have been delivered to the Copyright Office in proper form and registration has been refused, the applicant is entitled to institute an action for infringement if notice thereof, with a copy of the complaint, is served on the Register of Copyrights.As a condition to bringing suit, the plain language of the statute requires either the registration of the copyright or the Copyright Office's refusal to register the copyright. See La Resolana Architects, PA, 416 F.3d at 1200-01. Accordingly, the court holds that actual copyright registration, or the denial of copyright registration, is required prior to bringing suit for copyright infringement.

Wednesday, July 11, 2007

Have a Heart, but not an Infringement Claim

The Federal Circuit gets to hear copyright infringement claims when they are coupled with a patent claim. In that circumstance, they apply the law of the circuit from which the appeal was taken at the district court level. A recent case on appeal from Massachusetts, evidenced a rather expansive view on plaintiff's part for programs and information used for portable defibrillators, Hutchins v. Zoll Medical Corp., 2007 WL 1892467 (Fed. Cir. July 3, 2007). The court's discussion is succinct and worth quoting:

The Copyright Act provides protection against unauthorized copying of computer programs, defined in 17 U.S.C. § 101 as “a set of statements or instructions to be used directly or indirectly in a computer in order to bring about a certain result.” .... This definition has been applied to protect computer codes and design and text, as well as the tangible expressions such as the screen display. However, copyright protection does not extend to the methods that are performed with program guidance, as discussed by the First Circuit in Lotus Development Corp. v. Borland International, Inc., 49 F.3d 807, 818 (1st Cir.1995), aff'd 516 U.S. 233, 116 S.Ct. 804, 133 L.Ed.2d 610 (1996) (“a text describing how to operate something would not extend copyright protection to the method of operation itself; other people would be free to employ that method and to describe it in their own words”). Mr. Hutchins' Copyright No. Txu-213-859 is for the “text of computer program” for his system. The district court, applying Lotus v. Borland, ruled that Mr. Hutchins' copyright does not afford the scope of protection he seeks. The court explained that copyright does not protect the technologic process independent of the program that carries it out; that is, the copyright covers the way the process is described in the written or electronic form of the computer program, but does not cover the process independent of the copyrighted program. The district court held that Mr. Hutchins' copyright for a computer program for performing CPR in accordance with audio and visual instructions shields the software code from copying and may cover the specific audio-visual forms and text if original, but it does not cover the standard instructions for performing CPR or their independent placement in electronic form. Mr. Hutchins states that his program for performing CPR and the Zoll program for performing CPR “perform the same task in the same way, that is, by measuring heart activity and signaling the quantity and timing of CPR compressions to be performed by the rescuer.” He argues that his copyright covers the system of logic whereby CPR instructions are provided by computerized display, and that the unique logic contained in software programs is protectable subject matter under 17 U.S.C. § 101 (“A ‘computer program’ is a set of statements or instructions to be used directly or indirectly in a computer in order to bring about a certain result.”) The district court correctly distinguished the specific computer program and its expression, which are the province of copyright law, from the technologic method of treating victims by using CPR and instructing how to use CPR. The court correctly held that Mr. Hutchins' copyright is limited to preventing the copying of the specific computer program that he developed, and does not include coverage of all programs that guide the performance of CPR derived from information in the public domain. See Lotus v. Borland, 49 F.3d at 818 (methods of operation are not copyrightable, although a specific program that implements the method can be protected against copying). It was not established that Mr. Hutchins' specific computer program, or any original aspects of his display in audio or video, was copied. We affirm the ruling that this copyright is not infringed. Mr. Hutchins' Copyright No. TXu-210-208 is for a “Script & Word List” of words and phrases used in his CPR-guidance system. The district court held that the Zoll CPR guidance system did not infringe this copyright. ... It is axiomatic that copyright law denies protection to “fragmentary words and phrases” and to “forms of expression dictated solely at functional considerations” on the grounds that these materials do not exhibit the minimal level of creativity necessary to warrant copyright protection; 37 C.F.R. § 202.1(a)). Mr. Hutchins' charge of infringement relates to Zoll's use of words and phrases that are included on his copyrighted List. Both the Hutchins and the Zoll systems guide the rescuer through the CPR process by way of a series of computer-generated instructions presented in words and phrases. Mr. Hutchins asserts that Zoll's system uses twenty-seven phrases from the copyrighted list. The district court found that Zoll's instructions contain two phrases that are identical to those on Hutchins' list, viz., “call for help” and “check breathing.” The court found that three more phrases are similar, viz., Hutchins' “stay calm” (Zoll's “remain calm”); “if no pulse, start CPR” (“if no pulse, continue”); and “give two breaths” (“start with two breaths”). However, the court concluded that these phrases are entirely functional, that they are not original with Hutchins but are standard CPR instructions, and that they are not subject to copyright. Copyright does not protect individual words and “fragmentary” phrases when removed from their form of presentation and compilation. Although the compilation of public information may be subject to copyright in the form in which it is presented, the copyright does not bar use by others of the information in the compilation. See Feist, 499 U.S. at 348-49 (no matter how much original authorship is embodied, the facts and ideas are not barred from use by others). The district court found that the words and phrases on Mr. Hutchins' “Script and Word List” are standard CPR instructions devoid of “creative expression that somehow transcend the functional core of the directions... ."

Monday, July 09, 2007

Sex, Second Life, and Copyright

Copyright infringement has come to Second Life, and it is not surprising that it involves sex.
Kevin Alderman (a/k/a "Stroker Serpetine") owns Eros LLC, which markets SexGen bed, a piece of virtual furniture that allows Second Life users to simulate over 150 sex acts, a veritable Second Life Kama Sutra. The bed retails sells for $46. Alderman claims that "Volkov Catteneo" (the suit names the avatar as a John Doe) copied the SexGen bed and is selling it on Second Life. after first reporting the problem to Linden Labs. Alderman is reported to be planning to subpoena Linden Lab and PayPal to in order to discover Catteneo's identity and financial documents. Catteneo is told Reuters that "I am not some kind of 'noob'. My name is not on file. I do not even have a permanent address either," he said. (See this article in Wired).

There are no special rules for infringement on Second Life, and to me it resembles suits over video games. I would be skeptical if the argument that a virtual piece of furniture is, for copyright purposes, a useful article, anymore than similar depictions on video games.

Avril Lavigne: I Wanna be Your Defendant?

My favorite celeb gossip site,, has been carrying stories about claims that singer Avril Lavigne's song "Girlfriend" infringes the famous song "I Wanna be Your Boyfriend" by the equally famous Rubinoos. Here is a link to Avril's song. Here is a link to the Rubinoos' song. I think most if not all copyright layers would have a strong opinion about the claim, but Ms. Lavigne doth protest, as seen in this letter that TMZ has posted as from her:

"You may have heard some news that two guys who wrote for some band from the 1970s I have never in my life heard of called the "Rubinoos" are trying to sue me. They have a song called "I Want To Be Your Boyfriend" that has no musical similarities to the song "Girlfriend" that Luke Gottwald and I wrote together. They claim that a small part of the lyrics are the same and are saying that I took these from them. I had never heard this song in my life and their claim is based on 5 words! All songs share similar lyrics and emotions. As humans we speak one language.

Off the top of my head, two other songs that I can immediately think of with this type of lyric are "Hey, hey, you, you get off of my cloud" by the Rolling Stones and "Hey little girl I want to be your boyfriend" by the Ramones. Simply put, I have been falsely accused of ripping their song off. Luke and I have done nothing wrong and there is no merit to their claim."

Friday, July 06, 2007

The Fourth Circuit Eats Breakfast Again

Back in February, I did a post on a Fourth Circuit opinion involving infringement of an architectural work, Christopher Phelps & Associates, LLC v. Galloway, 477 F.3d 128 (4th Cir. Feb. 12, 2007). I was critical of a few parts of the opinion, but I struggled to get the facts right and the post, I think, never quite came out right. The Fourth Circuit apparently had some reservations about its own opinion, since yesterday, in response to a petition for rehearing, it issued a new opinion that contains a number of changes from the original, 2007 WL 1933594. (HT to LKB).

Much of the discussion in the original post, and in the comments on it turned on the issue of whether the sale of an infringing house constituted a distribution, and the issue of the first sale doctrine. These were of interest because while the jury found defendant had infringed plaintiff's architectural work in building his dream house based on an unauthorized copy of plaintiff's plans, the jury awarded only $20,000 (the fee plaintiff would have charged for an authorized use), and the trial judge had refused plaintiff's request for a permanent injunction against the lease or sale of the house. My view was, and remains, that sale of an infringing house is not a distribution within the meaning of 17 USC 106(3), since only title to the infringing object is transferred, and not a transfer of a copy of the work: the plain language of the statute requires that there be a transfer of a copy of the work, and copy is defined as the physical manifestation.

In its new opinion, the Fourth Circuit acknowledges this argument, but skirts around it by subsuming it within a general discussion of entitlement to injunctive relief. I don't understand that approach: if what plaintiff is requesting is relief for a right not granted under the Act, there is no need to go through a full-blown analysis of entitlement to equitable relief. The court's oblique reference to the problem is unsatisfactory: "We agree with Phelps & Associates that Galloway will inevitably sell or transfer his house within the period during which Phelps & Associates still holds the copyright -- i.e. 95 years, see 17 U.S.C. Sesc. 302(c) -- and that such a sale could, absent this action, expose Galloway to further relief, see id. sec. 106(3); id. sec. 501(a); cf. if. sec. 109(a) permitting sale of 'lawfully' made' copies); 1 William F. Patry. Patry on Copyright, sec. 3.111 (2007)(arguing that sale fo a copyrighted structure is not a 'distribution' under section 106(3)." The references are unsatisfactory in my opinion because they acknowledge the problems, but don't address them.

No where is this more true than in the first sale issue. The prior opinion held, in a first, that when an award for infringement is satisfied, the infringing copy becomes a lawful copy, and therefore may be transferred without the copyright owner's permission. This holding is absent from the new opinion, but the same result is achieved but now without any basis in law at all:

[W]ith respect to the Galloway house as one manifestation of the Phelps & Associates' design, arising from a single infringing transaction, Phelps & Associates is limited to the other relief provided in this case. Upon satisfaction of that relief, Galloway will be entitled to peaceful ownership of the house, with good and marketable title. This is consistent with the result reached when a converter of property satisfies a judgment: if the judgment does not order return of the property, but rather other relief, the converter obtains good and marketable title to the property after satisfying the judgment. See Restatement (Second) of Torts § 222A, cmt. (c) (“When the defendant satisfies the judgment in the action for conversion, title to the chattel passes to him, so that he is in effect required to buy it at a forced judicial sale”); Lovejoy v. Murray, 70 U.S. (3 Wall.) 1, 16-17 (1866); Stirling v. Garritee, 18 Md. 468, 474 (1862) (“The measure of damages in trover, is the value of the goods at the time of conversion. The plaintiff obtaining this value, it operates as a transfer of title from the time of conversion”). The same policies of promoting clear property rights and finality apply in the case of copyright actions involving single copies of completed structures. Indeed, they are perhaps stronger, as we are promoting the alienability of real property.

There is no more precedent or support for this approach than there was for the prior opinion's first sale approach, and the danger to other forms of subject matter is just as great. The court could have easily reached the result it wanted -- permitting Galloway to sell his house in the future, by following the plain words of the statute in the distribution question: because it is not a violation of the Copyright Act to transfer title to an infringing architectural work, Galloway is free to do so. In the end, then, the new opinion, is the old breakfast served up again.

Monday, July 02, 2007

I Was a maid In a Porno Store II

Back in March, I did a post about a suit filed by Carol Burnett over Fox's evocation of her "Charwoman" character on the TV show "Family Guy." The wheels of justice have moved very swiftly indeed, with a June 4th opinion, granting a rare FRCP 12(b)(6) motion to dismiss for failure to state a claim on fair use grounds, Burnett v. Twentieth Century Fox Film Corporation, 2007 WL 1662343 (C.D. Cal. June 4, 2007). For those unfamiliar with the protagonists, here is a brief summary by the court:

Family Guy is a half-hour, animated, comedy television program broadcast on primetime and geared toward an adult audience. The show borrows heavily from popular culture, following the exploits of the Griffin family and friends in the fictional suburb of Quahog, Rhode Island. Family Guy routinely puts cartoon versions of celebrities in awkward, ridiculous, and absurd situations in order to lampoon and parody those public figures and to poke fun at society's general fascination with celebrity and pop culture. On or about April 23, 2006, Fox aired an episode of “Family Guy” entitled “Peterotica.” Near the beginning of the episode, the Griffin family patriarch, Peter Griffin, an “Archie Bunker”-like character, enters a porn shop with his friends. Upon entering, Peter remarks that the porn shop is cleaner than he expected. One of Peter's friends explains that “Carol Burnett works part time as a janitor.” The screen then switches for less than five seconds to an animated figure resembling the “Charwoman” from the Carol Burnett Show, mopping the floor next to seven “blow-up dolls,” a rack of “XXX” movies, and a curtained room with a sign above it reading “Video Booths.” As the “Charwoman” mops, a “slightly altered version of Carol's Theme from The Carol Burnett Show is playing.”
Judge Pregerson's discussion of the first factor and parody is instructive:

In their opposition to the motion to dismiss, plaintiffs argue that Family Guy's use of the Charwoman in the Peterotica episode “does not constitute parody in the strict legal sense” and thus cannot be considered “transformative.” In support of this argument, plaintiffs assert that the target of the Family Guy parody was not the Charwoman character as such, but Carol Burnett herself. In fact, the Family Guy characters explain that the porn shop is clean because “Carol Burnett works part-time as a janitor” and make reference to Carol Burnett's signature ear tug. Plaintiffs point out that the Charwoman never tugged her ear in The Carol Burnett Show; rather, Carol Burnett playing herself tugged at her ear in the closing segment of the show as a salute to her grandmother. Furthermore, plaintiffs assert that the act of placing the Charwoman in the role of a janitor in an erotic store is neither “absurd” nor “transformative” because “one could easily imagine a charwoman cleaning the floor of a porn shop.” Secondarily, plaintiffs argue that a comparison of the Family Guy's Charwoman and Burnett's Charwoman demonstrates that the Family Guy version is virtually a literal copy of Burnett's, which is another indication that the use of the Charwoman is not “sufficiently transformative.” In sum, the crux of plaintiffs' argument is that the target of the “Family Guy's crude joke” appears to be Burnett, her family, and her wholesome image as opposed to the Charwoman. However, as the Supreme Court has pointed out, the correct inquiry is not whether the use of the material constitutes parody in a “strict legal sense.” Rather, the “threshold question when fair use is raised in defense of parody is whether a parodic character may reasonably be perceived” and “[w]hether ... parody is in good taste or bad taste does not and should not matter to fair use.” ... As defendant correctly notes, it is immaterial whether the target of Family Guy's “crude joke” was Burnett, the Carol Burnett Show, the Charwoman, Carol's Theme Music or all four. The eighteen-second clip of the animated figure resembling the “Charwoman,” mopping the floor next to “blow-up dolls,” a rack of “XXX” movies, and “video booths” in a porn shop is clearly designed to “imitate[ ] the characteristic style of an author or a work for comic effort or ridicule,” and is executed in such a manner that “the characteristic turns of thought and phrase or class of authors are imitated in such a way as to make them appear ridiculous.”. Criticism of figures as universally recognized as Carol Burnett “will not always be reasoned or moderate,” and may come in the form of “ ‘vehement, caustic, and sometimes unpleasantly sharp attacks.” ... Here, Family Guy put a cartoon version of Carol Burnett/the Charwoman in an awkward, ridiculous, crude, and absurd situation in order to lampoon and parody her as a public figure. Therefore, the Court finds that a parodic character may reasonably be perceived in the Family Guy's use of the Charwoman because it is a “literary or artistic work that broadly mimics an author's characteristic style and holds it up to ridicule.” ... The episode at issue put a cartoon version of Carol Burnett/the Charwoman in an awkward, ridiculous, crude, and absurd situation in order to lampoon and parody her as a public figure. Accordingly, the Court finds this factor weighs in favor of fair use.

What I find so wholesome in these remarks are their disregard for the parody/satire dichotomy that threatened fair use in the wake of Justice Souter's distinction between the two in Campbell. Some, including I believe Professor Rebecca Tushnet, have cautioned that Justice Souter did not mean to create a binary world - one in which parody has a leg up and satire has an uphill battle - and this decision as well as a few earlier ones are of great help. The court's discussion of the remaining factors is also excellent). Bravo, Judge Pregerson.