The Patry Copyright Blog

The Singaporean Cablevision Case

2010-03-23T23:23:00.002-04:00

Many countries around the world are wrestling with similar, evolving copyright issues in response to new digital technologies. In facing common issues, courts sometimes share insights, but when they do, it's critical that they recognize the full procedural context of a decision from another country, as well as specific substantive legal elements. A recent opinion in Singapore regarding remote storage DVRs shows this danger. Although the facts are complicated given the change in the system in question over time, at bottom the Singaporean litigation – against RecordTV – is for most purposes the same case as the remote storage DVR dispute, Cartoon Network v. Cablevision, decided by the Second Circuit, and in favor of the defendant, Cablevision.

In reading the Singaporean judgment below – a very comprehensive one by Justice Ang -- one gets to the end expecting the same result as in the Second Circuit, only to find judgment for plaintiff. Hopefully, the High Court will reverse. The disparity between the trial court’s findings of fact and its conclusions of law, as well as a misreading of Judge Walker’s opinion in Cablevision, are responsible for much of the disconnect. The principal misreading was based on the posture of Cablevision: a direct infringement suit against Cablevision, rather than as inRecordTV, a secondary liability suit. This posture was the result of the plaintiff’s fear – justifiably – that they would have lost on a secondary liability claim because of the Supreme Court’s Sony opinion: users of Remote Storage DVRs are engaging in fair use, and just like VCR manufacturers, those supplying Remote Storage DVRs are supplying a staple article of commerce that has substantial non-infringing uses. Plaintiffs claiming otherwise bear the burden of proving infringement.

Nothing in the Second Circuit’s opinion is contrary the conclusion that on the facts, a claim of contributory infringement would have failed; indeed, during oral argument it was quite clear to me the court of appeals would have held for Cablevision had the case been brought as a secondary liability case. Judge Ang thought to the contrary, and he was in this regard, I respectfully submit mistaken. He certainly was mistaken as a matter of Singaporean fair use law, given the statutory provision permitting consumers to make “a cinematographic film of [a] broadcast or cable programme for . . . private and domestic use.”

One could understand Judge Ang’s opinion if he had found that RecordTV and not consumers make the copy, but he didn’t: he agreed with the Second Circuit that users, not RecordTV make the copies. Yet, Judge Ang found RecordTV liable for “authorizing” infringements by the users. Authorizing a fair use cannot form the basis for a finding of contributory infringement since there must be a primary infringement to contribute to. Perhaps the court was influenced by the number of people who can access the service, a possibility that is heightened by its finding that RecordTV was engaging in a public performance. However, two million private performances do not make one public performance, no more than gathering together in an unoriginal way two million uncopyrighted facts results in a copyrighted compilation, as we learned from the Feist opinion. A stream that can be seen only by one viewer is a private performance, else the very distinction between public and private would be erased.

My new blog

2009-08-06T22:34:00.002-04:00

I launched a new blog today, called Moral Panics and the Copyright Wars. Here's the link. The blog is based on a book I just published of the same title, available here and here.

Rocky Mountain Ratings

2009-07-18T14:41:00.002-04:00

A recent decision by a district court in Colorado, Health Grades, Inc., v. Robert Wood Johnson University Hospital, Inc. (HT to Eric Goldman and Mike Masnick at Techdirt) raises once again courts’ confusion over foundational holdings by the Supreme Court in its 1991 Feist compilation opinion, confusion that has resulted in inappropriate extension of copyright to facts, prices, and ratings. In the Colorado case, the opinion was on a Rule 12(b)(6) motion to dismiss, meaning that there has been no decision on the merits of the protectibility of the material in question, and also meaning that there can be no present appeal.

The Colorado case is hardly the first time a ratings company has sought to stop another company from publicizing a favorable review. An early, pre-Feist opinion, Consumers Union of United States, Inc. v. General Signal Corp., 724 F.2d 1044 (2d Cir. 1983), vacated a preliminary injunction against a vacuum manufacturer which quoted accurately from plaintiff’s review. Here are the quotations used:

-“Regina Powerteam-far ahead of the pack in cleaning ability.”

-Of all the lightweights tested “only one worked well.”

-On medium pile carpeting Powerteam “did the job with the least effort.”

-In fact, it's the only one Consumer Reports calls an “adequate substitute for a full-sized vacuum.”

On appeal, the Second Circuit observed, “In truth, CU is not really objecting to Regina's copying CU's expression. The statement of policy in its magazine and its position in its brief before us is that any mention of CU in commercial advertising will diminish its effectiveness as an unbiased evaluator of products.” Based on this, it is not surprising the court of appeals vacated the injunction, but it did not examine what was copyrightable in plaintiff’s work, probably because the quotations were from an article. The copying was de minimis at best, but the decision rested on fair use.

The facts in the Colorado case were described this way by Judge Kane:

“Health Grades is a Delaware corporation based in Golden, Colorado. It is in the business of developing and distributing objective ratings of hospitals, physicians and other healthcare providers. Its “1-3-5 Star” ratings and provider awards are based on data and information obtained from a variety of sources, most of which are publicly available. Health Grades determines its ratings and awards for individual providers by analyzing these data using its own proprietary methodologies. Health Grades publishes its ratings and awards for healthcare providers, along with other information, on its website.”

“Members of the public may access and view the ratings, awards and other information on Health Grades’ website by executing a “click-through” Limited License and User Agreement (Limited License) set out on the website. The Limited License grants “a personal, revocable,

nonexclusive, non-transferable license to access and view this Site and the Site Materials, and to copy, download, store and/or print only a single copy of any Site Materials, solely for your non-commercial use and not for resale or distribution to anyone else.”

“RWJ is a hospital located in Hamilton, New Jersey. From 2004 through 2006, RWJ, through its authorized employees, accessed the Health Grades website more than 200 times after entering into the required Limited License. RWJ then proceeded to use materials from the

Health Grades’ website, specifically including Health Grades’ name and the ratings and awards it had given RWJ, in at least nine press releases and articles promoting the hospital and/or its services. Health Grades’ name and its ratings of and awards to RWJ were also published on the

RWJ Hamilton website. RWJ did not have permission from Health Grades to use its name, ratings or awards in this manner. “

In rejecting defendant’s argument that the ratings are facts, and therefore unprotectible, the court held:

“According to its complaint, Health Grades’ healthcare ratings for RWJ and other medical providers are a product of Health Grades’ collection of data and information from a variety of sources, which it then analyzes and weighs using its own proprietary methodologies to produce a Health Grades’ rating of 1, 3 or 5 stars and/or awards for each healthcare provider reviewed. These ratings and awards are not, therefore, facts “discovered” by Health Grades in the manner described in Feist, but rather are expressions created by Health Grades. These ratings only exist because Health Grades has selected, weighed and arranged facts it has discovered to present the collected data in a form, Health Grades’ ratings and awards for specific health care providers, that can be used more effectively by the reader to make judgments about providers. Taking Health Grades’ allegations as true, therefore, its healthcare provider ratings are independent creations by Health Grades and display at least the minimal degree of creativity necessary to be deemed original expressions.”

The court confused Feist’s holding that an original selection, coordination, or arrangement of facts is protectable as a compilation, with protection for the facts themselves. Originality will always be the result of judgment, artistic, or otherwise, but not all exercises of judgment are copyrightable. The judgment that this is the best route to go home is no more protectible than a judgment about what a fair price is for a coin, a car, a commodities futures contract, or how many stars a hospital deserves.

To be fair to Judge Kane, he relied on an opinion by the great judge Pierre Leval in CCC Information Services, Inc. v. Maclean Hunter Market Reports, Inc. , 44 F.3d 61 (2d Cir. 1994). CCC Information Services proves that even the great have not so great days, and Judge Leval would, I believe, agree that the opinion was not successful. In reversing a district court opinion that had found that the Red Book was unoriginal, the court of appeals held:

The district court was simply mistaken in its conclusion that the Red Book valuations were, like the telephone numbers in Feist, pre-existing facts that had merely been discovered by the Red Book editors. To the contrary, Maclean' s evidence demonstrated without rebuttal that its valuations were neither reports of historical prices nor mechanical derivations of historical prices or other data. Rather, they represented predictions by the Red Book editors of future prices estimated to cover specified geographic regions. According to Maclean's evidence, these predictions were based not only on a multitude of data sources, but also on professional judgment and expertise. The testimony of one of Maclean' s deposition witnesses indicated that fifteen considerations are weighed; among the considerations, for example, is a prediction as to how traditional competitor vehicles, as defined by Maclean, will fare against one another in the marketplace in the coming period. The valuations themselves are original creations of Maclean.

In the end, however, the decision properly turned on the originality of the Red Book as a compilation—and therefore an infringement—of the compilation authorship, and thus the court's discussion of valuations as individually protectible is dictum. The dictum is erroneous. Judge Leval' s basic point—that valuations are constructed not discovered—is true enough, but not determinative. Protection is not based on one being merely the originator of the material in question: If that were true, protection could be granted to ideas, methods of operation, systems, and the like. Instead, to be an “original work of authorship,” the material must also (1) not be de minimis, and (2) not be an idea, method of operation, or the like. Prices fail on both counts, as the Copyright Office observed in Examining Division, Literary Online Practices, Chapter 20. C.II. D.3.d (2003): “Prices are not generally considered copyrightable because the determination of prices is considered a business decision and thus they represent facts”). The Office also later criticized CCC Information Services in a May 25, 2005 “Statement of Interest of the Register of Copyrights” submitted in New York Mercantile Exchange, Inc. v. IntercontinentalExchange, Inc., 389 F. Supp. 2d 527 (S.D. N.Y. 2005), where the court held: “The argument that NYMEX settlement prices do not embody facts is without merit. The numerical settlement price that arises from NYMEX' s judgment and discretion rejects no more than pure fact or idea of the present price of a futures contract. Regardless of the judgment and creativity involved in determining each NYMEX settlement price, there is plainly only one settlement price . . . Moreover, because NYMEX's settlement prices are the actual prices and are the only way to express the idea of a settlement price stated in numbers—the expression of the price is therefore not sufficiently distinct from the idea of the price to warrant copyrighted protection.”). See also Miracle Blade, LLC. v. Ebrands Commerce Group, LLC., 207 F. Supp. 2d 1136, 1150–1151 (D. Nev. 2002) (“Plaintiff's allegations that defendant copied plaintiff’s price should also not be considered since price is a non-copied plaintiff’s price should also not be considered since price is a non-copyrightable fact.”); Project Development Group, Inc. v. O.H. Materials Corp., 766 F. Supp. 1348, 1354 (W.D. Pa. 1991), aff’d, 993 F.2d 225 (3d Cir. 1993) (“The quantities estimated and prices selected, by nature of the estimate and bid process, do not possess the requisite originality under the copyright laws.”).

Judge Kane also relied on a 9^th Circuit opinion, CDN Inc. v. Kapes, 197 F.3d 1256 (9 Cir. 1999), which confusingly stated the question presented as follows:

Whether CDN's selection and arrangement of the price lists is sufficiently original to merit protection is not at issue here. CDN does not allege that Kapes copied the entire lists, as the alleged infringer had in Feist. Rather, the issue in this case is whether the prices themselves are sufficiently original as compilations to sustain a copyright.

This passage is hopelessly contradictory. The first sentence seems to indicate the court was not evaluating the work as a compilation, a conclusion heightened by the reference to “the prices themselves.” This view is undercut by the Court's final statement of the issue as whether there is sufficient originality as a compilation. Later in the opinion, the court states that “the prices listed are not mere listings of actual prices paid; rather they are CDN's best estimate of the fair value of that coin,” but in the next paragraph the court stated “Our holding that the prices are copyrightable is consistent with . . . CCC

Judge Kane’s holding on the contract claim is worth a separate discussion; while he found the claim preempted under the Copyright Act, he held that a contract claim might not be preempted based on a promise not violate trademark law. One can appreciate plaintiff being irked by defendant’s use of its rating, but the Copyright Act should not be abused to stop what is, even according to Judge Kane, a preempted contract claim.

My "new" fair use book

2009-06-08T10:40:00.004-04:00

West Publishing just put out a "new" treatise of mine on fair use in copyright. Here is a link to buy it ($200, free shipping!). "New" is in quotes because the book goes back to 1985, when BNA published the first edition. The book got off to a good start: the week after it was published the Supreme Court cited it in its Harper & Row, Publishers v. Nation Enterprises opinion, the case about the Nation magazine's unauthorized publication of excerpts from former President Gerald Ford's memoirs before those memoirs were published. The Court later cited it in the 2 Live Crew parody case, as have lots of lower courts. In 1995 a second edition was published. But the book languished beginning in the late 1990s and went out of print. I discovered it was out of print in a funny way: I was asked for two copies of it by an erstwhile client. I called up BNA and asked for the copies. They said they doubted they had them because the book was out of print and they had destroyed all the copies. This was news to me, but at least all rights reverted to me. (This didn't include, btw, the electronic files which were on a funky proprietary system).

In my contract for the book with West, the problem of not notifying the author when the book goes out of print is well taken care of: under the rights given to West for the "new" book, the book can't ever go out of print even if West decides never to publish another copy and pulls it off of Westlaw. Gone, apparently, are the days when authors had their copyrights revert when the book goes out of print, but let's thank our stars for the termination rights in Section 304.

Anyway, to continue the saga of the out of print fair use book. In 2007, West published the 7 volume, 6,000 page general treatise on copyright I wrote. Given that the fair use treatise was out of date, I folded into that general book most of the old fair use treatise as Chapter 10, revised and updated to about 500 pages. (Since I didn't have the electronic files, see above, this meant OCR'ing the hard copy and a lot of clean-up work).

I have come to think though, given the increased importance of fair use, and the fact that the fair chapter was lost amongst the 6,000 pages of the larger treatise, that I should spin it off into its own book again, so that's what this "new" book is. While it remains part of the 6,000 general treatise, the spin off has two new chapters not found in the general treatise. One chapter is on the early 18th century English cases from whence fair use arose, and the other chapter is on current international issues. The old English cases are both interesting and important for showing the boldness of the common law judges in forging the doctrine. I expect to expand the international chapter in the next edition given the increased importance of limitations and exceptions and the debates about the three-step test.

The book will be updated once a year and will be reissued every year as a new soft copy to avoid those ultra-annoying pocket parts as well as loose-leaf inserts.

Barbara Ringer

2009-04-09T13:32:00.002-04:00

Former Register of Copyrights Barbara Ringer died this morning at 83. A very private person, there will be no ceremony. It is impossible to overstate Barbara's contributions to U.S. copyright law, including her highly distinguished service as Register of Copyrights from 1973-1980 and as Acting Register from 1993-1994. A career Copyright Office lawyer, she worked with the legends of the Office, including Abraham Kaminstein and Arthur Fisher. Her knowledge of both U.S. and international copyright law was breathtaking and unsurpassed, making me look like a pisher. There was no one who knew more about arcana, such as renewal, the manufacturing clause, and conceptual separability. The regulations, which she and then General Counsel Jon Baumgarten drafted on passage of the 1976 Act to implement that Act involved a herculean effort, and it was hardly the only one going on at the time: an 1,100 page report to Congress performance rights was also being prepared and was issued in June 1978. But she was also a big picture person, with moving law U.S. so that we could eventually join the Berne Convention as a top goal, one widely shared within the Copyright Office; she assisted with that effort even after leaving the Office.

Its not that things came easy for her; they didn't. Barbara had to sue to get her position as Register. But Barbara had personal and political skills that could meld together the contentious factions that threatened to tear apart every compromise in the 20 year road to passage of the 1976 Act. Her influence with the Congressional committees was unrivalled, especially in the House of Representatives, where Chairman Robert Kastenmeier had a warm, trusting relationship with her, a relationship made possible by Barbara's impeccable integrity, her concern that every voice be heard, her refusal to let an injustice be done but her pragmatic willingness to take less than what she might want for the greater good. She also was not afraid to speak her mind, especially on behalf of authors, the real authors. While one hears, constantly, corporate chieftains claiming that they're out there fighting for the creators, we all know that is b.s.: the creators are merely an expense item on a balance sheet, to be reduced as much as possible. We also hear politicians make similar paeans to creators, yet when was the last piece of legislation that was passed that benefited creators at the expense of corporations? When was the last time you heard a government official suggest such a thing?

Barbara did. In what is, I believe, the most arcane copyright case the Supreme Court has heard, Mills Music, Inc. v. Snyder, 469 U.S. 153 (1985), the Court, in a 5-4 decision, rules against the songwriter in favor of the music publisher in interpreting Section 304(c)(6)(A). In brief, the question was who receives the royalties from exploitation of a derivative work prepared during the term of the grant, after termination? It was clear that during the term of the grant, the songwriter received royalties according to his or her contract with the music publisher. But what after the songwriter terminated the music publisher's contract? Did the songwriter receive 100% of post-termination royalties, or, would the songwriter continue to receive royalties according to the contract? (The derivative work, in that case a sound recording of the song, could be exploited post-termination because the statute says so). The Second Circuit, per the great Judge James Oakes held for the songwriter, but the Supreme Court reversed.

Barbara was outraged, and testified before the Senate about the Court's error and the injustice it worked to authors. About music publishers, she said that had not bargained for the post-termination windfall and had done nothing to deserve it. We shall not see the likes of Barbara again; farewell.

In Memoriam Sir Hugh Laddie

2008-11-30T23:20:00.002-05:00

Baruch dyan ha-emet. “Blessed is the Judge of Truth,” is an expression uttered when one hears news of a terrible loss, especially death. It is the expression I used when I heard of the death of Sir Hugh Laddie, zikhrono livrakha.

Sir Hugh was buried today in London. He was born in 1946. His mother is, I believe still alive at the age of 91. Though he didn’t learn a great deal of Yiddish, his mother was fluent in it: when her grandparents fled Russia to England, the only way to communicate with them was in Yiddish. His father died some time ago, but this last year was the first Kol Nidre he had missed, due to his health. Although Hugh did not accept the existence of a divine spirit, Kol Nidre had been for him a day of intense family bonding, and so the inability to go to it this last year was a source of regret.

When I stopped my blog, Hugh posted a comment urging me to resume. I haven’t resumed it , but the loss of my dear friend warrants a farewell.

Sir Hugh studied at Aldenham School and St Catharine's College, Cambridge. In 1980, he and his co-authors Peter Prescott and Mary Vitoria published the first edition of their landmark treatise, The Modern Law of Copyright and Design. (Last year a fourth edition was published). At the time it was seen as a quite courageous thing to do because the existing standard textbook in England - Copinger and Skone James - was taken for granted. At the time of Hugh’s treatise, there was no perceived need for anything else. Paul Torremans, reviewing the third edition in EIPR in 2001, described some of the chapters as revolutionary: they dared to have views that did not jibe with the status quo, and to express those views publicly.

After being called to the bar, Sir Hugh also performed valuable public service: in 1992 he was appointed Vice Chairman of the Copyright Tribunal, a statutory body that settles disputes between collecting societies and users of copyrighted works over royalty rates. In 1986, he was appointed a Queen’s Counsel (having been called to the bar in 1969). From 1981 to 1986, he served as a counsel for Her Majesty’s Treasury, a capacity in which he represented the British Government and the British Patent Office in all areas of Intellectual Property law litigation.

After 25 years as a successful IP barrister (during which he developed a well-deserved reputation as an expert patent and trademark lawyer too), he was appointed a Justice of the High Court in 1995, hearing cases in the Chancery Division and Patents Court (which includes copyrights).

On the bench, he continued the honesty and humor that was as much a part of his personality as his searing intellect and personal warmth. Here, for example, is an excerpt from a BBC story, about a dispute between two bands:

The judge in a court case involving two groups called Blue has been demonstrating his knowledge of the finer points of the pop and rock world.

Mr Justice Hugh Laddie is in charge of the case in which pop act Blue are being sued by a 1970s rock band of the same name. The original Blue want to prevent them from using the name, saying their own career and reputation is being damaged. They are suing the contemporary boy band and their label EMI/Virgin, for up to £5m.

As proceedings began at the High Court, Mr Justice Laddie defied the image of Britain's crusty, out-of-touch judiciary with some pithy examination of counsel. The judge - known for his broad taste in music - appeared surprised when the older band's barrister said their reputation was being threatened.

"Are you seriously saying that fans of one group would mistake one for the other?" he asked Charles Purle QC.

“There is somewhat a difference of appearance. One is aged like you and me, the other is a boy band." Mr Purle said: "My clients were a boy band in the 1970s."

The judge replied: "Oh no. Boy band is a style of music that is a bit more recent than the Charleston."

He resigned in 2005, the first High Court judge to do so in 35 years. His resignation caused a furor (in British spelling "furore," signifying a great degree of sturm und drang than the shorter, more base U.S. emotion). An article in the Times Online awhile after his resignation, a few wonderful quotes from Sir Hugh:

I was at the Bar for 25 years. I had a truly stupendous time. I still think, if you’re lucky and get a good practice, it’s a great job.” But with the heavy and tiring workload — “it was the only thing my wife and I would argue about” — he had no doubt about becoming a High Court judge. “There was only one direction — down. You can’t stay at the top for ever.”

For the first five years, he enjoyed it. But aspects jarred. “One thing is that you are really isolated. You can go all day without speaking to another judge.” So he set up a common room where judges could meet weekly for teas. Laddie, who was senior judge of the Patents Court, also believed strongly that the courts should serve litigants, not the profession. “That meant I was determined to try to cut costs to a point where I used to irritate people.

“Everyone has egos — it’s a matter of how difficult you find it to control.” Laddie did not endear himself to counsel when, at the start of a case, having read the papers, he would make clear his preliminary views. “Obviously I had provisional thoughts — it would be amazing if I didn’t. Some would say: he’s made up his mind. I hadn’t, of course.”

Laddie also objected to sitting on Chancery cases beyond his expertise. Had he taken a case outside his field at the Bar, he’d have left himself open to a negligence action, he says. But the moment he was a judge he was expected to do just that. “It was challenging — like high-wire walking — but I didn’t think it fair for clients to be learning at their expense.” Most worrying were the cases involving unrepresented litigants, with applications “ in an area of law that I knew nothing about”.

Nevertheless, despite the extremely hostile reactions of some of his colleagues to his resignation, in July of this year, Sir Hugh defended the British judiciary: "They were not people who used quill pens. They're computer literate, savvy, quite ordinary, nice people and not hidebound traditionalists.”

Rather than retiring to the country and practicing his fly-fishing technique, Sir Hugh joined the IP boutique Willoughby & Partners as a consultant. In that capacity, I had the great joy to hire him in 2007 as an expert on UK law for an amicus brief I filed in a case involving Uri Geller. Plaintiff asserted that a resident of Pennsylvania who was a critic of Geller’s committed a violation of UK law by uploading an allegedly infringing video on to YouTube’s servers, from which the video was hosted for others to view. Sir Hugh wrote in his report, however, that “a finding of infringement through authorization is dependent upon there being a finding that the person who was authorized, committed an infringement of United Kingdom copyright by performing, in the United Kingdom, one of the activities set out in section 16(1).” He concluded: “It follows from this that if the primary acts of which the plaintiff complains took place outside the United Kingdom there cannot be infringement of British copyright. Alleging authorization makes no difference to this. It is not an infringement to authorize a non-infringing activity.” After I filed Sir Hugh’s report, plaintiff did not even bother to file an answer and the case was settled.

In addition to being a consultant to the Willoughby firm, Sir Hugh became Professor Laddie when, in 2006, he became a Professor of Intellectual Property Law at University College London. There he founded the Institute of Brand and Innovation Law (IBIL). He wrote me a note recently about this post:

I thought that being a Professor entailed nothing more than walking around looking sombre while talking in obscure English. Apparently there's more to it than that. There are lectures, exams, exam-marking and begging people for support funds. At least on the last issue I got some help from a friend. I had sent out a number of begging letters to various firms of lawyers and was having dinner with this friend. I told him what I had done. .. . He asked me whether I had telephoned all the people to whom I had sent a letter. I was horrified. I didn't think it was part of my job to actually phone people up and ask. He pointed out, not unreasonably, that most people do not respond to letters asking for money and that really what you have to do is to speak to them either face-to-face or on the phone so that they feel too embarrassed to refuse. … I have got quite used to it now. I have developed an extremely thick skin and, by English standards, I think I have been rather successful.

In connection with the University’s Institute of Brand and Innovation Law , in June of this year, he gave an interview on the question of piracy in China and made these remarks. (I would love to know whether they made their way to USTR):

China has become a scapegoat for the West’s intellectual property problems, a leading lawyer said today. Sir Hugh Laddie, a former High Court judge, said that although China had issues with counterfeiting and other forms of intellectual property theft, there was a “complete misconception” about the scale of the problem relative to other countries. Sir Hugh said: “Of course there is counterfeiting in China, but the same goes on in the US and Europe. Pro rata, the biggest source of pirated computer software in the world in the US.”

Sir Hugh’s courage extended to his decisions on the bench, most famously in the Arsenal case. Marty Schwimmer described Sir Hugh’s actions in the case this way,

A vendor sold scarves with the Arsenal football club name and indicia. The issue turns on whether use of a team name in such way is trademark use in that sense that the team name designates the origin of the good, or is the team name and logo merely decorative use in the sense that the wearer of the scarf is merely communicating allegiance to that team. It's my understanding that Laddie himself tends toward the latter view ... . Laddie referred the case to the ECJ. Now that the ECJ has ruled that of course it's trademark use, Laddie has refused to follow its decision, apparently relying on the fact that the ECJ made fresh findings of fact, something it had no power to do.

The court of appeals reversed him. Reversal by a higher court doesn't of course mean HL was wrong, only that he had the courage to point out the dangerous usurpation by the EU, an "Emperor Has No Clothes" statement that must have embarrassed the court of appeals. May we all emulate him. Nor did his opinion stem from antipathy toward EU rights. Quite the contrary, in his earlier, 2001 Burrell Competition Lecture, "National I.P. Rights: A Moribund anachronism in a Federal Europe," 23 E.I.P.R. 402 (2001), he concludes "Now that we are in a single market, our domestic economy is Community-wide. So should our I.P. rights be. ... I can only hope that the Community trade mark will prove such a success that users will vote with their feet and will use it to the exclusion of national rights."

In the field of copyright, two of Sir Hugh’s articles should be laminated and placed on your desk so they may be re-read often. The first is his 1995 Stephen Stewart lecture, "Copyright: Over-strength, Over-regulated, Over-rated", published in 18 European Intellectual Property Review 253 (1996). Sir Hugh began the lecture this way:

The purpose of this lecture, given in honour of the memory of a clever and perceptive copyright lawyer, is to consider the current state of copyright law in this country. Does it meet current commercial needs? My purpose this evening is to ask questions and possibly raise doubts. Copyright is one of the quartet of monopolies which form the core of what is now known as intellectual property law. The others, of course, are patents, trade marks and registered designs. I suppose that since the introduction of the unregistered design right in the 1988 legislation, there really is a quintet of such rights. Each, in its own way, places a fetter on the right of others to compete in the market-place with the originator of the right or his employer. Therefore, to some extent, each distorts trade.

If this were all, these monopolies would work against the interests of the public at large. At the simplest level it can be said that the existence of a monopoly enables the monopolist to increase his prices or restrict supply as he pleases. Of course, we know that that is much too superficial a view. It ignores all the benefits to the public at large which can flow from the increased creativity and investment which are the product of a well-balanced monopoly system. But we must always bear in mind that monopoly legislation is the end result of a balancing act: is the restraint on competition justified by the benefits which it gives to society at large? In this lecture I would like to consider this basic balancing act as it applies to copyright.

One of the areas where he felt the balance was out of whack was with the length of copyright and the low standard for originality, seen in this passage:

[A]s a result of the Term Directive, the copyright in the first category of works, that is to say, literary works and so on, is now life of the author plus 70 full years. This additional 20 years has been imposed throughout the Member States of the European Union to bring us into line with the domestic law of Germany. As is now familiar in copyright law, the process was one of leveling up the protection rather than levelling down. The result of this new term is that if, for example, a young computer programmer writes a new piece of computer software, he generates a monopoly which will normally last for over 100 years. Depending on his longevity, it may last more than 150 years. Similarly, if a politician writes letters or speeches which are of general historic interest, they also may be protected for a century or more. Indeed, if a modern-day architect were to design a new Albert Memorial, he would have the satisfaction of knowing that his copyright is likely to be sprightly and in the prime of life long after the concrete and steel of his architectural creation have started to crumble.

The question to be asked is: what justification is there for a period of monopoly of such proportions? It surely cannot be based on the principle of encouraging artistic creativity by increasing the size of the carrot. No one is going to be more inclined to write computer programs or speeches, compose music or design buildings because 50, 60 or 70 years after his death a distant relative whom he has never met might still be getting royalties. It is noticeable that this expansion of term is not something which has only occurred in the last decade. On the contrary, it has been a trend which has been in evidence for the whole of this century. Before the 1911 Act, the term of copyright in artistic works extended to seven years after the author's death. In 1911 this was extended to 50 years after death. The growth of term is in fact greater than these figures suggest. Life expectancy in 1910 was far shorter than it is now. The result is that a monopoly which was expected to last about four decades in 1910 should now be expected to last on average more than three times as long.

Indeed, I believe that the same criticism of excessive duration can be leveled at the 50-year flat term which applies to films, recordings and broadcasts. It may be possible to pick out a few creations of exceptional artistic or commercial merit where one could argue for lengthy protection - for example, the recordings of Rostropovich or the Beatles - but is it right that all copyright should be protected on the basis of what might be thought justified for the exceptional few? Furthermore, it is possible to argue that these long copyright terms are not necessary to protect the commercial exploitation of the works themselves. Most works protected by copyright are exploited very rapidly, if at all. This is so whether we are considering films and records or literary works such as computer software. Even books such as those that win the Booker prize are only commercially successful for a short time and then, to all intents and purposes, pass away. Yet the dead hand of copyright lingers on, in most cases serving no useful purpose.

Another of the problems with copyright law is that, unlike inventions protected by patent or designs protected by registration, the requirements for qualification are so low as to be virtually non-existent. Virtually any written material, any sketch and any film footage or sound recording is automatically protected. This has practical consequences. In Elanco v Mandops, the Court of Appeal accepted, as it had to, that a label of instructions placed on the side of a barrel of herbicide was a copyright literary work. No doubt depending on the youth of the literary genius who wrote it, the label will be protected for more than a century and perhaps for as long as a century and a half - certainly well beyond the date when for safety or commercial reasons the product has been removed from the market. So one of the troubles with copyright, then, is that it springs up to protect nearly every creation of the human mind, be it ever so trivial. As another member of the judiciary put it, the fact that our system of communication, teaching and entertainment does not grind to a standstill is in large part due to the fact that in most cases infringement of copyright has, historically, been ignored.

He criticized the insane criminalization of the economic tort of copyright infringement: “We have … reached the stage where taxpayers' money is being used to enforce private rights which many might think are more than adequately protected by civil remedies. I should also mention that it appears that in most cases it is not the poor and weak who are using these criminal provisions but the rich and well organised.” Importantly for the current debates around the world on air use versus fair dealing, Sir Hugh came out in favor of fair use, beginning with criticisms of the 1988 UK Copyright Act’s enumerated and lengthy list of possible fair dealings:

These detailed and pedantic exceptions to copyright protection, and their predecessors in the 1956 Act, are not only difficult to understand in some cases, but they also reinforce the perception that virtually all reproductions of copyright works, no matter how innocuous, are infringements. Is it surprising then, that when, for the purposes of advertising the film "Carry on Cleo', a poster was created which was a harmless but humorous spoof of a similar poster for the Elizabeth Taylor/Richard Burton film "Cleopatra', it was held to infringe copyright.

It would be possible to go on criticising the width of our copyright laws, but perhaps I have said enough. It might be more useful to inquire why our law has developed as it has. I have mentioned already the value and size of the industries which now believe they need extensive copyright protection to safeguard their income stream. They, quite properly, lobby for their interests. But who lobbies against them? There is no trade union of copyright infringers. Support for any limitation on copyright is easily portrayed as support for pirates - the usual pejorative global expression for infringers. It is depicted as support for the parasites of industry. Is it surprising, then, that the scope of protection gets ever wider? I suggest that the drafting of the legislation bears all the hallmarks of a complacent certainty that wider copyright protection is morally and economically justified. But is it?

Sir Hugh’s second speech, his inaugural talk as a professor at UCL, was delivered on December 4, 2007; it is entitled “The Insatiable Appetite for Intellectual Property Rights.” Alas, I do not think it has been published or is available online. In this talk, Sir Hugh noted a point deliberately obscured by the property rights rhetoric, that competition, not ownership is the natural state of affairs:

We believe in competition. It is competition which, by and large, delivers better and cheaper goods and services to the consumer. Competition is the whip
which drives traders to offer more for less to their customers. … If they don’t they will lose market share and profits to competitors who do. In our system, competition is king. It is the enemy of complacency. …

So where do IP rights fit into this? After all, they appear to undermine the very basis of our economic success. They hinder by creating areas of exclusivity. What are they supposed to deliver which justifies this subversion of the free market?

Sir Hugh’s answer was this:

The function of IP rights is to provide an economic incentive to goods and services, which, absent the would not exist or would take many more years to reach the market. They make up for a defect in the competitive system by supplying an incentive where otherwise there would be none.

This answer is orthodox, but here is how Sir Hugh ties the orthodoxy into his views on competition:

IP rights are the carrot to competition’s stick. Their purpose is not to displace competition but to modify it, to create sufficient economic incentive to justify the labour and investment in new products or art, but, after that incentive has worked its magic, to allow the normal forces of competition to have their way. … [O]nce the incentive has had its effect there is no further justification for its retention. It has done its work and competition should be allowed to return.

It is this last point that the property rights rhetoric wish to deny, but which Sir Hugh won’t allow. Sir Hugh concluded as follows:

We should be trying to hone the system so that the greatest rewards and encouragement go to
those industries which need and deserve them the most. Where IP rights perform their function of advancing the science or arts, they should be encouraged to do so. Where or to the extent that they do not, they have no justification and the normal discipline of competition should apply. The gluttony which has resulted in the growth of completely unnecessary or excessively long IP rights undermines the system itself. As Shakespeare wrote in Richard II,
--“With eager feeding food doth choke the feeder.”

We have lost a great treasure; a man whose erudition and practical experience rightly gave his views tremendous influence; a man whose honesty and candor was as rare as it is essential. Sir Hugh faced death as he did life, and we can learn from him in this too. He did not have a fear of death for himself, but instead worried about how his death would upset his beloved wife Stecia and children. Shortly his death he told me:

I am as greedy as the next man and want more of the fun and love-filled days that I have enjoyed in the past. But all these things come to an end at some time and I am not in a position to complain. I have a wonderful wife, three great children, six challenging and fun-filled grandchildren, have had a remarkably enjoyable career and have achieved more than I deserved and, last but not least, have a collection of wonderful and generous friends. What more could I ask for?

Restoring Old Posts

2008-08-08T13:03:00.003-04:00

The voice of the people has been heard. I will restore the posts, hopefully by tomorrow. This is not what I would prefer, but I respect that almost everyone else feels differently, other than those anonymous posters who were happy for the blog to go anyway. As I mentioned before, because I laboriously deleted the posts one-by-one, I needed a tool to capture the actual URLs for each post, which isn't as easy as it sounds since the URL did not always match the title of the blog. Thanks to Peter Ecklersley, who developed very cool tool to capture the URLs, and the great Blogger support team, almost all have been recaptured. They were recaptured as drafts though and there are posting limits that have to be overridden, so some work needs to be done yet. I will also try and cross reference those posts that were not captured and add them later.

Because so many people wrote asking for an archive, I will also compile an archive and send it to those who asked for it. That archive will not contains comments because the actual posts will be available for people to access. Deleting the comments from the archived posts will helpfully reduce the size of the archive, and avoid unanswered questions about the status of comments.

Thanks all of you for your kind words, and I hope restoring the links will show will my appreciation.

Archiving the Blog

2008-08-06T16:05:00.004-04:00

It may sound trite to say I am overwhelmed by the response to ending the blog, but I am. I have read all the requests to either restore old posts or create an archive of them. As much care as I gave to the posts (well, most of the time), I regarded them as ephemera. In the past I weeded out old ones I thought unsuccessful. This time, I deleted them one by one, rather than just killing the blog in its entirety since if I had killed the blog in its entirety, that would have simultaneously killed the last post announcing the end of the blog too. But because I eliminated the posts one by one, to restore them, I would have to restore them one by one, by URL, rather than by name of the post. That's way too much work for something I am not wild about anyway.

But, since so many people asked, I am doing this: I am creating a file with most of the posts (weeding out really trivial one). I will organize them by subject matter too, like registration issues, or infringement issues, architectural works, photographs, or discrete policy issues etc. I will finish in a number of days and will happily send the file to anyone who wants it. (You can email me at: williampatry@yahoo.com). I am happy if anyone wants to take the file and host it. I am also happy for anyone to copy any or all of the cached copies and do whatever they want with it. I will also revisit the issue of posting again after I have had a break and if I can figure out the answer to the problems I noted.

Thank you all very much for your comments and support. I still have my day job doing copyright, I still have the treatise which I update twice a year, and I may have a book on copyright discourse if I can find something constructive to say.

Bill

End of the Blog

2008-08-01T21:12:00.011-04:00

I have decided to end the blog, after doing around 800 postings over about 4 years. I regret closing the blog and I owe readers an explanation. There are two reasons.

1. The Inability or Refusal to Accept the Blog for What it is: A Personal Blog

I have been a full-time copyright lawyer for 26 years. My late mother, aleha ha-shalom, told me repeatedly that I had a religious obligation to learn every day, and I have honored her memory by doing exactly that. Learning also involves changing how you think about things; it doesn't only mean reinforcing the existing views you already have. In this respect, Second Circuit Judge Pierre Leval once said that the best way to know you have a mind is to change it, and I have tried to live by that wisdom too. There are positions I have taken in the past I no longer hold, and some that I continue to hold. I have tried to be honest with myself: if you are not genuinely honest with yourself, you can't learn, and if you worry about what others think of you, you will be living their version of your life and not yours.

I started the blog when I was still in private practice with the above goals in mind and one more: I felt there was no blog devoted to the geekery of copyright; meaning a blog where people who loved copyright could come and discuss copyright issues in a non-partisan way. In order to encourage open discussion I permitted not only comments but anonymous and pseudonymous comments. I did that because I wanted to encourage the largest number of people to participate, and after four years I believe that was the right decision. But it is also the right decision to end the blog. While in private practice I never had the experience of people attributing my views to my firm or to my clients. I moved from private practice to Google I put a disclaimer to the effect that the views in the blog (as in the past) were strictly mine. I also set a policy, which I strictly adhered to, of never discussing cases Google was involved in, and I refrained from criticizing those with whom Google was involved in lawsuits. I did not run ads, including not using Google's AdSense program. I cannot see what more I could have done to make what was a personal blog more separate from my employer.

For the first year after joining Google, with some exceptions, people honored the personal nature of the blog, but no longer. When other blogs or news stories refer to the blog, the inevitable opening sentence now is: "William Patry, Google's Senior Copyright Counsel said," or "Google's top copyright lawyer said... ." There is nothing I can do to stop this false implication that I am speaking on Google's behalf. And that's just those who do so because they are lazy. Others, for partisan purposes, insist on on misdescribing the blog as a Google blog, or in one case involving a think tank, darkly indicating also a la Senator Joe McCarthy, that in addition to funding from Google, there may be other sources of funding too. On Blogger, blogs are free. The blog had no funding because it doesn't cost anything, because I don't run ads, and because it was my personal blog, started before I joined Google.

On top of this there are the crazies, whom it is impossible to reason with, who do not have a life of their own and so insist on ruining the lives of others, and preferably as many as possible. I asked myself last week after having to deal with the craziest of the crazies yet, "why subject yourself to this?" I could come up with no reason why I should: My grandfather chose to be a psychiatrist, but I chose a different professional path, one that doesn't obligate me to put up with such nonsense.

In the end, I concluded that it is no longer possible for me to have a blog that will be respected for what it is, a personal blog. I don't draw any grand conclusions from this and hope others don't either. The decision was 100% mine. No one at Google ever asked, suggested, or hinted that I should end the blog. To the contrary, in keeping with Google's deep commitment to free speech, the company encourages blogs like mine, and has stood completely behind me.

2. The Current State of Copyright Law is too depressing

This leads me to my final reason for closing the blog which is independent of the first reason: my fear that the blog was becoming too negative in tone. I regard myself as a centrist. I believe very much that in proper doses copyright is essential for certain classes of works, especially commercial movies, commercial sound recordings, and commercial books, the core copyright industries. I accept that the level of proper doses will vary from person to person and that my recommended dose may be lower (or higher) than others. But in my view, and that of my cherished brother Sir Hugh Laddie, we are well past the healthy dose stage and into the serious illness stage. Much like the U.S. economy, things are getting worse, not better. Copyright law has abandoned its reason for being: to encourage learning and the creation of new works. Instead, its principal functions now are to preserve existing failed business models, to suppress new business models and technologies, and to obtain, if possible, enormous windfall profits from activity that not only causes no harm, but which is beneficial to copyright owners. Like Humpty-Dumpty, the copyright law we used to know can never be put back together again: multilateral and trade agreements have ensured that, and quite deliberately.

It is profoundly depressing, after 26 years full-time in a field I love, to be a constant voice of dissent. I have tried various ways to leaven this state of affairs with positive postings, much like television news shows that experiment with "happy features." I have blogged about great articles others have written, or highlighted scholars who have not gotten the attention they deserve; I tried to find cases, even inconsequential ones, that I can fawn over. But after awhile, this wore thin, because the most important stories are too often ones that involve initiatives that are, in my opinion, seriously harmful to the public interest. I cannot continue to be so negative, so often. Being so negative, while deserved on the merits, gives a distorted perspective of my centrist views, and is emotionally a downer.

So between the inability or refusal of some people to accept the blog for what it is -- a personal blog --- and my inability to continue to be Cassandra, I decided it was time to pull the plug. I thank profusely all those who have accepted the blog for what it is, and who have contributed so much to it and to my learning over the years. I intend to spend my free time figuring out a constructive way to talk about the difficult issues we face and how to advance toward their solution.

It was a Crime Alright but was it Pled Properly?

2008-08-01T07:33:00.005-04:00

The Sixth Circuit just handed down a case that involves unusual questions of pleading in a criminal indictment, United States v. Teh. Defendant Thian Teh was arrested at the Detroit airport after flying in to the country from Malaysia. Customs had previously seized shipments of counterfeit DVDs sent to defendant's business in Oklahoma. When his luggage was searched at the airport, Customs officials found four boxes with 756 DVDs and 284 DVD sleeve packages. The DVDs were counterfeit and of poor quality. Defendant claimed he didn't know what was in the boxes and that a friend had asked him to deliver them to the friend's daughter. There was bench trial; defendant was convicted and appealed.

Defendant was charged with "fraudulently or knowingly import[ing] ... merchandise contrary to law." He was charges with violating 18 USC 545, which pretty much states what I just quoted. But what was the law that defendant acted contrary to? Obviously the copyright act, but the government never referred to any statute other than Section 545, nor specified at any time how the proof met the contrary to law element of Section 545. This failure, the court of appeals noted, "[w]ithout question ... caused considerable confusion for Teh, the government, and the district court." The indictment did allege that the DVDs were "counterfeit" and "in violation of ... copyrights," but as defendant pointed out "a copyright is not a law."

In the end, the court of appeals confirmed the conviction, as a kind of harmless error, but there is nothing harmless in this type of counterfeiting: it is a cancer on the motion picture industry, and a quite appropriate use of government resources to stop it. Hopefully, in light of the Teh case, some of those resources will be allocated to proper drafting of indictments.
H.T. to C.E. Petit.

Educators Forced to Become MPAA's Cops

2008-07-30T23:05:00.006-04:00

On July 30th, the House and Senate conferees approved the Higher Education Act reauthorization conference report, H.R. Rep. 110-803, to H.R. 4137. The bill, expected to become law soon, includes the College Opportunity and Affordability Act. Some may recall efforts last year to condition federal aid to universities on those institutions employing filtering technology. Senate Majority leader Harry Reid would have also mandated that the Secretary of Education compile a 25 “worst offenders" list of those schools with the highest levels of illegal P2P file sharing. The idea wasn’t original, MPAA had already compiled its the top 25 list. MPAA head Dan Glickman put out this press release at the time:

Some college students are abusing powerful taxpayer funded computer networks to download and distribute movies and other copyrighted material which is why we are committed to working with universities to develop and implement plans to address this problem. We commend Senator Reid for his leadership in getting this important legislation passed through the Senate which will help encourage universities to do more.

At the time, Mr. Glickman estimated that downloading at universities cost the industry $500 million annually. Why not the Austin Powers ONE BILLION DOLLARS? Apparently members of Congress later failed to read the MPAA’s January 2008 admission that its numbers in a commissioned survey about the extent of alleged unauthorized file sharing on campus were way off, the result of alleged “human error.” But even the new number was phony and also failed to take into account the fact that most students live off campus.

This raises one of the features of Washington DC that rightly baffles those outside the Beltway: how is that a trade association gets an issue so wrong, but then still manages to get legislation passed that addresses a non-problem that the association deliberately concocted? The answer, supplied by Mr. Glickman, is: leadership.

MPAA’s initial efforts were defeated fortunately, and the history of the bill during late 2007 and early 2008 is recounted in a series of very informative posts by Anne Broache for Cnet here , here, and here. Congress, in the bill that just passed, instead of mandating filtering and bad boy lists, mandated various requirements for educators to undertake, all of which involve spouting MPAA and RIAA’s propaganda. Here are the relevant pages from the Joint Explanatory Statement of the Managers in the Conference Committee report describing the requirements:

Institutional and Financial Assistance Information for Students.

The Senate amendment and the House bill require institutions to make available to current and prospective students the institution of higher education's policies and sanctions related to copyright infringement, including a description of actions taken by the institution of higher education to detect and prevent the unauthorized distribution of copyrighted materials on the institution of higher education's technology system.

Both the Senate and the House recede with an amendment to replace language in (iv) with language requiring institutions to make available the development of plans to detect and prevent unauthorized distribution of copyrighted material on the institution of higher education's information technology system which shall, to the extent practicable, include offering alternatives to illegal-downloading or peer-to-peer distribution of intellectual property, as determined by the institution of higher education in consultation with the Chief Technology Officer or other designated officer of the institution.

The Conferees have combined elements from both bills to require institutions to advise students about this issue and to certify that all institutions have plans to combat and reduce illegal peer to peer file sharing.

Experience shows that a technology-based deterrent can be an effective element of an overall solution to combat copyright infringement, when used in combination with other internal and external solutions to educate users and enforce institutional policies.

Effective technology-based deterrents are currently available to institutions of higher education through a number of vendors. These approaches may provide an institution with the ability to choose which one best meets its needs, depending on that institution's own unique characteristics, such as cost and scale. These include bandwidth shaping, traffic monitoring to identify the largest bandwidth users, a vigorous program of accepting and responding to Digital Millennium Copyright Act (DMCA) notices, and a variety of commercial products designed to reduce or block illegal file sharing.

Rapid advances in information technology mean that new products and techniques are continually emerging. Technologies that are promising today may be obsolete a year from now and new products that are not even on the drawing board may, at some point in the not too distant future, prove highly effective. The Conferees intend that this Section be interpreted to be technology neutral and not imply that any particular technology measures are favored or required for inclusion in an institution's plans. The Conferees intend for each institution to retain the authority to determine what its particular plans for compliance with this Section will be, including those that prohibit content monitoring. The Conferees recognize that there is a broad range of possibilities that exist for institutions to consider in developing plans for purposes of complying with this Section.

Numerous institutions are utilizing various technology based deterrent in their efforts to combat copyright infringement on their campuses. According to a report of the Joint Committee of the Higher Education and Entertainment Communities, many institutions of higher education have taken significant steps to deal with the problem. Indiana University, for example, hosts an extensive "Are you legal?" educational campaign for students on the issues, and enforces campus policies on proper use of the network. It acts on DCMA notices by disconnecting students from the network and requires tutorials and quizzes to restore service. Second offenders are blocked immediately and are sent to the Student Ethics Committee for disciplinary action.

Audible Magic's CopySense Network Appliance provides comprehensive control over Peer-to-Peer (P2P) usage on a university's network. The CopySense Appliance identifies and blocks illegal sharing of copyrighted files while allowing other legitimate P2P uses to continue. It filters copyrighted P2P content by sensing an electronic fingerprint unique to the content itself, which is very similar to the way virus filters operate.

Red Lambda's "Integrity" is a network security solution dedicated to the management of file-sharing activities via protocols like P2P, IM, IRC, and FTP. This technology is able to detect all P2P, OS file-sharing, FTP, IM, proxy use, Skype and application tunneling over HTTP, HTTPS, DNS and ICMP protocols.

The University of Maryland, College Park, severely restricts bandwidth for residential networks and block certain protocols. It designed "Project Nethics" to promote the responsible use of information technology through user education and policy enforcement. A third violation can result in eviction from the university housing system. Montgomery College in Maryland enforces an Acceptable Use Policy on its wired and wireless networks.

Additional existing technological approaches can deter illegal file sharing by automatically processing notices sent by scanning vendors then taking actions such as messaging the user via browser redirection, applying the appropriate sanction and automatically re-enable browsing after a timeout or reconnect fee is paid. Other institutions use technology to appropriately manage their campus networks by limiting and/or shaping bandwidth, such as Packeteer's packet shaping technology.

This statement, in all likelihood written by MPAA, is extraordinary in many respects, especially for its detailed endorsement of private sector products. No general principles here like the text of the bill, and that of course is one of the abuses of legislative history that Justice Scalia and others rightly complain about: the tenor of the legislative history would never have been able to pass as legislative text. But the legislative history was inserted to serve a long-term agenda: there is likely to be an effort in the next Congress to mandate these technologies. The MPAA, with figures no better than the ones they retracted, will complain about universities’ alleged failure to be MPAA’s cops, and will lobby for mandated use of technologies, along with forfeiture of federal funding for not doing so. Why not throw in a 10 year federal prison term (no parole in the federal system, btw) for the President of a University that isn’t up to snuff. Or, how about adopting Sarbanes-Oxley for university officials who will have to swear on penalty of perjury (and imprisonment) that they have fulfilled MPAA’s requirements?

Here is the relevant statutory language:

1 SEC. 488. INSTITUTIONAL AND FINANCIAL ASSISTANCE IN

2 FORMATION FOR STUDENTS.

3 (a) INFORMATION DISSEMINATION ACTIVITIES.—

4 Section 485(a) (20 U.S.C. 1092(a)) is amended—

5 (1) in paragraph (1)—

6 (A) in subparagraph (G)—

7 (i) by striking ‘‘program, and’’ and in

8 serting ‘‘program,’’; and

9 (ii) by inserting ‘‘, and (iv) any plans

10 by the institution for improving the aca

11 demic program of the institution’’ after

12 ‘‘instructional personnel’’; and

13 (B) by striking subparagraph (M) and in

14 serting the following:

15 ‘‘(M) the terms and conditions of the loans

16 that students receive under parts B, D, and

17 E;’’;

18 (C) in subparagraph (N), by striking

19 ‘‘and’’ after the semicolon;

20 (D) in subparagraph (O), by striking the

21 period and inserting a semicolon; and

22 (E) by adding at the end the following:

23 ‘‘(P) institutional policies and sanctions re

24 lated to copyright infringement, including—

25 ‘‘(i) an annual disclosure that explic

26 itly informs students that unauthorized

P96

1 distribution of copyrighted material, in

2 cluding unauthorized peer-to-peer file shar

3 ing, may subject the students to civil and

4 criminal liabilities;

5 ‘‘(ii) a summary of the penalties for

6 violation of Federal copyright laws; and

7 ‘‘(iii) a description of the institution’s

8 policies with respect to unauthorized peer

9 to-peer file sharing, including disciplinary

10 actions that are taken against students

11 who engage in unauthorized distribution of

12 copyrighted materials using the institu

13 tion’s information technology system;

...

17 SEC. 493. PROGRAM PARTICIPATION AGREEMENTS.

...

25 U.S.C. 1094(a)) is amended—

1 (i) in paragraph (23)—

2 (I) by moving subparagraph (C)

3 two ems to the left; and

4 (II) by adding at the end the fol

5 lowing:

……..

6 ‘‘(29) The institution certifies that the institu

7 tion—

8 ‘‘(A) has developed plans to effectively

9 combat the unauthorized distribution of copy

10 righted material, including through the use of a

11 variety of technology-based deterrents; and

12 ‘‘(B) will, to the extent practicable, offer

13 alternatives to illegal downloading or peer-to

14 peer distribution of intellectual property, as de

15 termined by the institution in consultation with

16 the chief technology officer or other designated

17 officer of the institution.’’.

US Government Insists on Right to Violate DMCA

2008-07-30T10:08:00.005-04:00

I previously did a posting on the US government’s successful invocation of sovereign immunity in a claim alleging copyright infringement and an anti-circumvention claim under the DMCA. The opinion in that case came from the Court of Federal Claims, a trial-level court. The decision has now been affirmed by the Federal Circuit, Blueport Company, LLC v. United States, 2008 WL 2854127 (CAFC, July 25, 2008)(No. 2007-5140), available here.

Congress abrogated the federal government’s sovereign immunity for copyright infringement in 28 USC 1498(c), but a DMCA anti-circumvention violation is not an infringement action; instead, chapter 12 of title 17 is a sui generis right, like semiconductor chips, bootlegging, and vessel boat hull protection. There is no express abrogation of sovereign immunity for DMCA violations, and thus the US government is free to – and appears quite happy to – engage in activity, which if done by individuals or companies, would be illegal, perhaps even criminal. The hypocrisy in the US government’s conduct is breathtaking given USTR’s vigorous efforts to peddle the DMCA internationally. Where are the IIPA, BSA, and other “pro-IP” groups on this scandalous treatment of creators? Will they now press for an amendment to 1498(b) to include violations of the DMCA?

The facts in the Blueport case fully support the sense of outrage we should all have over this situation. I will simply copy them verbatim from the CAFC’s opinion so there is no slanting of them. After reading them, ask yourself whether we should ever believe again government officials who talk about the importance of intellectual property:

BACKGROUND

In this case, Blueport claims that the Government-specifically the U.S. Air Force-infringed Blueport's copyright on a software program known as “the AUMD program.” The AUMD program was written by Air Force Technical Sergeant Mark Davenport. On March 6, 2000, Davenport assigned all his rights in the AUMD program to Blueport.

When Davenport wrote the AUMD program, he was employed as a manager of the Air Force Manpower Data System (“MDS”), a database containing manpower profiles for each unit in the Air Force. In his capacity as an MDS Manager, Davenport updated the MDS with new data and provided reports from the MDS to Air Force personnel upon request. Davenport was also a member of the Air Force's Manpower User Group, a group of manpower personnel from each of the Air Force's major commands who provided guidance on the use of the MDS. Based on his experience with the MDS, Davenport concluded that the software the Air Force used to run the MDS was inefficient and began seeking ways to redesign the software program. Davenport initially requested training in computer programming from the Air Force, but his request was denied. Undeterred, Davenport learned the computer programming skills necessary to write the AUMD program on his own time and with his own resources. Davenport then wrote the source code for the AUMD program while at home on his personal computer. Although he wrote the program solely at his home and at his own initiative, Davenport's intent in writing the program was that other Air Force manpower personnel would use it.

In June 1998, Davenport shared an early version of the program with a fellow coworker, and both tested the program on the MDS at work during regular business hours. Based on the results of this testing, Davenport made changes to the source code of the AUMD program on his home computer. Davenport did not at that time, or at any time thereafter, bring the AUMD program's source code to work or copy it onto Air Force computers.

After these initial tests, Davenport began sharing copies of the AUMD program with other colleagues. At first, Davenport shared the AUMD program with colleagues by giving them a computer disk containing the program or by personally installing the program on their computers. Later, Davenport posted the AUMD program on an Air Force web page so that Air Force manpower personnel could download it directly. As the program became popular within the Air Force manpower community, Davenport's superiors asked him to train additional personnel in its use. During this time, he continued to modify the program based on feedback he received and, as a result, improved its functionality and eliminated programming errors. At some point, Davenport added an automatic expiration date to each new version of the AUMD program so that users were required to download the newest version when the older one expired.

In September 1998, Davenport gave a presentation to senior Air Force manpower officers at an annual conference and, according to one of Davenport's superiors, “absolutely sold his audience” on the AUMD program. Davenport's performance report deemed him the “go to troubleshooter for [the] entire [Air Force] manpower community ... [and] the most knowledgeable database manager in [the] career field.” The performance report concluded with a recommendation to promote Davenport immediately.

Despite Davenport's success in creating the AUMD program and his willingness to share it, the Air Force eventually decided it was becoming too dependent on Davenport for access to the program. Accordingly, Davenport's superiors asked him to turn over the source code for the program, which Davenport had always kept on his home computer. When he refused to turn over the source code, his superiors threatened him with a demotion and a pay cut, and excluded him from the Manpower User Group's advisory authority.

Davenport then assigned all his rights in the AUMD program to Blueport. Subsequently, Blueport attempted to negotiate a license agreement with the Air Force. However, the Air Force refused Blueport's offer and solicited other contractors to recreate the AUMD program. The Air Force ultimately contracted with Science Applications International Corporation (“SAIC”). At the request of the Air Force, SAIC programmers modified the AUMD program's object code to extend its expiration date. This modification allowed Air Force manpower personnel to continue to use the AUMD program despite Davenport's refusal to provide the source code.

In 2002, Blueport brought the present claims against the Government for copyright infringement and violations of the DMCA. Specifically, Blueport argues that the Air Force infringed its copyright in the AUMD program. In addition, Blueport argues that the Air Force violated the DMCA by extending the expiration date in the AUMD program's object code-thus circumventing the measures taken by Blueport to prevent unauthorized use of the program. The CFC dismissed Blueport's claims for lack of jurisdiction on the ground that the Government had not waived its sovereign immunity for any of the claims. Blueport now appeals.

Is there such a thing as holding legal title to a registration?

2008-07-29T09:19:00.003-04:00

The question in the title was posed by a decision filed yesterday in Tom Bean v. McDougal Littell (a division of the Houghton Mifflin Company) and R.R. Donnelley & Sons Company, No. 07-8063-PCT-JAT (D. Arizona (James Teilborg, Judge).

The relevant statutory provision is 17 USC 408(a)

— At any time during the subsistence of the first term of copyright in any published or unpublished work in which the copyright was secured before January 1, 1978, and during the subsistence of any copyright secured on or after that date, the owner of copyright or of any exclusive right in the work may obtain registration of the copyright claim …

This provision, drafted by the Copyright Office, contains from the Office’s perspective a big problem, highlighted in bold. The problem is that the statute clearly permits the owner of a single exclusive right to file a claim of registration. From the Office’s perspective that’s a problem because it might lead to multiple registrations for the same work, and a cluttered public record. But the statute has not been amended since passage in 1976. The Office’s initial, immediate response was to solicit a letter from counsel for the Author’s Guild, the late Irwin Karp, that attempted to make the case for what might be called an indivisible registration for divisible copyright; in short, permitting only a single registration per work. That is the system that exists today, and it makes perfect sense; it certainly makes searches simple.

To register a claim you either have to be (1) the author, (2) the assignee of all rights, or (3) an agent for (1) or (2).

In regulations implementing this, we find:

For the purposes of this section, a copyright claimant is either:

(i) The author of a work;

(ii) A person or organization that has obtained ownership of all rights under the copyright initially belonging to the author.1

1 This category includes a person or organization that has obtained, from the author or from an entity that has obtained ownership of all rights under the copyright initially belonging to the author, the contractual right to claim legal title to the copyright in an application for copyright registration.

The kicker here is the footnote, which seems to conflict with the text of the regulation. The regulation refers to ownership of all rights. The footnote, by contrast, refers to a concept not found in the statute, a contractual right to claim legal title. What does it mean to have a contractual right to claim “legal title” to the copyright in an application for copyright registration? Must legal title be the ability to exercise rights, or, can it be merely an exclusive right to file for registration? This latter concept is not found in the statute. In asking this question, note that it is a different question than standing under Section 501(a), which reads in relevant part: “The legal or beneficial owner of an exclusive right under a copyright is entitled, subject to the requirements of section 411, to institute an action for any infringement of that particular right committed while he or she is the owner of it.” Here one must be the legal or beneficial owner of an exclusive right, and not merely possess a contractual right to claim legal title in connection with an application. Assignees of a single exclusive right would of course satisfy Section 501(a) and Section 408(a), but would they satisfy the Office’s regulations for registration purposes? Moreover, what if had such a contractual right to claim legal title but no right to actually exercise a Section 106 or 106A right?

This last issue arose in the Tom Bean case. The photographer plaintiff, along with 127 others, had signed a copyright registration agreement with Corbis, which granted Corbis “legal title” to the photographs “solely for the purpose of copyright registration.” Under the agreement, Corbis agreed “that it will promptly reassign legal title …. upon written request … .” The collective work registration obtained by Corbis was to extend to the individual photographs. Plaintiff sued defendants over claimed re-uses that were not licensed; defendants sought to dismiss the case for lack of subject matter jurisdiction based on an alleged invalid registration: Corbis allegedly could not be a proper registrant because it had only been conveyed the right to register the works and not the right to exercise any of the Section 106 rights. Corbis, in short, could not have brought an infringement suit, but could it have properly registered the works?

Judge Teilborg upheld the registration, but was perplexed by 37 CFR §202.3(a)(ii), writing that because that section “clearly intends to give registration rights to entities other than the author, and because no entities other than the author can have rights under Section 106A(a) “all the rights under the copyright owner originally belonging to the author cannot be taken absolutely literally lest it render 37 C.F.R. §202.3(a)(ii) superfluous.” I don’t know what the court is getting at here. For one thing, registration is not a requirement for VARA [Section 106A] rights. Another way to approach the issue would have been to interpret the regulation as creating two categories: ownership of exclusive rights, and, ownership of the contractual right to claim legal title in an application. But this begs the central question: what does legal title mean in this context? Why the footnote? How is the contractual right to claim legal title different from ownership of Section 106 and 106A rights, and if there is a difference, where in the statute does the statute authorize registration by the merely holder of such a contractual right? One way to look at this is that the Office’s regulations conflict with the statute from two directions: first, by not permitting the owner of a single exclusive right to register a claim to just that right, and second, by permitting a class of people to register that the statute doesn’t permit to register – the holders of a mere contractual right to claim legal title (assuming that right is different from a Section 106 or 106A right).

The problem for photographers is a practical one and one that has vexed Congress and the Copyright Office for quite awhile: how to enable photographers to obtain the benefits of registration while still preserving the integrity of the registration system. The Corbis agreement seems needlessly complex to me: why transfer something called a legal title to claim registration, which is then transferred back (how, by the way, do you transfer back a legal right to register a claim once the claim has already been registered?). A much simpler approach, and one the Office permitted under the 1909 Act, is to appoint Corbis (or any other organization) an agent. Agents can register claims for authors (law firms do this all the time).

Open Access and the NIH

2008-07-28T09:53:00.003-04:00

In 1978, in enacting Section 105 of title 17, Congress faced a choice about what to do with copyrighted works that result from government funding, including basic research funding of scientific, technical, and medical (“STM”) journal articles. One approach was simply to preclude any assertion of copyright, treating such works the same way as works created by government employees within the scope of their employment. That approach would have been simple to apply, but might have inhibited the publication of some STM journals, at a time when hard copy ruled as the method of distribution. Congress chose a middle approach, discussed here in the 1976 House Judiciary Committee report:, which begins by referring to the definition of “work of the United States government”:

A more difficult and far-reaching problem is whether the definition should be broadened to prohibit copyright in works prepared under U.S. Government contract or grant. As the bill is written, the Government agency concerned could determine in each case whether to allow an independent contractor or grantee to secure copyright in works prepared in whole or in part with the use of Government funds. The argument that has been made against allowing copyright in this situation is that the public should not be required to pay a ''double subsidy,'' and that it is inconsistent to prohibit copyright in works by Government employees while permitting private copyrights in a growing body of works created by persons who are paid with Government funds. Those arguing in favor of potential copyright protection have stressed the importance of copyright as an incentive to creation and dissemination in this situation and the basically different policy considerations applicable to works written by Government employees and those applicable to works prepared by private organizations with the use of Federal funds.

The bill deliberately avoids making any sort of outright, unqualified prohibition against copyright in works prepared under Government contract or grant. There may well be cases where it would be in the public interest to deny copyright in the writings generated by Government research contracts and the like; it can be assumed that, where a Government agency commissions a work for its own use merely as an alternative to having one of its own employees prepare the work, the right to secure a private copyright would be withheld. However, there are almost certainly many other cases where the denial of copyright protection would be unfair or would hamper the production and publication of important works. Where, under the particular circumstances, Congress or the agency involved finds that the need to have a work freely available outweighs the need of the private author to secure copyright, the problem can be dealt with by specific legislation, agency regulations, or contractual restrictions.
H.R. Rep. No. 94-1476, 94th Cong., 2d Sess. 59 (1976).

With the advent of the World Wide Web, the National Institutes of Health, which provides about $30 billion in research grants, decided the public and other researchers would benefit from having STM articles it was funding placed in the National Library of Medicine’s PubMed Central on line archive. Acting responsibly, a NIH adopted a voluntary deposit policy several years ago, but participation was extremely low because STM publishers were opposed to it and the authors were not well informed about it. So, in the 2008 Labor-HHS Appropriations bill, Congress directed NIH to adopt a mandatory deposit policy. The STM publishers lobbied very hard against the bill, both in Congress and in the Administration (e.g., trying to convince HHS to withdraw support of the policy). Congress rejected the opposition, and enacted the mandatory deposit policy.

Under the policy, the grantee must ensure that a copy of the author’s final manuscript is electronically submitted to the PubMed Central archive, and that no later than 12 months after publication, the NIH may make the full text of the manuscript publicly accessible in PMC. The policy went into effect in April of this year, and with no apparent difficulty in compliance. As noted above, NIH provides about $30 billion in research grants, which amounts on average to about $400,000 per grantee. STM publishers require the authors/grantees to transfer the copyright as a condition of publication. The publishers manage the peer review process, but the peer reviewers generally aren't paid -- they are members of the community who do the peer review for free. Public institutions pay the salaries of the researchers and the hard costs of the building, lab, materials, energy etc., a very large amount. Publishers thus get the content for free, generally get the peer review for free, and don’t pay a penny toward the costs of the research. Under the current NIH policy, they have a 12 month period of exclusivity for individual articles, and a 95 year term of protection for the journal which they may also load up with all the DRMs their little hearts desire. Since time is usually of the essence in STM publishing, and subscriptions are sold by the year for a journal and not by individual article, publishers are provided with ample opportunity to recoup their investment and make a profit.

The American Psychological Association is reported to have to gone off the deep end on the issue. As reported in The Open Access News Blog on July 15, 2008:

The American Psychological Association may have the worst publisher policy to date for NIH-funded authors. Excerpt:

In compliance with [the NIH OA policy], APA will deposit the final peer-reviewed manuscript of NIH-funded research to PMC upon acceptance for publication. The deposit fee of $2,500 per manuscript for 2008 will be billed to the author's university per NIH policy....

Even after collecting the fee, the APA will not deposit the published version of the article, will not allow OA release for 12 months, will not allow authors to deposit in PMC themselves (and bypass the fee), will not allow authors to deposit in any other OA repository, and will not allow authors to retain copyright.

As a commentator pointed out on that blog:

Since there is virtually no cost associated with the mechanics of deposit itself, and the NIH policy allows an embargo on public availability of articles of up to one year in order to protect the traditional subscription market, it is hard to see what this policy is intended to accomplish other than to force an additional income stream out of the faculty authors who already provide the APA with free content. And there is heavy irony in the APA’s assertion that they can do this “as the copyright holder.” ...

The NIH policy has been raised most recently by a bill reported out by the Subcommittee on Labor, Health and Human Services, Education, and Related Services passed out of a provision for Fiscal Year 2009 appropriations which would continue the NIH policy. STM publishers are claiming that the issue is one that arises under the copyright law, and are attempting to have the Judiciary Committee intervene on their behalf. The claim that the NIH policy raises copyright issues is absurd. First, the policy does not reach the journal at all; only individual articles. Publishers’ investment is thus left untouched entirely. Publishers did not invest a dime in the individual articles, and thus have no investment to complain about. They still have a 12 month window of exclusivity for the articles, which is quite long enough to ensure that their only investment – in the journal – is protected. As reviewed at the beginning of this posting, Congress could have chosen to deny all protection to STM articles funded in whole or in part by the government. It is surprising by taking a less extreme, balanced approach, Congress is now being attacked by those who contributed nothing financially to the creation of the works.

Infringement and the Foreign Sovereign Immunities Act

2008-07-24T08:39:00.004-04:00

May a foreign government be sued in U.S. courts for infringement occurring in the United States? The answer, provided by the Foreign Sovereign Immunities Act, 28 U.S.C.A. §§ 1602 to 1611, is no. Section 1603 states: “Subject to existing international agreements to which the United States is a party at the time of enactment of this Act a foreign state shall be immune from the jurisdiction of the courts of the United States and of the States except as provided in sections 1605 to 1607 of this chapter.” Exceptions are provided in section 1605:

(a) A foreign state shall not be immune from the jurisdiction of courts of the United States or of the States in any case—
(1) in which the foreign state has waived its immunity either explicitly or by implication, notwithstanding any withdrawal of the waiver which the foreign state may purport to effect except in accordance with the terms of the waiver;
(2) in which the action is based upon a commercial activity carried on in the United States by the foreign state; or upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere; or upon an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States.

Given the clear basic immunity, cases focus on the exceptions. One discussion of the exception is in Leutwyler v. Office of Her Majesty Queen Rania Al-Abdullah, Leutwyler v. Office of Her Majesty Queen Rania Al-Abdullah, 184 F. Supp. 2d 277 (S.D. N.Y. 2001), which involved a dispute between a photographer hired to take pictures of the Queen of Jordan. In reviewing the plaintiff's argument that the defendant's activities fit with the exceptions to FSIA immunity, Judge Lynch wrote:

[I]t is clear that Leutwyler has alleged that the Defendants engaged in at least two series of acts that were unmistakably commercial in nature. First, he argues that the Defendants entered into a contract for him to travel to Jordan to photograph the Royal Family and to grant Queen Rania a limited license to use the pictures for personal use and distribution to Middle Eastern print media. …

… If representatives of the Royal Family arranged for Leutwyler to photograph them, develop the prints, and assign to them rights over the resulting photos, that activity is indistinguishable from the garden-variety commercial transactions that families or business entities throughout the world enter into with photographers to obtain portraits for home or office display

… Second, Leutwyler argues that by allegedly furnishing photos taken by Leutwyler for use in the Jordan Diary, a publication that has been sold in the United States, the Individual Defendants facilitated a venture that was unmistakably commercial in nature. … Once again, while the purpose of publishing the diary may have been governmental (disseminating information about Jordan and encouraging tourism), the nature of the activity (publishing and selling books) is clearly commercial.

Leutwyler has therefore sustained his burden of demonstrating that the Individual Defendants engaged in certain “commercial activity,” as that term is defined in § 1603(e), that could give rise to subject matter jurisdiction under the FSIA.

Similarly, in Los Angeles News Service v. Conus Communications Co., Ltd., Los Angeles News Service v. Conus Communications Co., Ltd., 969 F. Supp. 579 (C.D. Cal. 1997), the court rejected a claim by the Canadian Broadcasting Corporation that its broadcast of the plaintiff's footage was not commercial within the meaning of the exemption.

The FSIA (not to be confused with the similarly acronymed FISA), was raised unsuccessfully again less than a week ago in Santilli v. Cardone, 2008 WL 2790242 (M.D.Fla. July 18, 2008)(No. 8:07-cv-308-T-23MSS). Here are the facts from the court’s opinion:

The pro se plaintiff sues the defendants Cornell University (“Cornell”), Instituto Nazionale Fisica Nucleare (“INFN”), and the Universita' Del L'Aquila (the “University of Aquila”). Cornell owns and operates arXiv, an Internet-based collection of physics manuscripts. The plaintiff alleges that after he attempted to post several of his manuscripts to arXiv's high energy physics section, the arXiv administrators relocated the manuscripts to the general physics section. Meanwhile, physicists Fabio Cardone (“Cardone”), Roberto Mignani (“Mignani”), and Alessio Marrani (“Marrani”) successfully posted their manuscripts to the high energy physics section. The plaintiff alleges that the physicists' papers “violate the most basic laws in physics,” plagiarize the plaintiff's works, and violate the plaintiff's copyrights. The plaintiff alleges that INFN provides financial support to Cardone, Mignani, and Marrani, and that the University of Aquila employs Cardone. Cornell, INFN, and the University of Aquila move to dismiss the plaintiff's claims in the third amended complaint, and the plaintiff responds in opposition.

The University of Aquila claimed immunity under the FSIA, arguing that it was an organ of the Italian government. As noted by the court:

The “organ of a foreign state” requirement commends consideration of (1) whether the foreign state created the agency for a national purpose, (2) whether the foreign state requires the hiring of public employees and pays their salaries, (3) whether the foreign state funds the agency, (4) whether the agency holds an exclusive right to some right in the state, and (5) whether state law treats the agency as dependent on the foreign state.

The University argued it was an organ of the States because it receives approximately seventy-five percent of its funding from the Italian government, because the Italian government oversees and controls the University's budget, and because the university “conducts research that serves a national purpose.” Not enough the court held. What was required was that:

(1) that the university's purpose of teaching and conducting research serves a national purpose, (2) that the Italian government actively supervises the university or requires it to hire public employees, (3) that the university holds exclusive rights, or (4) that Italian law treats the university as dependent upon the government.

In the end, this holding didn’t matter because the court found there was no personal jurisdiction and the copyright claim – for plagiarism, is not a legally supportable claim.

The Declaration on the Three-Step test

2008-07-23T10:42:00.005-04:00

On April 2d, I did a post on the counter-reformation against amendments to copyright laws in the public interest. It is, apparently, not enough for some copyright holders that their rights have ballooned to unprecedented size and strength: they also have to fight back any efforts to ameliorate the harsh consequences on the public from the expansion of those rights. One political argument advanced in the push-back against the public is what I call the Neo-Blackstone movement: copyright is property, and property represents “that sole and despotic dominion which one man claims and exercises over the external things of the world, in total exclusion of the right of any other individual in the universe.” Blackstone’s ode here (in his Commentaries) to property was never descriptive, not even of then-contemporary English law; it was in fact merely a political wish. Professor Robert Gordon, in a study of the actual state of the law in Blackstone’s time, wrote:

What strikes the backward-looking observer
as curious is simply this: that in the midst of
such a lush flowering of absolute dominion talk
in theoretical and political discourse,
English legal doctrines should contain so
very few plausible instances of absolute
individual rights. Moreover, it is curious that
English and colonial social practices contained so
many property relations that seem to traduce the
ideal of absolute individual rights.
Robert Gordon, “Paradoxical Property,” reproduced in Early Modern Conceptions of Property 95, 97 (John Brewer and Susan Staves editors 2996, Rutledge).

And as much as Blackstone pushed the view of copyright as a natural property as a lawyer for the London publishers in the great “Battle of the Bookseller,” when he later became a judge, he did not adhere to the view of copyright as vesting its owner with the sole and despostic dominion he earlier advanced in his Commentaries. Wonderful evidence of this is provided in a report of the 1774 decision in Hawkesworth v. Newbery, which held that abridgments (we would call them condensations today), might not violate copyright owners’ rights:

The Lord Chancellor was of opinion that this abridgement of the work was not any violation of the author's property whereon to ground an injunction.

That to constitute a true and proper abridgement of a work the whole must be preserved in its sense: And then the act of abridgement is an act of understanding, employed in a carrying a large work into a smaller corpus, and rendering it less expensive, and more convenient both to the time and use of the reader. Which made an abridgement in the nature of a new and meritorious work.

That this had been done by Mr. Newbery, whose edition might be read in a fourth of the time, and all the substance preserved, and conveyed in language as good or better than the original, and in a more agreeable and useful manner. That [the Lord Chancellor] had consulted Mr. Justice Blackstone whose knowledge and skill in the profession was universally known, and who as an author had done honour to his country.

That they had spent some hours together, and were agreed that an abridgement, where the understanding is employed in retrenching unnecessary and uninteresting circumstances, which rather deaden the narration, is not an act of plagiarism upon the original work, nor against any property of the author in it, but an allowable and meritorious work. And that this abridgement of Mr. Newberry's falls within these reasons and descriptions.

Judgment for defendant abridger. Fair abridgments were permitted in the United States until passage of the 1909 Act. So much for the sole and despostic view. But one even sees expressions of the view that the natural state of affairs in copyright is sole and despotic dominion in how to interpret the Berne Convention's three-step test. Professor Sam Ricketson, the god of Berne Convention scholars and an all around great guy, wrote in a 2003 study of rights and limitations in the Berne Convention statements that limitations and exceptions will be allowed if “there is a public interest … that justifies overriding the private rights of authors in their works in … particular circumstances.” Sam Ricketson, WIPO Study on Limitations and Exceptions of Copyright Related Rights in the Digital Environment 4, Standing Committee on Copyright and Related Rights, Ninth Session, Geneva, June 23 to June 27, 2003, SCCR/9/7 (April 5, 2003).

I don’t accept the private -- public dichotomy advanced here: there is, after all, no such thing as copyright rights privately created and privately enforced. Copyright is created by governments for public reasons and is enforced by public laws and public judges. Copyright laws are created as an entire fabric consisting of certain entitlements given to copyright owners, and certain entitlements given to the public. There is no basis to regard any one entitlement as more privileged or important than another. That leads me to an exciting new declaration on the three-step test recently issued by three very prominent European scholars: Reto. M. Hilty, who is the Director of the Max Planck Institute for Intellectual Property, Competition and Tax Law, Munich, and a Professor at the Universities of Zurich and Munich, Germany; Christophe Geiger, a Researcher, at Max Planck Institute and Associate Professor and Director, Centre for International Industrial Property Studies (CEIPI), University of Strasbourg, France; and Jonathan Griffiths, Senior Lecturer, School of Law, Queen Mary, University of London.

The declaration is available here, at the Max Planck website, and is entitled “A Balanced Interpretation of the ‘Three-Step Test’ in Copyright Law. The word balanced is accurate for all but the most partisan of combatants in the Copyright Wars. The declaration states, for example: “Copyright law aims to benefit the public interest. It produces important incentives for the creation and dissemination of new works of authorship to the general public. These works serve to satisfy common needs; either in their own right or as a basis for the creation of further works.” The declaration also does not interpret the three-step test as a free for all, noting: “The Three-Step Test has already established an effective means of preventing the excessive application of limitations and exceptions.” No bomb throwers in this group. The declaration adds, though: “The public interest is not well served if copyright law neglects the more general interests of individuals and groups in society when establishing incentives for rightholders.”

This balanced view is continued in how to interpret the three-step test. The dominant way of interpreting it – advanced by copyright owners and natural rights copyright lawyers – is as an obstacle course: national governments interested in amendments to serve the public interest have to surmount all three steps, and the burden is really heavy at each step. In place of this absurd approach, the declaration states in reaction to a finding that “in applying the Three-Step Test, national courts and legislatures have been wrongly influenced by restrictive interpretations of that Test”:

1. The Three-Step test constitutes an indivisible entirety. The three steps are to be considered together and as a whole in a comprehensive overall assessment.
2. The Three-Step Test does not require limitations and exceptions to be interpreted narrowly. They are to be interpreted according to their objectives and purposes.
3. The Three-Step Test’s restrictions of limitations and exceptions to exclusive rights to certain special cases does not prevent legislatures from introducing open ended limitations and exceptions, so long as the scope of such limitations and exceptions is reasonably foreseeable …

The last statement refers of course to fair use and should be a helpful rebuke to the whispering campaign being conducted in certain national capitals against the adoption of more liberal fair dealing laws. I regard the declaration as a watershed event: a statement by the crème de la crème of European scholarship that the counter-reformation is exactly that.

The EU Railroads Term Extension

2008-07-22T08:33:00.006-04:00

I have avoided commenting on the EU's proposed 45 year extension for sound recordings because the effort is so clearly wrong, so clearly another example of politicians ignoring the public interest in favor of hobnobbing with (in this case aged) stars that there is nothing constructive to say. Term extension will benefit a very few a great deal, and most not at all. The public will suffer as it always has done, but because the suffering is suffered in small amounts and diffusely, politicians are spared confronting directly the ugly consequences of their failure to act in the public interest. But yesterday, a succinct letter on the topic was published in the (UK) Times online by a number of European scholars that I thought all worth reprinting. For those in the U.S., it should be noted that in Europe academics play a significant role in governmental policy and are not as politically polarized as in the States. Here it is:

From The Times
July 21, 2008

Copyright extension is the enemy of innovation
The proposed Term Extension Directive will alienate a younger generation that fails to see a principled basis

Sir, Europe’s recorded music was about to experience a wave of innovation. For the first time, a major set of culturally important artefacts was to enter the public domain: the sound recordings of the 1950s and 1960s. Apparently not so. If the European Commission has its way, re-releases and reworkings of recorded sounds will remain at the mercy of right owners for another 45 years (report, July 17). Why?

The record industry succeeded to supply the Commission with evidence that was not opened to public scrutiny: evidence that claims that consumer prices will not rise, that performing artists will earn more, and that the record industry will invest in discovering new talents, as if exclusive rights for 50 years had not provided an opportunity to earn returns.

The Commission’s explanatory memorandum states: “There was no need for external expertise.” Yet, independent external expertise exists. Unanimously, the European centres for intellectual property research have opposed the proposal. The empirical evidence has been summarised succinctly in at least three studies: the Cambridge Study for the UK Gowers Review of 2006; a study conducted by the Amsterdam Institute for Information Law for the Commission itself (2006); and the Bournemouth University statement signed by 50 leading academics in June 2008.

The simple truth is that copyright extension benefits most those who already hold rights. It benefits incumbent holders of major back-catalogues, be they record companies, ageing rock stars or, increasingly, artists’ estates. It does nothing for innovation and creativity. The proposed Term Extension Directive undermines the credibility of the copyright system. It will further alienate a younger generation that, justifiably, fails to see a principled basis.

Many of us sympathise with the financial difficulties that aspiring performers face. However, measures to benefit performers would look rather different. They would target unreasonably exploitative contracts during the existing term, and evaluate remuneration during the performer’s lifetime, not 95 years.

We call on politicians of all parties to examine the case presented to them by right holders in the light of independent evidence.

Professor Lionel Bently, Director, Centre for Intellectual Property and Information Law, University of Cambridge

Professor Pierre-Jean Benghozi, Chair in Innovation and Regulation in Digital Services; Director, Research in Economics and Management, Ecole polytechnique, CNRS 1, Paris

Professor Michael Blakeney, Co-Director, Queen Mary Intellectual Property Research Institute, University of London

Professor Nicholas Cook, Director, AHRC Research Centre for the History and Analysis of Recorded Music, Royal Holloway, University of London

Professor Dr. Thomas Dreier, Director, Centre for Information Law, Universität Karlsruhe, Karlsruhe Institute of Technology

Professor Dr Josef Drexl, Director, Max-Planck-Institute for Intellectual Property, Munich

Dr Christophe Geiger, Associate Professor and Director elect, Centre for International Industrial Property Studies (CEIPI), University of Strasbourg

Professor Johanna Gibson, Co-Director, Queen Mary Intellectual Property Research Centre, University of London

Professor Dr Reto Hilty, Director, Max-Planck-Institute for Intellectual Property, Munich

Professor Dr Thomas Hoeren, Director, Institute for Information, Telecommunications- and Media Law, Münster University

Professor Bernt Hugenholtz, Director, Institute for Information Law, University of Amsterdam

Professor John Kay, Chair, British Academy Copyright Review

Professor Martin Kretschmer, Director, Centre for Intellectual Property Policy & Management, Bournemouth University

Professor Dr Annette Kur, Max-Planck-Institute for Intellectual Property, Munich

- Show quoted text -

Professor Hector MacQueen, Co-Director, SCRIPT/AHRC Centre Intellectual Property & Technology Law, University of Edinburgh

Professor Ruth Towse, Professor of the Economics of Creative Industries, Erasmus University Rotterdam and Bournemouth University

Professor Charlotte Waelde, Co-Director, SCRIPT/AHRC Centre Intellectual Property & Technology Law, University of Edinburgh

The Facebook Suit

2008-07-21T09:12:00.003-04:00

The lawsuit filed by Facebook in California against the German site StudiVZ (and StudiVZ’s declaratory judgment action against Facebook in a German court) has been all over the newspapers and blogosphere. StudiVZ s an abbreviation of Studentenverzeichnis or Studienverzeichnis, which means students' directory. Studivz claims the suit is motivated by what I calls the failure of Facebook’s German language version: "Their strategy appears to be: 'If you can't beat them, sue them,'" said Marcus Riecke, chief executive of Studivz, which is owned by Verlagsgruppe Georg von Holtzbrinck, a German publishing company. The site has about 10 million members, mostly in Germany, Switzerland and Austria, although my German au pair uses it here in Connecticut. (I do wonder about the jurisdictional issue). A side by side of the two is available, here.

I haven’t seen Facebook’s complaint and so don’t know if it is a copyright infringement suit (as is usually claimed), a trademark suit, or both. Some of the language in press releases sounds like trademark, e.g., “As with any counterfeit product, StudiVZ’s uncontrolled quality standards for service, features and privacy negatively impact the genuine article,” Facebook is said to have stated in the complaint. Facebook is also said to have sued over the “copying the look, feel, features and services of Facebook.” Look and feel may state a copyright claim, but services don't. Even before the suit, blogs have been very loose about what they consider to be a “clone.” On July 11th, Mashable ran a post called “Copycats: Top 10 International Facebook Clones." There are services that market themselves as offering clone templates and functionalities for popular sites, but as the software industry discovered decades ago, "look and feel" charges are more easily made than won.

Preemption and Mutant Copyright

2008-07-18T09:50:00.003-04:00

In Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23, 31 (2003), Justice Scalia phrased the question to be decided this way:

[A]s it comes to us, the gravamen of respondents' claim is that, in marketing and selling [defendant’s TV series] as its own product without acknowledging its nearly wholesale reliance on the [plantiff’s] television series, Dastar has made a “false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which ... is likely to cause confusion ... as to the origin ... of his or her goods.” § 43(a). See, e.g., Brief for Respondents 8, 11. That claim would undoubtedly be sustained if Dastar had bought some of New Line's Crusade videotapes and merely repackaged them as its own. Dastar's alleged wrongdoing, however, is vastly different: It took a creative work in the public domain-the Crusade television series-copied it, made modifications (arguably minor), and produced its very own series of videotapes. If “origin” refers only to the manufacturer or producer of the physical “goods” that are made available to the public (in this case the videotapes), Dastar was the origin. If, however, “origin” includes the creator of the underlying work that Dastar copied, then someone else (perhaps Fox) was the origin of Dastar's product. At bottom, we must decide what § 43(a)(1)(A) of the Lanham Act means by the “origin” of “goods.”

He then answered the question as follows:

Assuming for the sake of argument that Dastar's representation of itself as the “Producer” of its videos amounted to a representation that it originated the creative work conveyed by the videos, allowing a cause of action under § 43(a) for that representation would create a species of mutant copyright law that limits the public's “federal right to ‘copy and to use’ ” expired copyrights, Bonito Boats, supra, at 165, 109 S.Ct. 971. When Congress has wished to create such an addition to the law of copyright, it has done so with much more specificity than the Lanham Act's ambiguous use of “origin.”

Subsequent courts have not limited Dastar to works that are in the public domain, which is why it is a surprise to read the recent opinion in LBB Corp. v. Lucas Distribution, Inc., 2008 WL 2743751 (S.D.N.Y July 14, 2008) No. 08 Civ. 4320(SAS). The facts are a bit spare, perhaps because of the court’s sensitivity to the pornographic of the films. As related by the court:

Plaintiff LBB Corporation is a California corporation that produces and distributes pornographic films that are marketed toward niche audiences. Pursuant to a contract dated November 6, 2007, LBB purchased all rights to a film entitled Nasty Piss Boys (the “Work”), a film produced in the Czech Republic by Galaxia Studio. Defendants are marketing a film entitled Raw Twinks in Czech, an identical or substantially similar film that features the same performers in the same sequence.FN3

FN3. See Compl. ¶¶ 23, 36. A cursory examination of the DVD cases indicates that at least one of the photographs on defendants' case is identical to a photograph on the case of the Work.

Claims were brought under the Copyright Act and a New York State consumer protection law. Section 349 of the General Business Law. The opinion only concerns the state law claim. Defendant moved to dismiss the claim under FRCP 12(b)(6) for failure to state a claim, arguing inadequacy under state law. The court granted the motion on that ground, but rejected defendant’s preemption argument. That seems error to me. In finding that the requirement of intentional deception saved the claim from preemption, the court merely cited to a pre-Dastar opinion in the Second Circuit, and then added: “The only harm alleged in the Complaint is actual confusion amongst consumers whereby the public is deceived and confused into believing that the Defendants' film is produced, provided, endorsed or authorized by Plaintiff.”

But the actual claim seems to be based on what Dastar rejected, a claim based on the content of the film, not confusion as to its origin.

EU Press Release on Term Extension

2008-07-16T14:10:00.003-04:00

Here is a link to the EU's Press Release today proposing the extension of term for sound recordings from 50 to 95 years. As the Press Release notes, there is an additional proposal to deal with the problem of term for co-authorship for musical compositions. The proposal is the same as that found in U.S. law:

In the case of a joint work prepared by two or more authors who did not work for hire, the copyright endures for a term consisting of the life of the last surviving author and 70 years after such last surviving author's death.

Here's a teaser though: what is the term for a co-written work where one author is an individual and the other author has created the work as a work for hire?

The Strange Copyright World of Warcraft

2008-07-15T08:48:00.006-04:00

The trial court has handed down its summary judgment opinion in MDY Industries, LLC v. Blizzard Entertainment, Inc., involving the multiplayer online role-playing game "World of Warcraft" and a bot program known as WowGlider, created by declaratory judgment plaintiff. WowGlider plays WoW while the player is away from his or her computer, thereby permitting the player to advance more quickly than he or she otherwise could. WoW's owners didn't like this, claiming it violated terms of use and the end user license. Blizzard found out about the activity through its "Warden" spyware program, discussed here in Wikipedia, and in the opinion at pages 17-20. Blizzard took a page out of the Godfather by sending representatives to MDY owner Michael Donnnelly's home and telling him they would file suit the next day against MDY and Donnelly unless he agreed to stop selling the program. About 100,000 copies of the program have been sold, as compared to the 10 million active players of WoW. Not intimidated, Donnelly filed a declaratory judgment action later that day. Blizzard filed a counterclaim, charging contributory infringement and vicarious liability.

The court held for Blizzard on the copyright claims (No. CV-06-2555-PHX-DGC (David Campbell, Judge, July 14, 2008)), available here. On the DMCA claims, the court granted MDY's motion that the Warden spyware did not qualify as controlling access within the meaning of 17 USC 1201(a)(2), but denied summary judgment on Blizzard's 1201(b)(1) claim that the spyware was a technological protection measure: MDY argued that the code from the game client software was not written to RAM after the user makes it through the spyware scan; the court found there was a factual dispute "with respect to the extent to which Blizzard's protective software protects the copying of software code to RAM ... ."

The court's holding on the copyright claims compares very unfavorably to its handling of the DMCA claims, permitting a chilling extension of control by copyright owners of software over copies of programs they have sold. The critical point is that WoWGilder did not contributorily or vicariously lead to violating any rights granted under the Copyright Act. Unlike speed-up kits, there was no creation of an unauthorized derivative work, nor was a copy made even under the Ninth Circuit's misinterpretation of RAM copying in the MAI v. Peak case. How one might ask can there be a violation of the Copyright Act if no rights granted under the Act have been violated? Good question.

To get to its result, the court had to first find that WoW, even though sold over the counter, was licensed not sold. In so finding, the court declined to follow the recent Vernor opinion in the Western District of Washington, believing it had to follow other Ninth Circuit precedent. I agree with the Vernor court that the other precedent (MAI, Triad, Wall Data) do not hold that over the counter software is licensed, not sold. (WoW may be purchased online too, but I don't think this changes the analysis.). Having found there was license not a sale, there still had to be a breach of the license in order to permit an infringement action to lie, and recall here that the claim is not one for direct infringement, but rather secondary liability; there was no privity between the parties. There was in fact no provision in the license that barred use of WoWGlider. The court took the extraordinary step of stitching together two unrelated provisions to create one. You have to read it to believe it, but it took the court 8 pages to go through this hard work, and why? Was the court offended by what it regarded to be cheating? If so, God help us if law is being reduced to such subjective, non-statutory grounds.

Lassie Rescued Again

2008-07-14T08:12:00.004-04:00

The Ninth Circuit has saved the copyright in Lassie for its authors' heirs, rejecting a patently frivolous claim by Classic Media, Inc. that a woefully inadequate transfer defeated the heirs' termination rights. The opinion in Classic Media, Inc. v. Winifred Mewborn, available here.

The case is pretty straightforward and involves transfers made by the wife (later deceased) and daughters of Eric Knight, who wrote the 1938 novel "Lassie Come Home." Mr. Knight had made an original transfer, and then died in 1943 before the renewal term, bequeathing his rights to his family. Under the Fred Fisher and Rear Window cases, his heirs obtained all rights free and clear of the transfer of renewal rights when they register the renewal claims. Plaintiff's predecessor in interest had an agreement with Mrs. Knight to use the novel in the later television series, but did not have an agreement with the three daughters. In 1976, before the 1976 Act became effective on January 1, 1978, the daughters made transfers for pitiful sums. Termination rights were thus governed by Section 304(c), not Section 203.

A critical difference between the section 203 and section 304(c) termination rights is the limitation of the section 203 termination right to transfers made by the author(s), 203(a)(1), a limitation not found in Section 304(c). See Section 304(c)(1): “(1) In the case of a grant executed by a person or persons other than the author … .” The reason for limiting the section 203 termination right to the author was explained as follows in the Register of Copyrights' 1965 report:

[A]s a direct result of the present renewal provisions, a large number of binding transfers and licenses covering renewal rights have been executed by the author's widow, children, and other statutory beneficiaries, as well as the author himself. We believe that, for example, where the author's widow was the proper renewal claimant but had previously executed a transfer of her renewal rights, she should be able to gain the extended term after the present 28-year renewal period is over.
Supplementary Report of the Register of Copyrights on the General Revision of the U.S. Copyright Law: 1965 Revision Bill 96 (Comm. Print 1965).

Section 304(c)(1) was thus intended for exactly the situation that arose with Lassie. Both Sections bar any effort to contractually give up termination rights. The relevant language in Section 304(c)(5) states that termination "may be effected notwithstanding any agreement to the contrary," so it mattered not at all what the language of the 1976 transfers was. They were pre-1978 transfers, and thus were terminable at will if done in a timely fashion, as they were.

The district court got matters completely fouled up, but the Ninth Circuit straightened them out, also delivering repeated criticisms of Classic's lawyer for what it seems to have perceived as an effort to intimidate an elderly woman. See. e.g., page 8533 where counsel accused Mr. Knight's daughter of extortion, and threatened to hold her and her counsel personally responsible for "enormous and irreparable damages." I don't know the precise procedural posture of the case at this point because of the reversal (there was a Lanham Act claim too), but I hope that Mr. Knights' daughter is able to receive her full attorney's fees and costs for a case that should never have been brought (and it was brought by Classic as a declaratory relief action).

Eleventh Circuit: Fair Use, Laches, and Kitchen Sink

2008-07-11T09:13:00.010-04:00

The Eleventh Circuit has been on a copyright tear in the last two weeks. In addition to the en banc opinion in the Greenberg - National Geographic Society case, there was a highly technical opinion on the Satellite Home Viewer Act and the Section 119 compulsory license, as well as today's opinion: Peter Letterese & Associates, Inc. v. World Institute of Scientology Enterprises, a 69 page opinion by Judge Tjoflat. The opinion is so vast that he has a introductory section explaining its organization.

So what, you might ask, caused so many trees to be felled and ink to be spilled? There are almost 10 pages of facts, for one thing. I will boil the facts down to this: there was a guy (Leslie Achilles "Les" Dane) who developed a sales book on closing techniques. L. Ron Hubbard liked it, bought some copies, and began teaching its techniques. For many years, Dane and the Scientologists had a good working relationship; Dane went to many Scientology offices and gave seminars. Dane died and a different company, run by a booted-out Scientologist (Peter Letterese), bought Dane's copyrights and sued the Scientologists.

The first issue to be discussed was whether a derivative work was created. Here the facts are unclear to me, but in one part of the opinion it is stated that the Scientologists "did not make copies of the book itself; students would either borrow or purchase the book for their study." The Scientologists did, though, produce their own course book, and may have appended some of Dane's material to it without copying that material. This seems to be what led the Eleventh Circuit to trash-talk the Ninth Circuit's Mirage Editions v. Albuquerque A.R.T. Co., 856 F.3d 1341 (9th Cir. 1988) opinion, which held that remounting an original copy was an infringing work. No way according to the Eleventh, siding with Judge Easterbrook's opinion in Lee v. A.R.T. Co., 125 F.3d 582 (77th Cir. 1997).

There are then 15 pages on whether the two course books were substantially similar. I can sum that up in one word, "no." Next up was fair use, 28 pages. There are a few interesting passages in that discussion. The first is the court of appeals' rejection of the district court's "fifth factor," which it called "the copyright owner's actual consent to the use of the copyrighted material." This factor was held by the court of appeals to be "incorrect, both in terms of logic and precedent." If someone has consented, then one need not rely on fair use, which is a privileged, unconsented to use. The rest of the fair use opinion is straightforward enough, but there is a discussion of out of print books worthy of reading. The court held that the fact that a book is out of print will tend to favor fair use (p. 46-47). But in this case, the plaintiff withheld the book in order to make a decision about when and how to re-release it; hence the book was not out-of-print in the usual sense, i.e., no immediate plans to republish it.

The final part of the opinion deals with whether laches is available for causes of action brought within the statute of limitations period. I have blogged about this before, and my view, siding with the Fourth Circuit's Lyons opinion, is no, it is not. The Eleventh Circuit couldn't bring itself to say "no, never," but did say a: "presumptive 'no;' there is a strong presumption that a plaintiff's suit is timely if it is filed before the statute of limitations has run. Only in the most extraordinary circumstances will laches recognize a defense." The court added,: "Even where such extraordinary circumstances exist, however, laches serves as a bar only to the recovery of retrospective damages, not to prospective relief."

Judge Posner on Attorney's Fees to Defendants

2008-07-10T09:49:00.004-04:00

Yesterday, Judge Posner handed down an opinion in Eagle Services Corp. v. H20 Industrial Services that is sure to cited by many future defendants who prevail and seek their attorney's fees. In a jury case, after Plaintiff rested, the district court granted defendant's motion for judgment as a matter of law, but denied a subsequent motion for attorney's fees. The district court found the suit not frivolous. The court of appeals found the suit to be frivolous. Plaintiff conceded it had suffered no actual damages and was not entitled to statutory damages. Instead, it sought defendant's indirect profits.

The suit involved an alleged claim of copyright infringement in a compilation of OSHA regulations. Employees of plaintiff left to start a new, competing firm. Plaintiff believing that defendants had taken its manual with them, and sent two people to defendant under the guise of being prospective customers. When they asked to see defendant's safety manual, they were shown plaintiff's. But defendants never sold copies of plaintiff's manual, and later developed their own manual that was, apparently, not infringing. In the litigation, plaintiff acted very aggressively, deposing all of H20's existing customers and a number of prospective ones as well. Judge Posner wrote, "the defendants claim without contradiction that as a result H20 lost many customers."

Plaintiff argued for a bizarre form of damages: "all the profits that H20 made in its business before it created is own manual." There was no ground for thinking there were any profits attributable to the infringement. Because the court of appeals found the suit to be frivolous and against a newer, smaller, and weaker competitor, as a matter of general law, the court of appeals thought that an award to defendant was required. If that is all the opinion said, I wouldn't be writing this blog. The court of appeals went on, saying that the case for fees to defendant is "even stronger in a copyright case." The backdrop to this is the continued refusal of some courts to adopt the even handed approach to awarding fees mandated by the Supreme Court's opinion in Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994). Before Fogerty many courts had a double standard in which prevailing plaintiffs got attorney's fees as a matter of course, but prevailing defendants had to prove plaintiff was something like a ax murderer.

Judge Posner set out to rectify the continued refusal of some court to comply with Fogerty:

If it is an asymmetry in copyright, it is one that actually favors defendants. The successful assertion of a copyright confirms the plaintiff's possession of an exclusive, and sometimes very valuable, right, and this gives it an incentive to spend heavily in litigation. In contrast, a successful defense against a copyright claim, when it throws the copyrighted work into the public domain, benefits all users of the public domain, not just the defendant; he obtains no exclusive right and so his incentive to spend on the defense is reduced and he may be forced into an unfavorable settlement.
...

In the typical copyright case a victory for the defendant enlarges the public domain by denying the plaintiff's right to prevent the defendant -- or anyone else -- from using the intellectual property alleged to infringe the plaintiff's copyright.

There is also this passage in the opinion:

When a plaintiff is suing just for money and he has no ground at all for obtaining a money judgment, the fact that his rights may have been violated does not save his suit from being adjudged frivolous. (page 5)

While this is dictum since Plaintiff's rights had not been found to be violated, it should be an important warning signs for copyright owners who have not suffered any financial harm, and are bringing suits, like Eagle did, for non-competitive reasons.

H.T. to C.E. Petit who I believe will disagree with this post.

A 1909 Act work for hire puzzle

2008-07-09T11:25:00.003-04:00

Olen York sent me this question awhile back. I would be interested in what people think. It involves the interplay between the 1909 Act and Section 303 of the 1976 Act. Here it is, slightly revised:

A mural is created in 1940 under a work for hire, but the work is not published. The author of the mural dies in 1950. What is the term of protection?

The term can't be life of the author plus 70 years since it is work for hire.

Patrick Ross and Fair Use

2008-07-08T10:20:00.003-04:00

The Yiddish/Aramaic word “chutzpah” is well known, and has been defined variously as gall, audacity, insolence, and impertinence. Patrick Ross, head of the cartoonish Copyright Alliance, seems to have chutzpah in abundance, as seen on a blog post yesterday criticizing The Center for Social Media at American University, for its release of a “Code of Best Practices in Fair Use for Online Video.” The best practices are a “Future of Public Media Project,” funded by the Ford Foundation, a fact Mr. Ross omits.

Mr. Ross is not a lawyer, but formerly was with the right wing Progress and Freedom Foundation, which usually acts as a mouthpiece for corporate copyright owners. I have no idea whether or where Mr. Ross attempts to learn about copyright law, much less fair use. For my part, I have been a practicing copyright lawyer for 25 years, and have been studying fair use even longer, beginning in law school. In 1985, I wrote my first book on copyright, which was also the first book devoted just to fair use. The treatise’s first citation was by the Supreme Court in the Harper & Row case, issued shortly after the treatise came out. Subsequently, that treatise has been cited many more times by other courts. I have testified before a joint session of the IP subcommittees of Congress on fair use, worked on amendments to Section 107 as a Congressional staffer, argued fair use cases in the courts of appeals and district courts, written an article about fair use with Judge Posner, advised many clients about it, and discussed the issue with the European Commission, and many representatives of foreign governments. I am unaware of any qualifications Mr. Ross has to talk about fair use.

Nor is Mr. Ross an educator. Yet, regarding both fair use and education, in his criticism of the Center’s Best Practices, he speaks as if he knows more than those who are copyright lawyers and educators (and some who are both), beginning with a pompous, purported correction about the nature of fair use, scolding the Center for daring to utter the term “right” in the same sentence as fair use. I describe fair use as a privilege because in a court case entitlement to it has to be proved, and in this sense it is also an affirmative defense. But the status of fair use as an affirmative defense can be overstated. Technically, it means only that an initial burden of producing evidence lies with defendant. The ultimate burden of going forward always lies with plaintiff copyright owner. Even the weight of the burden of proof can vary depending on what the particular affirmative defense is. In the case of fair use, the principle is an extremely important one, essential to the constitutional goal of copyright, and without which copyright would probably be unconstitutional. The best expression of this is in Judge Leval’s seminal article, “Toward a Fair Use Standard,” 103 Harv. L. Rev. 1105, 1110 (1990): “Fair use should not be considered a bizarre, occasionally tolerated departure from the grand conception of the copyright design.”

To me that is the key: fair use is a part of the design of copyright, it is not an exception to it, and it is not to be applied begrudgingly or narrowly, but liberally. Yes, there is an initial obligation of defendant’s part to show that application of the defense in the particular case is not b.s., but once you do that, the playing field is not only level, but both sides of the equation have very important constitutional heft to them. Viewed this way, the question of whether fair use is a right or not is a waste of time. But lacking any understanding of law (does he also think he knows more about fair use than Judge Leval?), Mr. Ross chose to lead off his blog with precisely such a waste of time, delivered in a schoolmarmish manner, an odd conceit since he is not an educator but is criticizing educators.

Mr. Ross was just warming up to his main them, namely that the Center is engaging in “dangerous” activities, whereas the Copyright Alliance is engaging in the copyright equivalent of safe sex. Here is what the Center says about its “Best Practices”:

This document is a code of best practices that helps creators, online providers, copyright holders, and others interested in the making of online video interpret the copyright doctrine of fair use. Fair use is the right to use copyrighted material without permission or payment under some circumstances.

This is a guide to current acceptable practices, drawing on the actual activities of creators, as discussed among other places in the study Recut, Reframe, Recycle: Quoting Copyrighted Material in User-Generated Video and backed by the judgment of a national panel of experts. It also draws, by way of analogy, upon the professional judgment and experience of documentary filmmakers, whose own code of best practices has been recognized throughout the film and television businesses.

WHAT THIS ISN’T

This code of best practices does not tell you the limits of fair use rights.

The Center’s Best Practices are not, therefore, legal advice, but instead an attempt to list some of the actual practices of those in the field, including, and I quote because Mr. Ross omits this, “the actual activities of creators ,” that is, those whose Mr. Ross’s organization purports to speak for but doesn't. Here is what Mr. Ross said on the Copyright Alliance’s blog yesterday about the Best Practices:

They have published a Best Practices Guide for fair use in online video. This is a dangerous effort. We at the Copyright Alliance support education on fair use and have information on our site. But our information is intentionally broad; we do not want to be in the position of giving legal advice to specific end-users of copyrighted works.
But that is precisely what the best practices guide writers run the risk of doing, although some review of the site suggests that there isn’t much “there” there. What is implied suggests a significant expansion of the current established thinking of fair use, going far beyond legal precedent. Lord help the individual who follows their guidance and finds out that just because AU says it’s fair use doesn’t mean it’s fair use.

Let’s see what this means: a guy who isn’t a lawyer, much less a copyright lawyer, thinks it is a dangerous effort for copyright lawyers, educators, and those who deal with real world fair use problems on a daily basis to address some of the common problems presented, not as legal advice, but as “best practices.” The safe sex approach, according to Mr. Ross is the type of education that Mr. Patrick’s group – a front for large corporate copyright owners – gives, namely always ask permission. I have previously blogged about the Copyright Alliances wildly one-sided view of copyright, so I won’t repeat it here. I don’t know what kind of a review Mr. Patrick Ross gave to the Center’s best practices, but I doubt it was either extensive or meaningful given the lack of a single example from the best practices themselves. He admits he only gave the Best Practices “some review,” but since he only refers to a video montage and not the practices themselves, he may have engaged in the equivalent of only reading the cover of a book.

I can say, based on my over 25 years of experience with fair use, over 25 years more than Mr. Ross has, that the site doesn’t “imply” “a significant expansion of the current established thinking of fair use, going far beyond legal precedent,” as he states. Mr. Ross’s purpose is not to engage in a constructive debate about specific examples and whether those examples are appropriately a fair use, something reasonable minds might disagree on. Rather, his purpose is to silence those who try to provide responsible, thoughtful guidance to those on the ground, and ultimately to silence those who dare to suggest there can be fair use at all.

Orit Fischman Afori

2008-07-02T22:04:00.006-04:00

I just returned from a trip to Israel, where I had the pleasure of finally meeting in person the great Israeli IP scholar and law professor Orit Fischman Afori of the College of Management Academic Studies Law School. Professor Afori is a prolific and probing writer and thinker. I don't know how she finds the time to write so much. She has a very heavy teaching load, two young children, and a very demanding husband (just kidding! Her husband Tamir is a good friend too, and is equally charming. Those who came to the last Fordham International IP conference may have heard him speak about the new Israeli fair use provision, which he was intimately involved in sheparding through the Knesset as an attorney in the Ministry of Justice).

Most of her works are in Hebrew, and I am fortunate indeed to have some of them. But we are all fortunate that she has begun publishing in English. All Israeli copyright scholars I know are fluent in English, and at the most abstract, technical levels of proficiency. Their knowledge of international and U.S. law is vast and current. Others, such as Oren Bracha and Dotan Oliar are experts on very early English and U.S. copyright law. Their scholarship and research is impeccable.

To give readers a flavor of Professor Afori's work, I will focus on three recent publications, copies of which I have provided with links. The first article is called, "Reconceptualizing Property in Designs." It is published in volume 25 of the Cardozo Arts and Entertainment Law Journal, and is available here. The article notes the ill-fit of design protection in the US, and proposes a sui generis law. She discussed other troublesome questions such as the "derivative applied art market, such as copyrighted figures from movies later on merchandized by varied industrialized products."

The second article is called"Copyright Infringement without Copying - Reflections on the Thèberge Case," and is published in Volume 39 of the Ottawa Law Review, available here. The Thèberge case is an important Canadian Supreme Court opinion involving a defendant who purchased a lawful copy of a work, modified it, and then resold it. Her article is an explication of the boundaries between the reproduction and derivative rights.

The third article is "Human Rights and Copyright: The Introduction of Natural Law Considerations into American Copyright Law," published in Volume 14 of the Fordham Intellectul Property, Media & Entertainment Law Journal, and available here. The article explores the relationship between U.S. law and the moral and economic interests of authors as possible universal human rights, principally through an analysis of Article 27 of the 1948 Universal Declaration of Human Rights; that is, "the general right to participate in cultural life; and the material and moral rights of authors with respect to their works." As she notes: "Cultural rights, like human rights in general, are based mainly on natural law philosophy, enhancing the individual rights that every person deserves wherever they are." For better or worse, and I think for the much much better, the U.S. is not a natural law country. I side with Jeremy Bentham, who said, "there is no such thing as natural property; it is entirely as creature of the law. ... Property and law were born together, and would die together. Before the laws property did not exist; take away the laws, and property will be no more." In any event, although I may not see eye to eye with her on this one, the article, as with everything she does, the article is thoughtful and well worth reading.

RIAA Ups the ACTA Ante

2008-07-02T12:08:00.001-04:00

I have heard that USTR denies that ACTA will any require substantive changes in US law. For this reason, no need to get Congress involved or to have public hearings; no need, in other words to worry. RIAA has just submitted its suggestions to USTR for what should be in the agreement. Here is a link to the full document, courtesy of Knowledge Ecology International.

There are a number of provisions that are intended to shift the financial burden of enforcing rights on to taxpayers back. There are also many that should give a great deal of pause and which would require extensive amendments to US law. Here are a few (keeping the original numbering)

Enforcement Best Practices

A.Legal Obligations

Parties shall:
…
2. Provide criminal sanctions for any act of copyright infringement that takes place on a commercial scale, including in the online environment, regardless of whether such acts are undertaken with a financial incentive.
3. Make it a criminal offense to import or export, manufacture, sell or otherwise distribute a device or system, or a component of a device or a system, knowing or having reason to know that the device or system is primarily used or designed to circumvent technological protection measures used in conjunction with materials protected by intellectual property rights.
…
5. Provide for the availability of civil and injunctive relief against landlords that fail to reasonably exercise their ability to control the infringing conduct of their tenants.
6. In territories with high rates of production of pirated optical discs, provide for a system of licensing prior to the manufacture or export of optical discs, as well as the import or export of manufacturing equipment, and manufacturing materials, including optical grade polycarbonate, "stampers" and "masters."

B. Investigatory Provisions
Parties shall:
…
5. Provide that orders by judicial authorities need not individually identify the items subject to seizure, so long as they fall within general categories specified in the order.

J. Online Infringing Activities

Parties shall:
1. Provide exclusive rights under copyright to unambiguously cover Internet use.
2. Establish appropriate rules regarding liability of service/content providers:
(a) Establishing primary liability where a party is involved in direct infringement; and ensure the application of principles of secondary liability, including contributory liability and vicarious civil liability, as well as criminal liability and abetting if appropriate.
(b) Establishing liability for actions which, taken as a whole, encourage infringement by third parties, in particular with respect to products, components and/or services whose predominant application is the facilitation of infringement.
3. Provide remedies and injunctive relief against any entity that:
(a) Creates or otherwise maintains directories of infringing materials;
(b) Provides "deeplinks" to infringing files;
(c) Commits any act, practice or service that has little or no purpose or effect other than to facilitate infringement, or that intentionally induces others to infringe (specifically allowing proof of "intent" by reference to objective standards--i.e. a reasonable person would surmise such an intent);
4. Require internet service providers and other intermediaries to employ readily available measures to inhibit infringement in instances where both legitimate and illegitimate uses were facilitated by their services, including filtering out infringing materials, provided that such measures are not unduly burdensome and do not materially affect the cost or efficiency of delivering legitimate services;
5. Require Internet service providers or other intermediaries to restrict or terminate access to their systems with respect to repeat infringers.
6. Establish liability against internet service providers who, upon receiving notices of infringement from content provides via e–mail, or by telephone in cases of pre-release materials or in other exigent circumstances, fail to remove the infringing content, or access to such content, in an expeditious manner, and in no case more than 24 hours;

or

Provide that, in the absence of proof to the contrary, an internet service provider shall be considered as knowing that the content it stores is infringing or illegal, and thus subject to liability for copyright infringement, after receiving notification from the right holder or its representative, normally in writing, including by email or by telephone in the case of pre-release materials or in other exigent circumstances.
…
8. Provide injunctive relief against intermediaries whose services are used for infringing activities regardless of whether damages are available.

10. Consideration to be given to the following: possible rules on data retention, the right to information giving right holders access to data held by ISPs in the preparation and course of proceedings including in civil proceedings, and availability of complete and accurate WHOIS data.

I'm Barking for Judge Barkett

2008-07-01T21:00:00.006-04:00

Yesterday, the 11th Circuit handed down its eagerly awaited en banc opinion in Greenberg v. National Geographic Society. By a 7-5 vote, the court of appeals did the right thing: affirm the earlier opinion in "Greenberg II," 488 F.3d 1331 (11th Cir. 2007), which had vacated "Greenberg I," 244 F.3d 1267 (11th Cir. 2001). I earlier did a post on the issues raised in the en banc appeal, so I shan't repeat them here. The majority opinion was by Judge Barkett. There was a dissent by Judge Birch, for himself and Judge Wilson, in which Chief Judge Edmonson and Judge Anderson joined only Part A. Judge Anderson also had a dissent in which Chief Judge Edmonson and Judges Tjoflat, Birch, and Wilson joined. (Figuring out the various votes would be a blog in itself). Judge Barkett's opinion is 24 pages. Judge Birch's dissent is almost twice as long, 47 pages (half of which is devoted to issues not before the court, which is why Chief Judge Anderson and Judge Wilson only joined in Part A of that opinion. Judge Tjoflat joined in Judge Anderson's dissent, but not Judge Birch's). Judge Anderson's dissent is a slim 8 pages.

Despite the fact that the court of appeals was very divided, I seriously doubt the Supreme Court will grant certiorari if petitioned: there is no split in the circuits, and the issues are very close to those decided in the Tasini case. Both Tasini and Greenberg deal with 17 USC 201(c), the scope of the presumptive privilege granted to publishers of collective works to re-use freelancers' works in republishing "that collective work" and in a revision thereof. The majority held that the NGS's CD-ROM, "The Complete National Geographic" (CNG) was a permissible revision. I would have said it was not a revision at all, but still "that collective work." The emphasis on whether a revision occurred is, for me, a holdover from Tasini's uber-complicated approach. In finding a permissible revision -- as compared to there being a "new" collective work outside the privilege, Judge Barkett rightly focused on NGS's contextual nature: the
CNG used the identical selection, coordination, and arrangement of the freelancer's contributions as found in the hard copy magazines, and was an image-based reproduction just like microfilm, even down to reproducing the magazine fold in the middle of the page and the exact same page numbers as placed originally.

What is most thrilling about the opinion is its giving meaning to Tasini's media neutral interpretation of Section 201(c), by authorizing the use of an underling computer program to search and index articles, as well as zoom and print functions, all of which had analogs in microfiche. Particularly noteworthy (see footnote 10) is the majority's rejection of ways users might hack into the NGS' contextual presentation to extract individual article.

Bravo!

Guns and Copyright

2008-06-27T08:40:00.001-04:00

Within the 157 pages of opinions in yesterday’s Supreme Court District of Columbia v. Heller opinion, upholding, as expected Judge Silberman’s opinion for the DC Circuit invalidating the DC total ban in handguns, is the issue of how we interpret constitutional clauses. Because I regard the majority opinion as 64 pages of after-the-fact rationalizing by judicial activists bent on overturning as many precedents as possible, the short answer is we should simply ignore the Court’s opinions as guides to the future, since they are all ad hoc; good, like Bush v. Gore, only for that case. But for those who disagree with this, there is exegesis that parses the Second Amendment into what is called a prefactory clause and an operative clause. The prefatory clause is merely pretty words, “Because a well regulated Militia is necessary to the security of a free State.” The real language is “the right of the people to keep and bear Arms shall not be infringed.”

Heller is of a piece with Eldred v. Ashcroft, where the Constitutional clause in Article I, section 8, clause 8 was also dissed, in that case by Justice Ginsburg’s majority opinion. The Court’s cavalier treatment of the Constitutional language as so much flotsam and jetsam transcends the Justice’s sharp political persusasions.

The Second Amendment is written quite differently than Article I, section, clause 8, because the latter actually begins with grant of the power, the power “to promote the progress of science.” No matter, though, whatever result the Court wants to reach, the troubling language will be regard as a preface or preamble, even to itself.

Article I, Section 8 is a list of 18 clauses containing enumerated powers. Each of the clauses has the same grammatical structure, in which the infinitive “to” prefaces the power granted: for example, the power to lay and collect taxes; to borrow money; to promote the progress of Science, to declare war. Most of these grants are unlimited, for example, “to establish post offices and post roads,” “to constitute tribunals inferior to the Supreme Court.” Only two clauses contain both a grant of power and a limitation thereon, clauses 8 and 15. Clause 8 is the copyright and patent provision. Clause 15 gives power to Congress “to provide for calling forth the Militia, to execute the laws of the Union, suppress insurrections and repel invasions.” The power is to call forth the militia. The limitation on that power is that the militia may be called forth only to execute the laws of the union, suppress insurrections, and repel invasions. If Congress enacted legislation authorizing the militia to be called for other reasons, like to provide members of the President's cabinet with personal bodyguards, that legislation would be an unconstitutional exercise of power under clause 15. Clause 8 works the same way: The power granted Congress is to pass legislation to promote the progress of Science. The limitation on that power is that the legislation may be for limited times, for authors, and only in writings.

The structure of Article I, Section 8 is thus clear, as is that of clause 8: a grant of power (to promote the progress of science) followed by limitations on that power (limited times, authors, writings). No one doubts that the words following “to promote the progress of science” are words of limitation. For example, the Supreme Court held in no uncertain terms in Feist that “author” and “writings” require the presence of originality as a constitutional requirement (limitation). And while there is a vigorous debate about when a term of protection is so long as to be deemed “unlimited,” all agree Congress can only enact a term of protection for “limited Times.” At least some words in clause 8, therefore, act as a substantive limitation on Congress's power. The question is whether “to promote the progress of science” also performs a limiting function, and if so, what kind of limitation.

On what basis would the limited times and originality parts of the clause act as substantive limitations but the “promoting the progress of science” not? One way is to characterize the “promoting the progress of science” language as a “preamble.” That approach absurdly separates one part of the clause from the rest: How can a single sentence of 27 words have, as a preamble to itself, its own first nine words? The purpose in calling the “promote the progress of science” language a preamble is clear enough, though: to render it meaningless, the equivalent of mottos on license plates; that is contrary to the general theory of interpretation that insists on giving every word meaning.

For the structural and grammatical reasons detailed previously, far from being a preamble, “to promote the progress science” is the grant of power itself, like clause 2, “to borrow money on the credit of the United States.” If that clause instead read “to borrow money on the credit of the United States to reduce the national debt,” it could not seriously be questioned that “to borrow money on the credit of the United States” was still the preamble and that “to reduce the national debt” was the limitation. Conversely, if clause 8 read simply “to promote the progress of science,” it could not seriously be doubted that this was a grant of power. Status as a grant of power is not altered by a limitation, in our case “by securing, for limited Times, to Authors the exclusive right to their Writings.” This final language confines Congress's power; it is not the grant of the power itself. The power is to “promote the progress of Science.” Calling that language a preamble is to ignore the entire structure and grammar of Article I, Section 8.

A preamble would be something like “whereas the promotion of the progress of science advances the general welfare, the Congress shall have power to secure to authors the exclusive right to their writings for limited times.” Note that the “whereas” would be a factual conclusion only (the progress of science advances the general welfare) and that the actual power is directly joined to “securing to authors” exclusive rights. Clause 8, however, actually reads very differently: The power is directly joined to “promote progress of science” and there are no factual statements. No clause in Article I, Section 8 has a preamble. See Walterscheid, The Preambular Argument: The Dubious Premise of Eldred v. Ashcroft, 44 Idea 331, 334–337 (2004).

Phoenixes and Quondam Clients in the First Circuit

2008-06-25T22:00:00.002-04:00

The redoubtable Judge Selya of the First Circuit has provided us with more of his literary smorgasbord in his latest copyright opinion. This opinion begins:

These appeals rise, like the mythical Phoenix, out of the ashes of a failed business relationship between an architectural firm and its quondam client. They present interesting questions concerning the application of … the discovery rule … in copyright infringement cases.

The OED gives this definition of “quondam”:

C. adj. Somewhat arch.

1. Of persons: former, one-time.

The case is Warren Freedenfeld Associates, Inc. v. Michael McTigue, 2008 WL 2469190 (1st Cir. June 20, 2008), and presents a rare reversal in a statute of limitations case. The defendant is a veterinarian who hired plaintiff to build a facility for him. After the usual falling out, there was the usual hiring of another architectural firm, which was alleged to have infringed the first architect’s work The veterinary hospital opened for business on about June 9, 2000. Four years later plaintiff, apparently an avid reader of the magazine “Veterinary Economics,” came across an article about the completed facility. The article “featured a drawing of the floor plan of the Gardner Animal Hospital and reported that the design had won a merit award.” Plaintiff obtained a copy of the building plans from the city, and sued. The defendants moved to dismiss, alleging the copyright claim was barred by the three-year statute of limitations in 17 USC 507 since the hospital has been opened for more than five years prior to the suit being filed. The court relied on plaintiff’s knowledge that defendant intended to complete the project and

that the plans for the construction were on file with the municipality and had become public records as early as the fall of 1999; that construction had proceeded using the same facade and on the same site as originally contemplated; and that after the veterinary hospital opened, it was at all times available for viewing by anyone who might be curious about its design.

The court of appeals discussion of the nature of accrual is noteworthy:

Th[e] date of accrual is not always determined mechanically; in certain circumstances, accrual contemplates application of the so-called discovery rule. Under the aegis of this rule, a claim accrues only when a plaintiff knows or has sufficient reason to know of the conduct upon which the claim is grounded. … The easy cases are those involving actual knowledge of an act of infringement. There, accrual begins with the acquisition of that knowledge; thus, computing the limitations period is simply a matter of checking the passage of time.

In the absence of actual knowledge-and there is no allegation of such knowledge in the complaint-the question becomes when a reasonably prudent person in the plaintiff's shoes would have discovered (that is, would have acquired an awareness of) the putative infringement. …

It stands to reason that determining when a reasonable person would have become aware of a copyright infringement is a fact-sensitive enterprise. Common sense suggests, therefore, that an inquiring court must explore the idiosyncratic circumstances of each individual case. One thing is clear, however: the reasonable person standard incorporates a duty of diligence. It is not a barrier to accrual that a plaintiff has failed to discover a cause of action if a reasonably diligent person, similarly situated, would have made such a discovery. In other words, a plaintiff can be charged with inquiry notice, sufficient to start the limitations clock, once he possesses information fairly suggesting some reason to investigate whether he may have suffered an injury at the hands of a putative infringer.
But the duty to investigate is not always in the wind. Typically, inquiry notice must be triggered by some event or series of events that comes to the attention of the aggrieved party. The familiar aphorism teaches that where there is smoke there is fire; but smoke, or something tantamount to it, is necessary to put a person on inquiry notice that a fire has started.

It is interesting that while the court noted (in footnote 3) the controversy about whether the discovery rule is still valid, it felt it didn’t have to address it. Why not?

In reversing the trial court, Judge Selya found that there was “no triggering event-some sign of storm clouds gathering on the horizon … .” This is surprising in light of the “frayed relationship” between the parties and defendant’s letter stating that he intended to complete the building. A counter, noted by Judge Selya, is that an intention to proceed did not mean an intention to proceed in an infringing way. Judge Selya also noted defendant has claimed that plaintiff’s plans the plans and drawings were “useless” and had been “discarded”- and that he would have to spend “tens of thousands of dollars” for a new architect.

Plaintiff could have easily discovered the infringement if it had reviewed the filed plans or viewed the completed structure, both of which would have represented the reasonable exercise of diligence. The case may have been close on the facts, but merely from reading the court of appeals’ opinion, I lean toward the district court’s view.

Progress and Freedom Foundation Jammie Thomas Brief

2008-06-24T22:32:00.004-04:00

There are other amicus briefs in the Thomas case besides the MPAA’s that take utterly baffling positions. One was filed by the Progress and Freedom Foundation. (As wikipedia notes, in admirable transparency PFF posts on its website the names of its corporate sponsors). Mr. Thomas Syndor of the PFF posted the group’s brief on their website he also has a column about further research he did. Here is the relevant quote from his column:

Before filing a proposed amicus brief in Thomas, l analyzed whether the Thomas Court was bound by National Car Rental to reject its own jury instruction and grant a new trial. My analysis indicated that the Court was not bound by National Car Rental.

But further research now suggests that I underestimated the implications of this analysis. As applied to the case cited by Thomas, this analysis shows only that National Car Rental is not a binding precedent. But when applied generally, it seems to show that a different judicial decision is a binding precedent--and one that would require all federal district and circuit courts to hold that the Copyright Act grants copyright owners a making-available right. Consequently, courts may be struggling needlessly with questions about whether the Copyright Act grants a making-available right. This paper seeks to explain why.

Analysis Indicates that National Car Rental Is Not Binding Precedent in Thomas: National Car Rental involved a claim that the Copyright Act preempted any state-law claim asserting that National had breeched a software-licensing agreement that prohibited use of the licensed software to process data for third parties. 991 F.2d at 427-28, 431. National argued that because this prohibition barred it from "distributing" the "functionality" of the licensed software to others, it was "equivalent" to the distribution right. Id. at 434. The Eight Circuit rejected this argument for three reasons:

First, National cites no authority in support of this proposition. Second, even with respect to computer software, the distribution right is only the right to distribute copies of the work. As Professor Nimmer has stated, "infringement of [the distribution right] requires an actual dissemination of either copies or phonorecords." 2 Nimmer on Copyright § 8.11[A] at 8-124.1. Finally, courts have specifically held that copyright protection does not extend to the software's function. Thus, even if CA could be said to have alleged that National "distributed the functionality" of its program, such a claim would not protect a right equivalent to one of the exclusive rights in copyright.

The language that might bind the court in Thomas is the Nimmer quotation in the third sentence: If an infringement of the distribution right requires "actual dissemination," then unauthorized sharing or posting of a file on the Internet or a file-sharing network could not--in itself--infringe the distribution right. Were that the law, then the jury instruction in Thomas might be erroneous. The critical question is thus whether the Nimmer quote acts a precedent that binds lower courts. It might lack precedential value for either of two reasons.

I am utterly baffled by Mr. Thomas’s remarks for a number of reasons. Here are two: the National Car Rental court’s decision was based on the plain language of the statute, which limits the distribution right to distribution of copies, as the court noted. I had thought that conservatives and libertarians were supposed to be strict constructionists, folks who disliked “activist” (read liberal) judges. Courts are supposed to take the law as Congress wrote it and not “make law” by substituting Congress’s judgment for their own. The plain meaning rule is the check by which this occurs. Well, the plain meaning of the statute requires the distribution of copies, and copies are defined as physical objects. The statute could not possibly be clearer. That’s one reason the RIAA should lose: it has no proof there was ever a distribution of a physical object, a copy. Forget policy arguments; that’s what the statute says. Everything else (including many of the amicus briefs) are irrelevant.

The other baffling thing is the idea that anything Nimmer (or any treatise writer including myself ) could say be binding on a court. To try and gut an actual holding by a court that cites to and construes the precise words of the statute by claiming that the holding is a quote from a treatise writer is laughable. I should be so lucky!

But there is more. The PFF argues that it is the Supreme Court’s opinion in Tasini, not National Car Rental that governs because, it says, Tasini found (for some of the conduct) violation of the reproduction right and the distribution right. OK, but there was no question in Tasini that actual physical copies of the articles were distributed. Tasini has no relevance whatsoever to the issues in Thomas.

MPAA’s Brief and the Charming Betsy

2008-06-24T10:50:00.002-04:00

The MPAA’s amicus brief in the Thomas P2P case in Minnesota has received a lot of publicity. What does the MPAA brief say? There are two parts to the brief. First, the MPAA takes the position that existing, domestic U.S. copyright law already incorporates the MPAA position. Second, and as an alternative, MPAA argues that domestic U.S. law should be construed to adopt its position because a failure to do so will place the U.S. in conflict with its supposed international obligations. All parts of the MPAA’s arguments are wrong: existing U.S. law rejects the MPAA position, international agreements do not adopt the MPAA position, and even if they did, U.S. law cannot be changed by the courts to make it fit such international obligations.

It is telling that the MPAA leads with its international arguments. One usually leads with what you believe to be your strongest argument. The converse of this is that you downplay your weakest argument. In this case, the MPAA must regard its construction of domestic law as its weakest, and is therefore asking the court to effectively enact its view of what the law should be, but isn’t. Separation of powers appears to be as outmoded as the threshold requirement that copyright owners prove infringement.

The MPAA’s international argument is based on two poles: first, the 1996 WIPO treaties, which do mandate a making available right, also mandate the MPAA’s interpretation of that right. No evidence of this is presented. Where in the treaties does it mandate that countries dispense with the requirement – which has existed from the beginning of copyright in the U.S. – that the copyright owner prove one of its rights has been violated? The MPAA declares that “A violation of the making available right does not require that copies were actually transferred to particular individuals,” Brief page 7, but supplies no support for this. There is simply no support for the position that countries, in implementing a making available right, must dispense with any evidence that copies were obtained by others. Countries are free to require such proof.

It is the nature of international agreements that they set forth broad concepts, leaving it up to national legislatures to fill in the details consistent with their local laws. U.S. law has long required actual distribution to violate the distribution right. If such a radical change was to be made, it could only have been made by Congress. The U.S. Congress was assured that no changes were necessary to adhere; in none of those assurances was Congress told that the treaties would dispense with the requirement of proving an actual distribution occurred in order to violate the making available right. MPAA’s position, in short, is that the making available right is synonymous with no proof of an actual distribution, but it comes up short in proving that was the case. Indeed, the Hotaling case, much relied on by the industry, has been roundly criticized by copyright scholars and by courts. If the MPAA’s view of U.S. law were accurate, Hotaling would have been non-controversial.

Because countries are free to require such proof, the MPAA’s argument that U.S. law must be construed (read: rewritten) to dispense with such proof also fails. But even here, the MPAA brief overstates its only authority, Murray v. The Schooner Charming Betsy, 6 U.S. 64, 2 L. Ed. 208, 1804 WL 1103 (1804). In The Charming Betsy, the Supreme Court, per Chief Justice John Marshall, held that “a statute ought never to be construed to violate the law of nations, if any other possible constriction remains.” The opinion only applies when a statute is ambiguous. It has no application when a statute is clear but conflicts with international norms. The Charming Betsy is merely a canon of construction; it is not a substantive legal doctrine. This all the more so because the WIPO treaties are not self-executing.

The MPPA and RIAA approach is to try and get through the courts what they would be unable to get through Congress because of the backlash and opposition. Let’s hope the courts resist the temptation to be legislators.

Pink Panther: Oregon No Longer Wacka Wacka Huna Kuna

2008-06-23T10:02:00.005-04:00

The Pink Panther
On Thursday, the Ninth Circuit issued its opinion in a dispute over rights to a 1962 story treatment for the movie “The Pink Panther.” Co-author Maurice Richlin had transferred his rights to the Mirisch Corporation, which made The Pink Panther. (The other co-author was Blake Edwards). Richlin’s heirs asserted he was a co-author of the film (through two routes). The district court rejected the heirs claims and the court of appeals, per Judge Wardlaw affirmed.

One can appreciate the heirs' view that they might have some rights. Richlin and Edwards first wrote a treatment. Then they entered into a work for hire agreement with Mirisch for the screenplay. Ten days they later executed a broad assignment that included the treatment. The treatment was never registered. The movie came out in 1963 and bore a notice with that year date, but the certificate of registration gave 1964 as the publication date. Richlin died in 1990; the film was renewed in 1991. Richlin heirs did not assert a renewal right at that time.

The court rejected the claim that co-authorship in the treatment vested Richlin (and his heirs) with a co-ownership claim in the movie, noting among other facts, that Richlin (unlike Edwards) did not exercise control over the creation of the movie. This seems correct to me.

The opinion also revisits ground thoroughly plowed in Batjac Productions Inc. v. Goodtimes Home Video Corp., 160 F.3d 1223 (9th Cir. 1998), regarding the status of an unpublished screenplay and its publication in the movie based on it. The court of appeals recited that Richlin's heirs abandoned an argument that publication of the movie and renew of it also renewed their interest in the treatment, since the treatment was not renewed and therefore would have fallen into the public domain (to the extent contained in the movie). But the nature of the heirs legal claims -- common law or statutory -- can't alter the legal fact that the treatment was published when it was included in the motion picture with permission, to the extent the movie incorporated those elements, and there was no allegation that the elements of the treatment outside of those contained in the movie were otherwise copied.

I may once again (this is a revised post in light of a helpful Anonymous comment) be missing something, but I still don't see why the Richlin case breaks any new ground

Oregon
Meanwhile in another state within the Ninth Circuit, Oregon, the Legislative Counsel Committee voted unanimously not to assert their alleged copyright claims. Kudos to Carl Malamud and many others who participated in the hearings and in raising the issues. Carl has posted videos of the hearings here, itself a wonderful example of open government.

Gender and Copyright

2008-06-20T10:29:00.002-04:00

A powerful metaphor employed to argue that authors should have extensive control over the works they create is the metaphor evoking the relationship between an author and the author’s works as that of a parent-child, called the creation-as-birth metaphor. The metaphor is used in many areas besides copyright. Here are some examples:

Our nation was born out of a desire for freedom
Her experiment spawned a host of new theories
Your actions will only breed violence
He hatched a clever scheme

And most on point:

Her writings are products of her fertile imagination

The creation-as-birth metaphor posits an intimate connection between what an author creates and his or her work. It would therefore be a violation of the author’s very person to use his to her work without permission. Feminist legal writers have explored the personhood metaphor as it is used in copyright. Professors Ann Bartow and Rebecca Tushnet have done excellent work in the areas, as have others, see e.g., Symposium on Feminism and Dualism in Intellectual Property, 15 American University Journal Gender Social Policy & Law (2007); Malla Pollack, Towards a Feminist Theory of the Public Domain, or Rejecting the Gendered Scope of United States Copyrightable and Patentable Subject Matter, 2 William & Mary Journal of Women & The Law 603 (2006). See also Christine Battersby, Gender and Genius: Toward a Feminist Aesthetic (1989), and Richard Swartz, “Patrimony and the Figuration of Authorship in the Eighteenth-Century Literary Property Debates,” 7 Works and Days 2 (1989) for a discussion of the gendering of authors as males.

In asserting the birthing metaphor as a justification for a strong copyright regime, proponents of the metaphor hearken back to pre-copyright days, since for any metaphor to work in a new context, it has to be based on pre-existing associations. The birthing metaphor is quite ancient. In his “Symposium,” Plato had Diotima describe poems created by Homer and Hesiod as their intellectual children, even greater than actual children.

Daniel Defoe spoke of his book as the “Brat of His Brain. For Defoe, the brain was regarded as the womb of thought, See Walter Pagel, “Medieval and Renaissance Contributions to Knowledge of the Brain and Its Functions,” reprinted in The History and Philosophy of the Brain and its Function 95 (Poynter ed. 1958), thereby metaphorically overcoming the obvious biological objection to Defoe metaphorically birthing anything, but raising other issues, which Mark Rose has explored in his fascinating article, Mothers and Authors: Johnson v. Calvert and the New Children of Our Imagination, 22 Critical Inquiry 613, 622 (1996).

Is there a gender difference in how we react to copyright proposals? The recently introduced and highly controversial Canadian copyright reform bill, C-61, provides a surprising look at this, thanks to a survey done by AngusReid Strategies (see here). The survey shows significant regional, age, and educational differences:

Canadians are clearly divided on the proposed changes, with 45 per cent of respondents supporting the amendments, and another 45 per cent rejecting them. One-in-ten (10%) are undecided.

Regionally, British Columbia (52%) and Alberta (48%) show the most resistance to amending the Copyright Act , while Quebec (53%) and the Atlantic Provinces (50%) are the most encouraging of tougher copyright infringement laws. In turn, Manitoba and Saskatchewan (21%) house the most respondents who are unsure on the issue.

The large disparity among respondents in each of the different age and education groups is particularly interesting. The survey reveals that a majority of Canadians over the age of 55 and those with a high school diploma or less are clearly in favour of the amendments to the Copyright Act. Sixty-one per cent of older Canadians support the new changes, while only 23 per cent of those aged 18 to 34 and 47 per cent of those aged 35 to 54 feel the same way.

Canadians with a high school diploma or less are also very supportive of the stricter laws—55 per cent say they support the anticipated changes, compared to 40 per cent of those with a college or technical school diploma and 40 per cent of those with at least one university degree.

Michael Geist points out another result in his blog: “Men oppose the legislation 49 to 33 percent, while women are split 31 - 29 in favour with the largest number (40 percent)

A Model Opinion Affirmed

2008-06-18T10:42:00.002-04:00

On October 4, 2006, I did a blog on a district court opinion in Utah holding, on summary judgment, that computer modeling of Toyota cars did not meet the requisite standard of originality. I was surprised by the opinion. The Tenth Circuit unanimously affirmed yesterday in a well-written and persuasive opinion by Judge Gorsuch, Meshwerks, Inc. v. Toyota Motor Sales, U.S.A., Inc., (Docket No. 06-4222). The opinion contains appendices with pictures that are helpful. I still have doubts about the result, but now believe it a closer question than I previously thought.

The relevant facts are these: for the introduction of its 2004 Toyota hired the advertising company of Saatchi and Saatchi; both companies agreed the campaign would involve digital models that could be used on Toyota’s website and in other media. Toyota and Saatchi hired Grace & Wild to supply the digital models. G&W in turn subcontracted with plaintiff Meshwerks to do some, but not all of the work, in producing the final digital models: Meshwerks would do the digitization and basic modeling; G&W would then take Meshwerk’s work and add details, as well as color, texture, lighting, and animation. The suit arose over a dispute about the scope of the license granted by Meshwerks.

To perform its part of the ultimate product, Meshwerk employees began with the actual cars. The employees put tape on the cars in a grid pattern. Each point of an intersection of the grid was marked by a mechanical arm, to which a computer was attached, resulting in a file of data points. Using off-the-shelf software, those points could be opened up, and once opened up an image of the car would appear. It is undisputed that it took Meshwerks 80 to 100 hours to produce a model for each care; it is also undisputed that Meshwerks altered over 90% of the data points collected during the original digitization process, in order to get a model that looked as much as possible like the actual car. Some elements of the car had to be created from scratch.

If one were to apply a labor theory of originality, there is no doubt Meshwerks would meet that standard. But the labor theory was rightly rejected by the Supreme Court in its 1991 Feist opinion. Two factors were of critical importance to the Tenth Circuit in affirming the district court’s grant of summary judgment to defendants (1) G&W, not Meshwerks made all the decisions regarding “lighting, shading, the background in front of which the vehicle would be posed, the angle at which to pose it, or the like; (2) Meshwerks’ purpose was to “depict nothing more than unadorned Toyota vehicles, the car as car.”

On this last point, the pictures in the appendices help. I agree that if the final result is not copyrightable, it doesn’t matter how much labor or skill went into production of the models. The use of off-the-shelf software to produce the data points did not result in a copyrightable work; instead, the originality, if any, must be found in what Meshwerks did after the original digitization and before G&W took over and added more traditional creative elements. The court of appeals seemed to think that Meshwerks’ contributions were taken the unprotectible data points and then tweaking them so that they looked as close at possible to the real car, an effort in found to be unoriginal under Feist, regardless of how many hours it took.

I am more sympathetic to this view than I was before, but I am still bothered by the premise that efforts to realistically depict an actual object are unoriginal. Superrealist oil paintings are an obvious example. I have a few posters of them, and if you don’t look closely you think it was a photograph. Photographs are of course protectible, usually, due to the lighting, shading, angle and other choices. But in Meshwerks those choices were made by G&W, and this is what seemed to persuade the court of appeals Meshwerk’s contributions were unoriginal.

If I was still writing casebooks for law school classes, Meshwerks would be a must for inclusion in the next edition.

The Fifth Circuit: Section 411(a) Revisited

2008-06-17T07:48:00.002-04:00

Alone among the circuits, the Fifth Circuit has chosen to follow Nimmer’s anti-statutory view that actual receipt of a certificate of registration – as opposed to merely sending in an application – complies with the requirement in subject matter jurisdictional requirement of Section 411(a). There are limits, though, even in the Fifth Circuit. For example, you do have to apply before trial. It now appears you have to do more than that. A recent opinion indicates that the requirements may be not as loose as I had previously thought.

In Trill Entertaiment, LLC v. B CD Music Group, 2008 WL 2354424 (M.D.La. June 9, 2008) (Civil Action No. 07-559-JJB-SCR), plaintiff sued over a number of works with descriptive titles such as “Bas Azz Mixtape,” “Streetz is Mine,” and “Gangsta Grillz.” Plaintiff had received certificates for some, but not others, and had amended its complaint indicating receipt of the certificate as to some but not at to others.

In reviewing the state of the case law on section 411(a) in the Fifth Circuit, the court held:

In limited circumstances, the Fifth Circuit has allowed a plaintiff to cure the jurisdictional defect of failing to register a copyright before commencing an action by subsequently amending or supplementing its complaint after registration is completed. Positive Black Talk, Inc. v. Cash Money Recordings, Inc., 394 F.3d 357, 365 (5th Cir.2004) (allowing a plaintiff who filed a copyright action four days before registering with the U.S. Copyright Office to cure the defect). Although the Fifth Circuit made an exception to the statutory filing requirements in Positive Black Talk, this case “is not a blank permission slip for district courts to disregard pleading failures in copyright claims.” The Levingston Corp. v. DeWalyes Ltd. Int., 2008 U.S. Dist. LEXIS 12327, *5 (E.D.La.2008). This jurisdictional defect can only be cured by registering the copyright and amending the complaint. Id . In other words, “Evidence that the Copyright Office has received the application-no matter how reliable-does not substitute or obviate the plaintiff's obligation to amend the pleadings.” Id. Therefore, contrary to the plaintiff's assertion that all that is necessary for the suit to proceed is evidence that the “application, deposit and fee payment have been received by the Copyright Office,” courts in the Fifth Circuit have required the plaintiff to cure this jurisdictional defect by subsequently amending the complaint to reflect registration with the U.S. Copyright Office.

As such, Trill's recent registration of “Streetz is Mine” and “Bad Ass Mixtape” on June 3, 2008, is clearly at odds with the jurisdictional requirements of § 411 and Fifth Circuit jurisprudence on this issue. These recordings should have been registered with the U.S. Copyright Office prior to commencing the instant action, or in the alternative, these jurisdictional defects should have been cured by registration and subsequently amending the complaint. Trill has not amended its complaint to indicate the date of registration, and it has only sent off its registration one week before the scheduled bench trial on June 11, 2008. With respect to recordings “Bad Ass Mixtape” and “Streetz is Mine,” Trill has failed to demonstrate that it has satisfied the jurisdictional requirements necessary to bring an infringement action, and summary judgment in favor of B C D Music Group will be granted for these recordings.

Post-Registration Statutory Damage Awards

2008-06-16T10:13:00.003-04:00

Section 412 of the Copyright Act acts as a brake on statutory damages awarded under Section 504(c). Section 412(2) bars an award of infringement for

any infringement of copyright commenced after first publication of the work and before the effective date of its registration, unless such registration is made within three months after the first publication of the work.

For United States works, since registration is a prerequisite to protection, it happens on occasion that acts of infringement occur both before and after registration. Section 412, however, is unrelenting: if the copyright owner doesn’t register before any act of infringement occurs, no statutory damages may be awarded, period. Since its inception, plaintiffs who have run afoul of Section 412 have attempted to get around it without success. The Ninth Circuit had not addressed the provision in the context of post-registration infringement until this month, in Derek Andrew, Inc. v. Poof Apparel Corporation, 2008 WL 2357378 (9th Cir. May June11, 2008)(No. 07-35048).

The suit involved a backdoor effort to stop defendant from selling lower-priced versions of plaintiff’s (uncopyrightable) clothes though infringement of a hang-tag affixed to that clothing. As described by the court, “Poof’s hang-tags nearly are identical to Andrew's ‘Twisted Heart’ hang-tags, the only difference being the word ‘Poof!’ in place of the words ‘Twisted Heart.’” After a cease-and-desist letter was sent, Poof is reported to have comply with plaintiff’s demands, but “failed to remove the garments bearing the infringing hang-tag from stores.” Plaintiff sued, defendant defaulted on liability, and a bench trial on damages took place. The trail judge awarded plaintiff $15,000 in statutory damages because Poof distributed clothing bearing the infringing hang-tag after the effective date of the registration. Poof appealed.

In reversing, the court of appeals looked to other court opinions and what it perceived to be the purposes of the statute: (1) “to provide copyright owners with an incentive to register their copyrights promptly; (2) to “encourage[] potential infringers to check the Copyright Office's database. The first stated purpose is dead-on; the second seems questionable. What would one be encouraging potential defendants to check the Office’s records for? In Poof’s case, there was no doubt who owned the work. In most cases there isn’t. The record checking rationale would only apply in those few cases where infringement turns on an ownership dispute, but even in those cases, since the Copyright Office is an office of record only, the presence of another claim of ownership does not mean the claim is ultimately valid.

In any event, the court held, correctly

[W]e join those circuits that addressed the issue before us and hold that the first act of infringement in a series of ongoing infringements of the same kind marks the commencement of one continuing infringement under § 412. This interpretation, we believe, furthers Congress' intent to promote the early registration of copyrights.

This conclusion rightly led to vacation of the award. Savvy readers might say, but didn’t it cost more than $15,000 to prosecute the appeal? Indeed, but defendant also got the attorney’s award vacated, and award that was much higher than the statutory damages award.

Guest Blog: Josh Wattles and Compulsory Licensing

2008-06-13T07:15:00.004-04:00

Back in April, I did a post on a new reverse value theory. Josh Wattles, a friend and lawyer in Los Angeles with long, vast experience in the copyright and entertainment fields, made some comments. Offline, we talked about him writing a longer piece, and maybe doing a guest blog. He has now done so, and here it is:

Josh Wattles

The process of fixing prices and terms under compulsory licenses in the Copyright Act needs change. Streamlining is not a meaningful option but better participation by the government to represent the public interest might go a long way in producing useful results.
Compulsory licenses are born in politics. They are compromises.

Every compulsory license is also an admission of failure - - a confirmation that neither the market nor the rights of copyright owners are flexible or efficient enough to permit a common place licensing structure or to avoid the compulsory approach.

On principle a compulsory license should occur only at last resort and from absolute necessity after a proof of market failure and a need for the statute to intercede. Most, however, have nothing to do with lofty aspirations of balance or with enabling an otherwise impossible market or even with a measured response to benefit a clamoring public. Instead, they have everything to do with power players reaching for commercial advantages within a niche market. A compulsory license can even be a feint at its obvious purpose, price setting: neither the commercial user group nor the copyright owner group wants to actually rely on the license or its price because they just want to set a ceiling or set a default to stage private side arrangements.

Compulsory licenses aren’t conceptually challenging, like fair use is, and they are never intellectually amusing once drafted. They are brutishly commercial in purpose and in application - - and painful to read. The compulsory licenses from the recent past were drafted by skilled lobbyists and lawyers and the result suffers from a lack of simplicity and economy. Finding out what the license covers or how it can be triggered is like tracing a tan-colored line through the Pismo dunes. Try §119, the compulsory and statutory licenses for cable and satellite retransmissions.

Compulsory licenses are apparently haphazard: there is a compulsory license you can use to carry some broadcast signals on cable, but not all; or there is a compulsory license to use the underlying music in a recording but not to use another recording; or there is a statutory license for non-interactive webcasting if the service doesn’t repeat songs too often or play albums in sequence; and so forth. This happens because compulsory licenses are designed not as market solutions but as small nips and tucks that ease other commercial uses of copyrighted content without anyone losing out on important parallel interests.

Because a compulsory license comes out of a political process you would think ultimately a deal was made at some level. But as it turns out, increasingly the “license” is just a set of rules for a follow-on process - - a rate setting proceeding before a Copyright Royalty Board itself generating reams of spinfastic briefings, dueling economists and industry experts, with live testimony and written submissions. In a proceeding designed to set a “market rate” equivalency which would ultimately be openly published, the CRB procedures nonetheless permit liberal, secret submissions of the parties’ pricing activities on the ground of commercial sensitivity. All struggle in the CRB forum to apply various standards of review left intentionally vague in the statute as a result of prior failures to arrive at compromises on clear guidelines. A CRB decision is inevitably appealed by disgruntled parties - - which can mean everyone who was there. The whole process is petty and overdrawn favoring in outcome those most capable of withstanding the tedium and boredom.

There is no mystery in how the process became so over-wrought. It is a result of serial manipulations by well funded commercial interests seeking wholly appropriate advantages over competitors, suppliers or customers. Sometimes they trip over each other and themselves. AOL argued the user side and Warner Music Group argued the copyright owner side of a webcasting proceeding back when they were both owned by Time Warner. Those subsidiaries also lobbied on opposite sides to produce the statute giving rise to that compulsory license.

A Congressional committee is currently sponsoring private negotiations towards a revision of the compulsory that sets the price for the use of a musical work in a recording or in a download. There, the four largest music publishers are up against the four largest record companies - - well, not really, because each of these is a perfect pair. The four largest record companies also own and control the four largest music publishers. All eight enjoy a combined market share of around 70% to 80% of all music. As close as they are as family, the record companies and their music publishers have managed to tied up the committee and the Copyright Office for years trying to broker terms for their latest “compulsory” license.
There is no shame certainly among the participants about any of this gaming for advantage. In fact, it seems certain that more compulsory and statutory licenses with the same structural defects will be used with still more twists and tweaks hoping to tip the outcome. Almost every discussion of licensing Internet-based distribution ends up with a compulsory or statutory license proposal.

Most proposals for compulsory licenses argue the commercial case - - why that particular market segment needs unitary licenses or set prices- - and they might argue the social utility of the license - - providing full access or some other benefits for end-users. But inevitably when it comes to process there is less focus. The CRB has gone through a variety of iterations. Still procedural issues come up by and large as efforts to tip the scales more than to protect the scales from tampering.

So, if gaming is inevitable across the board, why not let us all in to play?

Here is the opening salvo for reform.

First, if you are going to throw in the towel on making an open, free market deal and use the government to impose one, then the government should be a continuing party in interest and not just a rental hall where the negotiation takes place. The DOJ should be in every compulsory license proceeding with the brief to protect the commercial fairness of the outcome. Second, the people should be openly invited too. Of course, it’s so crushingly boring the public would never come, so the FTC should be in every proceeding as well with the brief of representing the interests of end-use consumers.

Some reasons for the DOJ to be in the room: (1) Every compulsory license is by definition anti-competitive in origin. It exists because there was no competitive milieu in which an adequate license could be fashioned. (2) Ultimately, every compulsory license results in an aggregation of commercial users, an aggregation of owners or both to argue the rate and to distribute the proceeds of the license. These are powerful collectives inherently capable of mischief. (Some like ASCAP and BMI are already under court supervision as an antitrust matter; but other more ad hoc collectives are not, such as SoundExchange.) (3) These collectives carry even greater market power because they enjoy broad statutory anti-trust exemptions in order to participate in the rate setting process. (4) Finally, all compulsory licenses impact businesses well beyond the scope of the license itself. Someone needs to take a long view inside the rate proceedings to argue the impact of price and terms on competitiveness and on adjacent open markets. That isn’t happening now.

Protecting end-users would seem to be an even more self-evident requirement in setting rates and terms under compulsory licenses. The whole purpose and logic of permitting a compulsory license has to do with creating efficiencies so that the general public benefits through access and, one would hope, fair pricing. The compulsory license should meet this goal by creating order where otherwise there would be a distribution bottleneck. But the statute sets up a false bargaining process in which owners and users debate the appropriate terms and rates before a tribunal that has only loose instruction (and at times none) on protecting the public interest on price and terms. The process assumes the commercial parties act as surrogates for the end-user consumers and assumes that the general public itself is unaffected.

For example, a statutory standard to be followed in a couple of the compulsories is establishing “rates and terms that most clearly represent the rates and terms that would have been negotiated in the marketplace between a willing buyer and a willing seller.” §114(f)(2)(B) and §112(e)(4). Leaving to one side that, by definition, a compulsory license would not and cannot be negotiated in the marketplace at all precisely because the market doesn’t impose any price or term by compulsion, the standards of review in §114 have no care as to whether the public is served by the resulting rates and terms.

The CRB is not generally charged, as it should be, to arrive at a price and at terms that the public itself might want and might accept or that might spur further entries into the market in order to benefit public choice. In some instances, the distributors and the copyright owners have no obligation to show the CRB that the resulting compulsory pricing would actually fly with any end-user consumer. But just stating these as factors that the CRB should consider without providing advocates leaves open the question of how the judges would go about gathering appropriate evidence, surveys and expert opinions. If there were organized consumer groups we could give them standing to argue their interests. But it is too much to ask, particularly in emerging markets, that consumers either organize or loose at the table. The FTC should do it for them and provide the analytical expertise to learn the market and raise adverse impacts.

The basic premise of a real marketplace is that either side can just walk away. A compulsory license changes that critical dynamic. Once gone, the parties can’t battle things out by themselves in front of an arbitrator to produce even a mock negotiation. Instead, licensing authority needs to be exercised by the CRB on a fully informed, not just partisan, basis.

Gordon Duggan's Great Comic

2008-06-12T07:23:00.005-04:00

The Canadian government has announced it will introduce (as we Yanks say) its long-anticipated copyright reform bill this morning sometime before 11 a.m. To wile away the time before then, I strongly suggest reading the most amazing piece of public policy advocacy I have ever seen. Mixing Thomas Nast with superheros comics, Gordan Duggan, a Canadian artist who works with the Appropriation Art collective, has just "published" a pdf comic called 51st State. The comic book details the fight for Canadian sovereignty in the face of overwhelming American interests and pressure. He describes it as "a bit ironic."

The comic book is entirely constructed of found quotes and images, making it a fantastic blend of original art work and appropriation of others' materials. If this is all the comic book was, it would be enough, but its not: there are 193 links to blogs, articles, video, etc.; every balloon and caption has at least one link that is activated by clicking on the balloon. The work is an extremely clever use of traditional comic book art and Internet technology. One of the links I found interesting is to an interview in CBC Arts with Steven Page, lead singer for the group Barenaked Ladies. In the interview, Mr. Page states: "For a very long time, we – as artists – have allowed industry groups to speak on our behalf. We want that time to stop." Take that flatulent Copyright Alliance! Songwriter Andrew Cash is quoted as saying: "The music business has spent so much creative energy and money fighting instead of taking a look at what fans are really doing and trying to find a way to swim with it." Canadian artists are said to be seeking a cooperative approach that incorporates emerging technologies, rather than a combative plan of attack. Mr. Page added, "We cannot afford to have an adversarial relationship with our fans. New technology affords fans new ways to listen to music. We as artists... must adapt to that. "To say, 'See you in court,' and then, 'See you at Massey Hall,' isn't going to work."

Another link is to an article by Mr. Duggan, in which he comments:

For many creators more restrictive copyright is neither desirable nor beneficial. For many artists freedom of expression includes freedom to access preexisting culture. One could argue that freedom in Canada is rooted in the notion of freedom through access: access to education, access to health care, access to government. In the United States freedom appears to be freedom through domination: domination through litigation, domination through military, domination through rhetoric. Disentangling Canadian law from American rhetoric is essential in understanding what rights we have as Canadian artists, how these rights affect our work and what changes are needed. Copyright legislation in Canada has largely been artist-driven. In the U.S. copyright has been driven by corporate interests.

These remarks explain why the fight over Canadian legislation has generated so much grassroots support, but it also says a great deal about how we in the U.S. suffer from the way trade associations have been successful in positioning themselves as the representatives of authors, musicians, and artists, and it explains why I repeatedly point out the callow nature of the so-called Copyright Alliance: the statement that that organization speaks for 11 million of the real creators and that it speaks for them with one voice, is obscene, and is intended to keep creators barefoot, pregnant and in the kitchen. All of us, in every country, have a stake in Canadian authors, artists, and musicians succeeding. They are fighting the good fight that seems lost in the U.S.

The comic is available here. It works best you download the pdf to your harddrive. Mr. Duggan's work is an amazing accomplishment.

First Sale Victories: Quanta v. LG, UMG v. Augusto

2008-06-11T08:54:00.007-04:00

The last two days have delivered significant victories for the first sale doctrine. On June 9th, a unanimous Supreme Court, per Justice Thomas, decided Quanta Computer, Inc. v. LG Electronics, Inc., No. 06-937. The case has no direct application to copyright, and turned on two issues: does first sale apply to method patents, and did the license in question prohibit the combination of a licensed patent with non-licensed material? Reversing the Federal Circuit (yet again), the Court answered these questions, respectively, yes, and no. The significance of the opinion to copyright lays in the philosophy expressed in the opening of the final paragraph of the opinion:

The authorized sale of an article that substantially embodies a patent exhausts the patent holder's rights and prevents the patent holder from invoking patent law to control postsale use of the article.

Yesterday, Judge Otero of the Central District of California granted summary judgment in the a promo CD case, UMG Recordings, Inc. v. Troy Augusto, No. CV 07-03106. (SJO). Bravo to EFF and HT to Fred von Lohmann. Mr. Augusto acquired promo copies of CDs that Universal had given to "music insiders." The promos had this language on them:

This CD is the property of the record company and is licensed to the intended receipient for personal use only. Acceptance of this CD shall constitute an agreement to comply with the terms of the license. Resale or transfer of possession is not allowed and may be punishable under federal and state laws.

Mr. Augusto put his copies up for sale on eBay. UMG complained through eBay's Verified Rights Program and had Augusto's auctions suspended, although they were later reinstated. Augusto asserted that his sale was privileged under the first sale doctrine, were a gift under 39 USC 3009, and that UMG had abandoned its rights. The court ruled for Augusto on the first two arguments.

On the first sale point, Judge Otero, following Microsoft Corp. v. DAK Industries, 66 F.3d 1091, 1095 (9th Cir. 1995), analyzed whether a sale or a license occurred by examining the economic realities of the transaction and not whether it was labeled a license. Under those realities, it was significant that UMG gave away the promos without any expectation that they would be returned and with no effort to have them returned. Nor did UMG receive any recurring benefit after it had mailed the promos. The only possible benefit was a prohibited one, an attempt to restrain transfer of the object, something the court noted "had been rejected 100 years ago by the Supreme Court." Accordingly, the transaction was deemed to be a sale not a license, UMG was deemed to have transferred title to the copy, and first sale applied.

The first sale ruling is correct all on fronts. The only question is why are such suits brought? With the record industry's relationship with consumers in tatters, and the economic value of stopping the sale of promos infinitesimal, why further alienate consumers, play into people's worst depictions of the industry, and waste so much money on attorney's fees and costs of monitoring eBay? Why not spend that money developing new acts?

The Copyright Alliance Thinks It's Bob Marley

2008-06-10T07:45:00.005-04:00

Bob Marley’s classic song “One Love” begins:

One love, one heart
Let's get together and feel all right
Hear the children crying (One love)
Hear the children crying (One heart)
Sayin', "Give thanks and praise to the Lord and I will feel all right."
Sayin', "Let's get together and feel all right."

The Copyright Alliance apparently thinks it is channeling Marley’s spirit with its just announced “one voi©e” program to mark the first anniversary of its buffoonish existence. I have previously commented about the clown-like efforts of this group to spread the gospel of ever stronger rights under the guise of "education." But rather than quietly slink away into the shadows from whence it came, the Alliance has attempted to prove it really really is doing something, this time by celebrating its own anniversary. The alliance’s website proudly pronounced yesterday:

“The Copyright Alliance was formed with the singular purpose of serving as a collective voice and advocate on behalf of the 11 million Americans whose livelihoods depend on the principle of copyright,” said Executive Director Patrick Ross. “I can think of no better way to mark this milestone than to launch an effort to bring more individual voices to the discussion.” The Alliance is launching the “one voi©e ” outreach campaign that encourages creators to join the Alliance and “Create your work. Define yourself. Protect your copyrights.” The campaign will include both targeted online outreach and a new presence at key trade shows, festivals and other annual events throughout the year. Individuals who join the effort will have access to a network of other creators concerned about copyright via an interactive members-only web site. The site will also provide helpful resources and information about copyright to creators with questions. … The first stops for the “one voi©e” campaign will include the National Music Publishers’ Association Annual Meeting in New York City in June. Also on the agenda is the Annual Americana Music Association Conference in Nashville in September. Other dates and locations will be added.

One wonders whether the Alliance is contemplating something like the “Straight Talk Express,” and is launching a tour that will meander its way across this great country, charming hard-bitten, cynical authors with its mission of truth, education, and values, Good American values like protecting copyright for large corporations. Perhaps, evangelical-like, Mr. Ross will leap out into the crowds that are sure to form around the bus wherever it appears, invite everyone to form a circle, join hands, and then lead authors in the Alliance mantra: "Create your work. Define yourself. Protect your copyrights,” followed by a (licensed) performance of Marley's "One Love Song." Overcome with emotions, authors will start to talk in tongues, and of course sign up to become members of this new church.

Leaving aside the painfully juvenile use of © in voi©e, the math used by the Alliance challenges even the math used by the IIPA in its annual country “piracy” reports. Did 11 million artists really sign up to be members of the Alliance? Clearly not. Instead the Alliance counts all those who joined other groups that then joined the Alliance, like ASCAP and BMI where composers have to join to receive performance royalties. This is like saying every employee of News Corporation is a Republican because Rupert Murdoch is. How about Madonna, who left her label to sign with a concert promoter? How about Paul McCartney who signed with Starbucks? How about all of the performers who protested in 1999 and 2000 about the RIAA’s sneaking in a change to the work for hire provisions so that artists could then be denied their termination of transfer right, or the artists who also protested RIAA’s efforts to stop them from filing for bankruptcy? How about the television writers who went on strike last winter? The list could go on a very long time. One voice indeed.

One could take the position that if all the member organizations of the Alliance want waste money on such an absurd entity, who cares? But there is one group that might care: all those 11 million individual creators who are paying for it.

2008-06-05T09:02:00.001-04:00

Telephone Directories Again

Reading through lots of opinions gives one a sense of the ebb and flow of case law. There are spikes in certain areas, periods when courts seem to quite attuned to legislative change and the policy changes that go with that, and periods when such changes are so remote that courts seem unable to grasp them as has happened recently with divisibility.

Before and for some period after the Supreme Court’s 1991 opinion in Feist Publications, Inc. v. Rural Telephone Service Co., suits involving telephone directories were all the rage, sometimes involving the white pages, sometimes involving the yellow pages. Then the suits dropped off. On May 23, 2008, a district court in Oregon issued an opinion in Idearc Media Corp. v. Northwest Directories, 2008 WL 2185334 (Civil No. 07-796-HA) that brought it all back again.

Here is the background from the court’s opinion:

In 2006, Verizon Directories Corporation (VDC) published and distributed a telephone directory in Yamhill County (“the 2006 directory”). The yellow pages section of the directory included a number of display ads. Display ads typically include graphics, colors and text beyond the name, address, and telephone number of the business. NWD admits to scanning copies of all of the display ads in the 2006 directory and using those scanned ads to create display ads for use in the telephone directory that it distributed in Yamhill County in 2007 (“the 2007 directory”). As part of an attempt to enter the Yamhill County directory business, NWD did not charge advertisers for placement of ads in the 2007 directory. The display ads from the 2006 directory that are reproduced in the 2007 directory are essentially identical. However, because the pages in the two directories are of a different size, the ads in the 2007 directory are often different sizes than those in the 2006 directory. As a result, Idearc admits that none of the ads in the 2007 directory are totally identical. After the distribution of the 2007 directory, Idearc brought suit against NWD alleging infringement of its copyright in the 2006 directory.

VDC changed its name to Idearc in 2006. Unless Idearc itself created the display ads or had an assignment from the advertisers, then the advertisers, not Idearc had standing to sue. The evidence recited by the court was murky. Idearc relied on a contractual provision stating that if it created the ads then it owned rights in them, but it didn’t seem to present evidence that it had done so.

Defendant also argued that the notice on the yellow pages as a whole was insufficient since the ads themselves lacked notice, a dispute that was not an actual issue since mandatory notice was abolished as of March 1, 1989 in the Berne Convention implementing legislation. Yet, although aware of this, the court engaged in some sustained discussion of the issue, understandably disagreeing with the Tenth Circuit’s opinion in Transwestern Publishing Co. v. Multimedia Marketing Associates, Inc., 133 F.3d 773 (10th Cir.1998) that required a separate notice. There was also discussion of compliance with registration requirements and originality.

And then one had to face once again a (large corporate) plaintiff’s failure to understand, after 30 years, the most basic aspect of how statutory damages work: one award per work, regardless of the number of infringements:

Idearc claims that it is entitled to compensation for four acts of infringement. However, the text of § 504(c)(1) clearly indicates that the statutory damages for all infringements of the copyright in a single work (here a compilation) are lumped together… Thus, for the purposes of calculating the statutory damages, all acts of infringement of the 2006 directory, the only work at issue, are subject to a single award. This includes copies made during scanning, in the distributed paper copies, and the evanescent copies generated each time an Internet user visits the Yamhill County directory on the NWD web site.

The court did a workman-like job in the opinion, but there is a large sense of déjà vu to it all for me.

Two from Japan

2008-06-02T10:29:00.003-04:00

There are two items in the press about Japan and copyright law that make an interesting contrast. Here is the first:

'Fair use' stipulation planned for intellectual property

May 25, 2008

BY YASUKAZU AKADA, THE ASAHI SHIMBUN
The government will ease its stringent restrictions on using copyrighted works, a development that will affect activities ranging from posting personal pictures on websites to developing Internet search engines, sources said. The Intellectual Property Strategy Headquarters, led by Prime Minister Yasuo Fukuda, has decided to make a Japanese version of a U.S. copyright law stipulation that allows for the "fair use" of copyrighted works for criticism, analyses, media reporting and research.

The decision was made to make it easier for venture companies to start new businesses, such as developing a rival to Google. The government intends to revise the Copyright Law to include a fair use stipulation as early as next year. The current Japanese Copyright Law, in principle, prohibits any copying of other people's works or distributing them on the Internet without permission. Exceptions to the law are copying works for personal use at home or for use in schools.

The planned stipulation will largely follow the one under the U.S. copyright law, which bases fair use on certain factors, including: whether the use of works is intended for commercial purposes; and whether the use of works influences the market of those works. The Japanese stipulation will also contain the condition that the use of other people's works must not unfairly hurt the interests of the copyright holders, the sources said.

The current Copyright Law is sweeping in its application. For example, blogs featuring holiday photos of authors posing with anime characters in amusement parks could constitute a violation of the law. That is because the law does not have a specific stipulation that allows such use. In addition, the creation of parodies based on other people's works could also be considered a violation. Those activities could be regarded as legal under the fair use stipulation. Archive services that copy and store information on websites could also become legal under the revised law, allowing companies to start up such businesses, the sources said.

The Intellectual Property Strategy Headquarters will agree to consider the fair use stipulation in its "intellectual property promotion plan 2008" next month. After that, a study panel will discuss the issue.

Here is the second, from Martyn Williams in PC World

Japan's Cultural Affairs Agency has proposed adding a fee to the price of Apple iPods and other digital music and video devices to partially compensate rights holders for revenues lost to piracy. The proposal represents an extension of an existing program that adds the fee to the price of blank recordable media and products such as MiniDisc recorders. Consumers end up paying an additional few tens of yens (tens of U.S. cents) for media under the scheme that started in 1992.

The agency, which is part of Japan's central government, wants this expanded to music players and video recorders based on hard-disk drives, an agency spokesman said on customary condition on anonymity. It's not clear how much extra the fee would add to the price of hardware. However the iPod and other music players are primarily devices for music playback, not music recording, so their potential role in piracy isn't as clear as that of a MiniDisc recorder or video recorder.

The proposal will likely be formed into a report that will feed into a planned Ministry of Education, Culture, Sports, Science and Technology proposal to amend Japan's copyright law. If everything goes to schedule the amended copyright law would come into effect in 2010 but the proposal's inclusion in the amendment to the copyright law is not automatic and could be shelved or changed prior to its inclusion.

IP Talk Blog

2008-05-30T08:06:00.003-04:00

Thanks to Steven Hartman, I have come across a delightful French IP publication/blog, in English, called IP Talk. Here's the link to the blog, which I shall avidly read. The page I was sent was not on the blog, or at least I couldn't find it. It contains two blurbs that might surprise U.S. copyright lawyers. The first covers a Paris Court of Appeal opinion holding that at least the paparazzi at issue did not create copyrightable photographs. According to the write up:

The decision is based on the passive behaviour of the paparazzi when taking pictures. The judge regarded their work as being a material arrangement of the camera for the sole purpose of being ready to capture a star once he/she would show off. The lack of any artistic arrangement, specific searched angle and choice of the moment of the pictures brought [the court] to consider the pictures as not original.

This may the only time I have seen paparazzi described as passive. The decision seems questionable factually, as paparazzi are notorious for trying to get the "money shot," as those who regularly read (or in LA see) TMZ. The most famous parallel in the U.S. does not involve a paparazzi, but rather Abraham Zapruder's pictures (really a video) of the John F. Kennedy assassination. Zapruder had set his camera up to take pictures of the Kennedy entourage as it drove by, but clearly did not expect to capture Kennedy's killing. The court found the pictures protectible, Time Inc. v. Bernard Geis Associates, 293 F. Supp. 130 (S.D.N.Y 1968). And what about photojournalism? Some of the most famous photos ever taken were happenstance too, like the assassination of a Viet Cong soldier whose head we see a split second before the raised pistol's trigger is pulled, or the little Vietnamese girl, running naked, screaming away from napalm. It is the importance of the subject matter of these photos, and not copyrightable elements of posing etc. that separate them from pictures taken by paparazzi. Still, the French decision illustrates the higher level of protection for photographs required in a number of countries. The U.S. standard by contrast is the same for all works.

The other blurb concerns a February 5, 2008 decision by the French High Court apparently holding that copyright exists in fashion show as a whole, not just in the individual elements, such a lighting and the clothes. The dispute arose from a website that showed pictures from shows. This seems fairly extraordinary unless the show was by one designer who could be said to have choreographed the whole event, and even then there is the fixation question -- but not in France which I believe has no such requirement. Those interested in the question of fixation under U.S. law in theatre should read this article by Carrie Gallia in the 2007 issue of the Minnesota Law Review, entitled "To Fix or Not to Fix: Copyright's Fixation Requirement and the Rights of Theatrical Collaborators."

Finally, Harvey Korman may your memory be a blessing. You brought laughter and happiness to all of us.

The Blues and Copyright

2008-05-29T09:32:00.004-04:00

SSRN is a wonderful repository of articles. A 51 page article was posted on it two weeks ago about famous blues performer Robert Johnson, copyright, and the ways in which different cultural traditions impact on the nature of creativity and copying. The article is called "Borrowing the Blues: Copyright and the Contexts of Robert Johnson." The author is Professor Olufunmilayo Arewa of Northwestern University Law School. The article is available here.

Johnson's influence on white rockers is well documented, but Professor Olufunmilayo notes: "The elevation of Robert Johnson as blues exemplar has involved significant diminution of the role of shared and collaborative aspects of blues creation and performance in Johnson's works. Robert Johnson's status has in turn been accompanied by more favorable outcomes for his estate from a copyright perspective." Therein nicely captured is a tension between copyright's professed goals and how it may work out in practice. She notes too a tension between Johnson's actual musical practice and his later, posthumous characterizations, observing: "The collaborative nature of blues musical composition does not lend itself very well to Romantic author characterizations. In blues practice, the combination of performers crafting material from a collaborative tradition is a difficult one from the perspective of current assumptions about creation in copyright." (page 12).

Professor Olufunmilayo helpfully reviews the litigation involving Johnson's works, ABKCO Music, Inc. v. LaVere. 217 F.3d 684 (9th Cir. 2000). Defendant LaVere had reached an agreement with Johnson's surviving heir, Carrie Thompson, with a 50-50 split. The suit was a DJ action. Since Johnson's recordings were on piano rolls, the White-Smith rule that copy was made applied, and thus the court correctly held that section 303(b), regarding unpublished works governed, resulting in the works remaining under copyright. This was not the last suit involving Johnson: 15 year litigation culminating in 1998 in Mississippi courts resulted in Claude Johnson being declared the illegitimate son of Robert, resulting in entitlement to over $1 million dollars.

The tangled web of copyright law and personal histories is interesting, but here is my question about the article: there are great discussions of the collaborative nature of blues and the tensions with a Romantic view of copyright, but I don't see how this is tied in to the litigation of establishing Johnson estate's rights: the records made and copied were copied verbatim, and no question of the scope of Johnson's creativity was at issue. In any event, an interesting look at a great musician.

Illegal art

2008-05-28T07:58:00.005-04:00

Tomasz Rychlicki is a Polish copyright lawyer, who works at Patpol, Warsaw. He sometimes posts comments on this blog, and posted a very interesting one recently on the first sale question in the Vernor case. In the current issue of the Journal of Intellectual Property Law & Practice (Oxford Journals, OUP), Mr. Rychlicki has a fascinating article called "Legal questions about illegal art." (Volume 3, number 6, June 2008, pages 393-401). The topic is graffiti that is fixed in a tangible medium of expression in violation of local law. In addition to wonderful commentary, the article has great pictures.

The issue of illegality was raised in the U.S. in English v. BFC&R East 11th Street LLC, 1997 WL 746444 (S.D.N.Y. march 3, 1997)(97 Civ. 7466)(note Westlaw gives the caption incorrectly as CFC&R). The work in English was described this way by the court:

Plaintiffs are six artists who have created certain artwork in a community garden on East 11th Street (the “Lot” or the “Garden”). As I understand it, the artwork in question consists more or less of five murals and five sculptures (one of the alleged sculptures is a “continuous line pathway sculpture”). Plaintiffs also allege that the Garden itself constitutes a single work of art. They describe it as “a large environmental sculpture encompassing the entire site and comprised of thematically interrelated paintings, murals, and individual sculptures of concrete, stone, wood and metal, and plants.” Amended Compl. ¶ 9. One mural, on the wall of a city-owned building on the west side of the garden, is an anti-smoking mural painted by plaintiff Farinacci in 1992 as part of the City's anti-smoking campaign. One other mural is painted on that wall (without City permission). The other three murals are painted on a building owned by several plaintiffs and located on the east side of the garden.FN1 Without question, the artists expended significant time and effort, not only in cleaning the area but in constructing the artwork as well.

The difficulty was that the Garden was installed illegally. Defendants wanted to remove it, but were sued for violating the moral rights under 17 USC 106A (VARA). Defendants asserted illegality as a defense, and the court agreed:

The Court therefore holds that VARA does not apply to artwork that is illegally placed on the property of others, without their consent, when such artwork cannot be removed from the site in question. The Court expresses no view on VARA's application to the individual sculptures, also illegally placed but not permanently affixed to the site, though it is clear, as discussed below, that their display in the Garden is specifically excluded from the statute's scope. See 17 U.S.C. § 106A(c)(2). What is clear is that plaintiffs cannot claim a protectable interest in the Garden itself-even were it deemed to be a single unified work of art-because it was illegally placed on City property and, plaintiffs argue, cannot be removed as a whole. Because plaintiffs have failed to raise a genuine issue of fact as to any license or permission to place the artwork on the property, and in light of the Court's holding that VARA is inapplicable to such illegally placed works, summary judgment is appropriate.

As Mr. Rychlicki points out with graffiti, as with English, there are a number of difficult issues, including the conflict between the interests of the person or company on whose property the graffiti was placed without permission, and the rights granted in national laws to visual artists. He canvasses Polish law, U.S. law, and UK law. It is a very nice piece, but alas not available online, at least yet. But not to worry, he has generously offered to supply those who email him with copies of the article, and if you are really nice, he might even send along as a bonus pictures he submitted to the journal that weren't used. Here is his email address: tomasz@rychlicki.net

An Offer Countries Can't Refuse

2008-05-27T08:10:00.005-04:00

In the movie The Godfather, Marlon Brando, playing the Don, is approached on the day of his daughter's wedding by his godson Johhny Fontane, a singer who wants a movie role. The head of the studio won't give Fontane the role, so the Don to Johnny: "I'm gonna make him an offer he can't refuse." He does, and Johnny gets the part. A number of countries appear in danger of being offers they can't refuse too. One such offer is ACTA, the proposed Anti-Counterfeiting Trade Agreement. Wikileaks has provided a discussion paper on the agreement that was provided to selected (pro-ACTA) groups. See wiki story and links to documents here. (In a wonderful show of independence, Wikinews posted an entry alleging the Wikipedia Foundation Board was trying to censor their reporting on other issues; see here.).

The document provides few details, but it is the very lack of transparency that is a concern to me. The concern is centered on agreements being hashed out in private, among a small select group of believers, and then presented on what is in reality a take it or leave it basis. As IP Justice put is in their story on the issue:

After the multi-lateral treaty’s scope and priorities are negotiated by the few countries invited to participate in the early discussions, ACTA’s text will be “locked” and other countries who are later “invited” to sign-on to the pact will not be able to re-negotiate its terms. It is claimed that signing-on to the trade agreement will be "voluntary", but few countries will have the muscle to refuse an “invitation” to join, once the rules have been set by the select few conducting the negotiations.

The important issues raised by such an agreement should be subject to legislative hearings at the outset, in which all interests can participate, before the agreement is "locked." There are reports the agreement will be on the agenda July's meeting of G-8 nations in Tokyo; non G-8 countries, including Israel, should be put on notice that they too may soon receive an offer they can't refuse. But what about G-8 countries like Canada, which have been criticized by the United States government and by IIPA, and which is about to introduce copyright reform legislation? What happens if the current government signs on to ACTA in July? These are issues known only to the Canadian government, and as a non-Canadian, it is not my place to offer advice, but ACTA does introduce more complications into an already complicated situation and not only for Canada.

Photographs of Useful Articles and the Forgotten Section 113(c)

2008-05-23T08:55:00.003-04:00

There are many parts of the Copyright Act that go unread, and going unread their relevance is missed. Section 113(c) is one of those sections. The provision reads:

(c) In the case of a work lawfully reproduced in useful articles that have been offered for sale or other distribution to the public, copyright does not include any right to prevent the making, distribution, or display of pictures or photographs of such articles in connection with advertisements or commentaries related to the distribution or display of such articles, or in connection with news reports.

The purpose of the section is to permit those selling lawfully made copies of commercial goods that may have some copyrightable element, like a label, to advertise the goods for sale without running afoul of the copyright law. A recent case seemed like the perfect occasion to apply the provision, but it wasn’t mentioned; instead, fair use was asserted, and denied.

The case is Designer Skin, LLC v. S&L Vitamins, Inc., 2008 WL 2116646 (D. Arizona May 20, 2008)(Docket No. No. CV 05-3699-PHX-JAT). The court gave the following facts:

Designer Skin, LLC is a manufacturer of certain indoor tanning products. It owns a number of registered trademarks in these products and its company name, and also owns the copyright in certain artwork related to its products. Designer Skin distributes its products through independent distributors. The relationship between Designer Skin and its distributors is governed by the terms of a distributorship agreement, which limits the distributors' ability to resell Designer Skin's products. Specifically, the agreement prohibits the distributors from selling Designer Skin's products to anyone other than certain qualifying tanning salons. More specifically, the agreement prohibits the distributors from selling Designer Skin's products to Internet resellers.

S & L Vitamins, Inc. is an Internet reseller: it buys various products in bulk and then resells those products on its websites at discount prices. Since some time near the beginning of 2004, S & L Vitamins has sold Designer Skin products on its websites. S & L Vitamins has obtained all of its Designer Skin products through tanning salons. It has not purchased any of these products directly from a Designer Skin distributor.

On its websites, S & L Vitamins displays thumbnail images of the Designer Skin products for sale and identifies those products by using Designer Skin's trademarks. In addition, S & L Vitamins uses Designer Skin's trademarks in the metatags of its sites and as search-engine keywords. On the current websites at issue, S & L Vitamins has posted a disclaimer stating that it is not affiliated with or authorized by any tanning lotion manufacturers to sell their products.

By suing (inter alia) for infringement of the labels, the case involves, in my opinion, a misuse of copyright to stop lower-priced resellers. (The court granted summary judgment to defendant on plaintiff’s trademark claims). On the copyright claim, plaintiff had registrations only for the artwork on the label and not the text, but no matter, the analysis should have been the same. Defendant also claimed it had taken its own photographs of the labels, but the court analyzed the issue as if it had copied from plaintiff.

Defendant relied on fair use, which the court rejected, regrettably. Here are excerpts from that discussion:

[First factor]
Regarding the first part of the inquiry, the court finds that while S & L Vitamins' use of the renderings has a commercial purpose, the commercial character of the use is “more incidental and less exploitive in nature than more traditional types of commercial use.” S & L Vitamins does not sell copies of the electronic renderings-it sells Designer Skin products. The renderings are used primarily to identify and market these products, to give Internet consumers a representative picture of what they are buying. Thus, S & L Vitamins profits from the use of these images only indirectly.

Regarding the second part of the inquiry, however, the Court finds that S & L Vitamins' use is minimally transformative at best. Citing to Kelly, S & L Vitamins argues that its use of smaller, lower-resolution images is transformative. In Kelly, however, the Ninth Circuit's finding of transformative use was primarily based on the additional fact that the defendant's use “served an entirely different function than [the] original images.” That is not the case here. Both parties use the images for the same reason: to market Designer Skin products to consumers.

Considering both aspects of this factor, the Court finds that the purpose and character of S & L Vitamins' use weighs slightly against fair use.

[Second Factor]
The electronic renderings at issue in this case were created by Designer Skin's graphic designer. The work product of a graphic designer, like any other artist, is fundamentally creative in nature. With that said, the renderings were not created for any aesthetic or educational purpose but for the functional purpose of selling products. Thus, although creative, the renderings do not seem to be at the core of intended copyright protection…. Nevertheless, because of the clearly creative nature of the work, this factor weighs slightly against fair use.

[Third Factor]
S & L Vitamins copied the entire work and uses it for the same purpose for which Designer Skin intended it to be used: to identify and market Designer Skin products to consumers. Under these circumstances, the third factor weighs against fair use.

[Fourth Factor]

Designer Skin argues that the relevant market is the authorized market for Designer Skin's tanning products. The Court disagrees. The relevant market is… the electronic images themselves. Designer Skin seems to concede that there is no market for these images. Designer Skin sells tanning products, not images of its products. Thus, S & L Vitamins' use of the images has not caused any market harm, and nor could it, regardless of how widespread its use might be. This final factor thus clearly weighs in favor of fair use.

Nonetheless, with three factors weighing against fair use (although two only slightly) and only one weighing in favor of it (albeit the most important one), the Court finds that copying the electronic renderings from Designer Skin's website and pasting them on S & L Vitamins' own sites for the purpose of selling Designer Skin's products is not protected by the fair use doctrine. …

This is a depressing approach to fair use, even a fair use analysis by the numbers. The use of the photographs was to sell lawfully tanning goods: if you are going to let consumers know what the product looks like, you have to show a picture of it, and if you are going to show a picture of it you have to show the whole thing. There was, finally, as the court noted, no harm to any legitimate market for the image. But the fair use issue could have been avoided by relying on Section 113(c), which was created for just such circumstances.

First Sale Victory in Vernor

2008-05-22T07:36:00.005-04:00

On Tuesday, Judge Richard Jones of the U.S. District Court in Seattle handed down an opinion in Timothy Vernor v. Autodesk, Inc., handing Vernor victory in an important exposition of the first sale doctrine. (H.T. and congrats to Greg Beck). The case also illustrates why notice and notice is a better system for safe harbor regimes than the U.S. notice and take down approach USTR is trying to force on other countries.

The first sale doctrine (called "exhaustion" outside the U.S.) permits those who own a lawful copy of a work to sell or otherwise dispose of that copy by distribution. In the U.S., the doctrine was first developed by case law, then codified by statute in the 1909 Copyright Act, and is now found in Section 109 of title 17. While the first sale doctrine also applies to copies that are given away, what constitutes a sale is generally a question of state, not federal copyright law, and in recognition of this, many software companies have taken the position that they can convey the copy to the customer in an over-the-counter transaction for a one-time payment, but describe that transaction as a license; as a license, the first sale doctrine doesn't apply, meaning copyright owners can prevent further distribution of the copy. That is an absurd position to me, and in such cases, federal courts should take a common sense view of the transaction in order to avoid abolition of the first sale doctrine. Having made a sale at full value, there is no reason to let copyright owners preclude a rightful possessor of a copy from disposing of that copy, and no reason to force the rest of us to buy only new copies. Efforts to do so are yet another reason copyright has gotten a bad name.

The facts in Vernor are significant for safe harbor regimes too: Vernor makes his living selling lawfully purchased copies on eBay. In 2005, Vernor bought a copy of an AutoCAD package at a garage sale and put it up for sale on eBay. Autodesk sent a DMCA notice, and eBay suspended the auction. Vernor sent a counter-notice claiming his sale was lawful under Section 109. Autodesk failed to respond so the auction was reinstated by eBay. In 2007, Vernor bought 4 copies of an AutoCAD package from an architectural firm and sold three copies on eBay, but each time he put a package up for sale, Autodesk sent DMCA notices to eBay, which suspended the auction. Vernor promptly sent a counter-notice, and the auction was reinstated. When Vernor tried to sell the fourth package, Autodesk sent another DMCA notice, but this time eBay suspended Vernor's account for a month for alleged repeat infringement. Vernor then brought a declaratory judgment. If the first sale doctrine applied to the copies Vernor had purchased, then Vernor's actions were completely legal and he wasn't an infringer, much less a repeat infringer.

And Judge Jones found that the transactions were legal. To do so, he had to wade through a thicket of court of appeals' opinions, ultimately siding with a 1977 opinion, United States v. Wise, 550 F.2d 1180, over more recent opinions such as MAI Systems Corp. v. Peak Computer Inc., 991 F.2d 511 (9th Cir. 1993), which had touched on the issue briefly in a different context, the Section 117 archival and back-up copy privilege. I think Judge Roberts correct on all counts, and admire greatly his willingness to engage in a close reading of cases while keeping the commonsense nature of the issue foremost. This gets me back to the notice and notice versus notice and take down issue: the consumer won on the merits of his position, but went through hell and high water to vindicate his rights: he had repeated DMCA notices sent, auctions suspended, and then his account suspended. He had to obtain a lawyer (Public Citizen took the case on) and duke out the issue in court, and was blessed to have drawn an extremely thoughtful judge. Few consumers have the dedication to go through with a court case, and even fewer have the good luck to have dedicated consumer interest lawyers take up their cause; the vast majority of consumers, faced with similar notices, would have given up, and with that have been denied a rightful livelihood. Nor should eBay have been placed in the position of having to decide who was correct on an issue of law that has divided courts and commentator for well over a decade.

Under a notice and notice regime, eBay would not have to make judgments it has no ability to make, and Vernor's auctions would have gone forward because Autodesk was not, seemingly going to sue: recall that Vernor brought a declaratory relief action. Notice and take down, however, gave Autodesk the very relief it was denied by the court.

I conclude with a beautiful little post by Peter Brantley yesterday on first sale, which wasn't prompted by the Autodesk opinion (which I doubt he was aware of), but which shows why the principles of first sale are important to all of us. Thanks to Peter for letting me post it. Here it is:

On Owning Books

For various reasons, in the last month I have been filled with "life-nostalgia". My daughter recently turned 7, her celebration prompting like shadow puppets faint memories of my own childhood; my mother's birthday recently passed, but then, so had she a few years ago, so she was not around to enjoy it; and I've watched the news reports on Edward Kennedy's cancer with profound sadness; a loved family member had his own brush with a glioma a decade ago. It all makes one pause.

The delights of growing old: taking enjoyment from many small things. For me, one tenacious root of happiness is a shared enjoyment of reading with my father. It is to him that I must give credit for a love of books; as a professor of contemporary American literature for years, his book suggestions turned to Barthelme, Barth, and Pynchon when I was still in middle school. And for my father now, reading is something for him to hold onto; a love that only failing eyesight might stand to disperse -- and then there will be audiobooks.

I speak with my father weekly, and we reserve time to compare what is being read, how we heard about it, how it relates to other things we have enjoyed. And no doubt in part as a result of growing up in house filled with books, we've discovered that the walls of our house now bridge whole sections of the continent, for we mail books to each other regularly.

My father will mail me a copy of Willie Morris' North Toward Home and a few Durrells; I will mail him the hilarious and poignant A Thousand Shall Fall, and an old edition of Grimble's We Chose the Islands. And we argue over whom first heard about Andy Adam's The Log of a Cowboy; then we realize we both have editions in our homes.

Here is the thing: it's hard to say who owns these books. They are ours, collectively; they fling back and forth between Texas and California, and either household is only a temporary resting place. These books are shared, because they are appreciated; loved, because they are enjoyed with others.

Ultimately, I do not much care whether these books are paper or made of some other less organic substance, whether substrates and electrons, or plastic polymers. Instead what matters is that we are able to share books with each other; in return for the gift of spreading delight, a wait of days and the cost of media rate shipping are very modest penalties.

Whatever digital (ebook) books look like in the future, if they do not embody the right to share, in an unrestricted and platform independent manner, they will be poorer things.

This is called the first sale doctrine. It's part of why people love books -- a love built from sharing. It's what makes libraries possible. A world where content is licensed, and sold with restrictions on use, is a world less full of enthusiastic readers; less full of love.

To any publisher who sees the wisdom of DRM: don't.

What Nigeria Can Teach Oregon

2008-05-21T10:02:00.004-04:00

The State of Oregon apparently continues to press its groundless efforts to assert, directly or otherwise, claims in its statutes. Nate Anderson at Ars Technica had an update on May 13th, in which he wrote: "Justia and public.resource.org have since retained counsel to deal with the issue, and their lawyer has already made clear to Oregon that his clients will be posting the entirety of the disputed material by June 2."

Yesterday I came across an article by Emeka Maduewesi in This Day (which presents "African Views on Global News") entitled: "Copyright: Who Owns the Rights to the Laws of Nigeria"? Mr. Maduewesi, a Nigerian who is admitted to practice in both Nigeria and California (he is employed by Townsend and Towsend in San Francisco) reviews the Nigerian copyright act, which doesn't directly address the question. (There is an exception for reproducing copyrighted works that are part of public records, and a provision of the evidence law that seems less helpful to me than to him). He concludes, nevertheless, that:

"Nigerian courts should be hostile to any claim that will infringe on the rights of the citizens to have unfettered access to the laws governing them. In a democratic society, works prepared by government employees -- executive, legislators and judges -- acting within the scope of their employment would be for hire. For this reason, any copyright belongs to the people who elected or paid them to do the work."

Oregon just reported the results of a wonderful democratic activity yesterday, and had the largest rally of the Presidential campaign, 75,000 people. The people get it; now it is up to the government to get it too.

The Forensics of Infringement

2008-05-20T09:09:00.005-04:00

Motion picture companies, record labels, and famous entertainers of all kinds face, on a regular basis, baseless suits that not only drive up the cost of doing business (including through increased insurance premiums), but also waste human resources. Some of these baseless suits cross the line from delusional complaints into fraudulent ones. The Second Circuit recently dealt with one, Shangold v. Walt Disney Co., 2008 WL 1908908 (2d Cir. April 18, 2008), in which the court found:

Here, the defendants established, by clear and convincing evidence, that Shangold and Niederman submitted fraudulent evidence to the district court in order to bolster their claim of copyright infringement. The “T1a treatment” that Shangold and Niederman submitted to the district court, and claimed to have written in the spring of 1995, was shown to be fraudulent. The treatment contained various references to a character's “Palm Pilot,” a handheld computing device. The defendants established that palmOne, Inc., the company that manufactures the Palm Pilot, did not itself refer to the device by that name, even for internal corporate purposes, until late 1995. The name was not known to the public until early 1996-months after Shangold and Niederman claimed to have written the treatment. Both Shangold and Niederman offered testimony that the district court properly found to be false, at their respective depositions, in order to bolster their claims and continue the fraud.

J.K. Rowling was the victim of such a claim, Scholastic, Inc. v. Stouffer, 221 F.Supp.2d 425 (S.D.N.Y. 2002) in which there seemed to be striking similarities over the use of a “muggles” character. Great detective work by the law firm of O’Melveny & Myers came up with this finding by the court (note plaintiff is the declaratory judgment plaintiff, ordinarily the defendant; Stouffer is the party claiming infringement):

In connection with this litigation, Stouffer has produced booklets entitled The Legend of Rah and the Muggles that were allegedly created by Andé in the 1980's….. However, plaintiffs have submitted expert testimony indicating that the words “The Legend of” and the words “and the Muggles,” which appear on the title pages of these booklets, could not have been printed prior to 1991. According to plaintiffs' expert witness-whose testimony Stouffer does not rebut-the printing technology employed in the application of those words to the title pages was invented in 1985; however, because the specific printer used to print those words was between six and ten years old at the time the words were printed, “The Legend of” and “and the Muggles” could not have been placed on the title pages before 1991 (i.e. four years after Andé's bankruptcy). Stouffer concedes that these additional words were added to the title pages of the booklets after the booklets were originally printed, although she does not know exactly when the words were added or by what printing method.

The moral is that if a claim seems too good to be true, it probably is, but it will take a lot of skilled work to prove it so.

Harvey Schein and the VCR

2008-05-19T08:36:00.004-04:00

Thursday's NY Times had a very good obituary on Harvey Schein, an important figure at Sony Corporation of America and other entertainment companies. Mr. Schein worked at CBS under William Paley, and in that capacity forged a deal in 1967 for a new joint venture record company with Sony, partnering with Akio Morita. Years later, when CDs came out, I bought a complete set of the Billie Holiday CBS/Sony recordings, long before CBS parceled them out domestically CD by CD. I later bought one of the CBS domestic CDs just for comparison, and was surprised by its, wooden, dull sound. I was surprised because presumably the source material for the U.S. release was the same as the earlier Japanese release, which was outstanding. But I digress.

In 1972, Mr. Schein became the President of Sony's American affiliate, which was then located at the distinctive 9 West 57th street in New York City. (It is now in the Philip Johnson AT&T building on Madison Avenue), and it was during his tenure at Sony (he later went on to Warner Communications) that he achieved eternal fame in the copyright field, as documented in James Lardner's outstanding book "Fast Forward: Hollywood, The Japanese, and the VCR Wars." Everyone interested in copyright should read Mr. Lardner's book, so here is a link to amazon.com for it, with copies available for as low as 40 cents.

Mr. Schein makes his first appearance on page 28 of the Lardner book, at a memorable occasion: Lew Wasserman of MCA/Universal, during a September 1976 business dinner with Mr. Morita and Mr. Schein told them he might sue them over the Betamax. Mr Schein and Mr. Morita both recalled Mr. Wasserman adding: "We may have to do this because if the Betamax is successful, the video disc will never get off the ground." Mr. Wasserman was referring to a product called Disco Vision that MCA was developing; it was a playback only laser disc (yes, in 1976). Morita not only disagreed but added he found it difficult to see how MCA "could discuss a business deal and threaten a lawsuit at the same time. It was his policy and Japanese tradition ... that 'when we shake hands, we will not hit you with the other hand.'" (Me: prepare memo to Silicon Valley people to be aware of this strange culture).

In November 1976, the day after the suit was filed, Mr. Schein met with MCA's Sid Sheinberg
(who had been at the dinner) to try and work out a compromise that would involve Congressionally mandated royalties. Sheinberg is reported to have said that Disney, a co-plaintiff, would not go for it, but Schein concluded that the competitive threat to videodisc was the real problem. Mr. Lardner quotes Mr. Schein:

[W]hy buy a videodisc machine when you can buy a videocassette machine that does everything it does plus it records off the air and makes home copies? I don't think it was accidental that the company that took the lead in fighting the videocassette held all the patents on the videosdisc.

During a debate with Mr. Sheinberg on Walter Cronkite, Mr. Sheinberg called Mr. Schein a "highwayman," which appalled Mr. Schein whose whole career had been and remained in the entertainment business, usually on content owners' side. Mr. Schein lasted only a year or so after this at Sony, due to fights with Mr. Morita over mr. Schein's American style approach to immediate profits, something noted in the Lardner book and the Times obituary. He was an amazing figure in amazing times.

The Anti-Piracy Scam: Canada Insulted Again

2008-05-16T08:17:00.006-04:00

The Congressional International Anti-Piracy Caucus (IPAC) was established in October 2003. Its website states: " The Congressional International Anti-Piracy Caucus is a bipartisan and bicameral group committed to protecting American intellectual property and reducing the scourge of piracy abroad." It is hard to argue with such Motherhood and Apple Pie concerns.

The caucus made the news yesterday with a purported news release. I say purported not because I question the existence of the release, but because the news release hasn't been released on the caucus' website, but rather is reported on at the RIAA's website, here. The RIAA reports:

The co-chairs of the Congressional International Anti-Piracy Caucus (IAPC) today released their “Priority Country List” today highlighting some of the most pressing problems confronting the American creative community in global commerce.

Joining China and Russia in “the ignominious three” is Canada which, notwithstanding numerous public announcements, has failed to join the rest of its partners in the developed world in modernizing its copyright laws to address the challenges -- and to seize the opportunities -- of the digital age.

No quotes from the caucus are provided, however, so it is not possible to know what the caucus itself said, rather than what RIAA says. But this much seems clear: the addition of Canada well illustrates a cancer in discussions over copyright: RIAA is referring to its desire to have Canada adopt of the anti-circumvention and digital rights management provisions of chapter 12 of title 17. (It should be noted that despite chapter 12 being in title 17, chapter 12 is not a copyright provision, but is rather sui generis, like semiconductor chips, bootlegs, and vessel boat hulls. So even in the U.S., we have not implemented the 1996 WIPO treaties under our copyright laws.).

I have pointed out repeatedly that chapter 12 of title 17 has nothing to do with piracy. (See here and here). Instead, as Professor Tarleton Gillespie fully explained in "Wired Shut: Copyright and the Shape of Digital Culture" (reviewed in this blog post), chapter 12 is concerned with creating and controlling access, to creating a command and control business model in which U.S. corporations will be able to change, fundamentally the way we interact with culture; specifically toward a pay per view, pay per listen, or pay per read world in which we will never own a copy of a work, in which a combination of technological protection measures and the power to override limitations on copyright through contract -- made possible by the Seventh Circuit's ProCD opinion -- means we will all be licensees, subjects to whatever terms and conditions are unilaterally imposed, and which cannot be circumvented on pain of criminal prosecution brought on behalf of a government that is "Pro-IP."

What governments need to understand is how enacting what U.S. corporations are demanding of them will work in practice. In ordinary legislation, a bill is drafted, its provisions are laid bare, and can be debated. The effect the provision can have may be debated, but ultimately the legislature makes a policy decision, and a law is passed. Those who are affected by the provision can read it (or have their lawyers read it) and determine how to shape their conduct to comply with the provisions' mandates. Those mandates cannot be expanded or changed except by another act of the legislature. DRMs and TMPs work very differently. Chapter 12 of title 17 delegates law-making power to the private sector.

It is the private sector - to be specific, U.S. corporate interests -- that will determine, on a rolling, ever changing basis what conduct will be permitted; this includes what playback devices (e.g., DVD players, CD players, music and video enabled phones) can come to market and what functionalities they will have or not have; it also includes what uses we can make of lawfully acquired works: you buy a lawfully made DVD in England, sorry you can't play it in Canada; you purchased a download of a song, sorry you can listen to it only three times, or only on this device; you buy an eBook; sorry, you "bought" it only for two weeks, and only for play on a specific device (e.g., Kindle). None of this requires legislative approval: all of it -- and much much worse -- can be controlled through the rights granted in chapter 12 because those rights are rights to control access, broadly speaking and without being tied to acts that would otherwise violate the exclusive rights granted by copyright. Once chapter 12 is implemented into domestic law, it is U.S. corporate copyright interests that will shape what consumer goods can be used in your country and how citizens of your country will be able to access and use lawfully acquired copies of works. No legislature that is amending its copyright law should do so without understanding the momentous delegation of power they are handing to U.S. corporate interests.

This is not a piracy issue, it is nothing remotely resembling piracy. It is Orwellian to claim otherwise. The designation of Canada as a scofflaw because it hasn't implemented chapter 12 of title 17 is not only an abuse of language, but also a direct attack on the sovereignty of another country to determine what is in the public interest of its own citizens. Canada has more than adequate laws against real piracy, and as Howard Knopf had pointed out, its laws are more generous toward authors than is U.S. law. No legislature in the world should abdicate its responsibility to protect the public interest by vesting the private sector with the powers granted in chapter 12 of title 17. But Canadian abdication is exactly what is being proposed by U.S. interests, the false justification being that Canada is a pirate haven because it hasn't implemented the U.S. DMCA.

There is a very real danger that the false use of piracy as a stalking horse for the DMCA will succeed, and that of course is precisely why it is being employed. Members of Congress and parliaments (including the well-meaning members of the Congressional International Anti-Piracy Caucus) are of necessity generalists. They rely, of necessity, on specialists, both inside the government and in the private sector, to provide them with an honest presentation of the facts, the law, and the policies involved. This is why the misuse of language, the mischaracterization of international obligations, and the false association of DRMs and TPMs with piracy is so deadly, and why I complain about it so loudly and frequently. I support fully efforts to combat piracy in the usual sense of that word, in the sense the members of the Congressional International Anti-Piracy Caucus understand that word: the massive, commercial, unauthorized reproduction of copyrighted works. But this is not the sense in which U.S. corporate interests are now using the word; instead piracy has become a synonym for our DMCA, and on that score, I object. Let U.S. corporate interests make their case for our DMCA honestly, on the merits, without falsely impugning the state of the law in other countries with the scare tactic of piracy. If they have a good case, they can make it, but let's at least be honest about what is on the table.

Trump Trumps Architectural Infringement Claim

2008-05-15T10:09:00.003-04:00

The motion picture industry has long suffered from frivolous lawsuits brought by unsuccessful writers certain that they have been wronged. Such claims are also common in the music field, bu are less common in architecture. One exception is an opinion handed down yesterday by the Eleventh Circuit, Oravec v. Sunny Isles Luxury Ventures. L.C., et al. available here. (H.T. to C.E. Petit). The court of appeals, per Judge Wilson, affirmed the trial judge’s grant of summary judgment to defendants, and appropriately so. The opinion is solid.

Plaintiff is a Czech born architect who, upon immigrating to the United States, eventually ceased practicing in the field, perhaps because he is not licensed to do so. In his spare time, he sketched a design for a high-rise building that featured the use of alternating concave and convex shapes, with elevator cores sticking out from the building’s roofline. He mailed out about 120 copies of his design, and stated he had given some in person presentations. He subsequently alleged that the Trump Palace and Trump Royale high-rise condos in Sunny Isles, Florida infringed his designs.

The trial court held there were disputed issues of fact about defendant’s access to plaintiff’s design, resting summary judgment on the ground that no reasonable jury properly instructed could find the two works were substantially similar in expression. The court of appeals helpful included copies of the parties’ designs in appendices to its opinion, so that readers may form their own opinion of the matter.

There are at least noteworthy legal points in Jude Wilson's opinion: (1) rejection of the Ninth Circuit’s extrinsic-intrinsic test; and (2) a proper construction of the scope of copyright in architectural plans. There is also a lengthy discussion of plaintiff’s repeated, hapless efforts to register his claims, that is worth reviewing for those who practice in the field, or who worry about the scope of registrations for derivative works.

On the first point, the court of appeals revisited the opinion in Herzog v. Castle Rock Entertainment, 193 F.3d 1241 (11th Cir. 1999)(per curiam). Herzog has always been an anomaly because the circuit per curiam adopted the district court’s opinion and did not write its own. I have seen many references to Herzog that gloss over this point. The point is important because the Herzog district court utilized the Ninth Circuit’s extrinsic-intrinsic test, announced in the 1977 Krofft opinion, and which has been transmogrified in the subsequent 31 years into a jurisprudence that is, at its best, unfathomable and bears no resemblance to basic principles of copyright law. Praise God that the Eleventh Circuit took the occasion in Oravec (pages 10-11 n.5 of the slip opinion) to hold” “We believe that the Herzog formulation is not useful in this case because the two tests ultimately merge into a single inquiry: whether a reasonable jury could find the competing designs substantially similar at the level of protected expression.” If only the Ninth Circuit could find its way to such a simple statement of the inquiry.

The other legal point worth noting (in the short space of a blog, that is) concerns the court of appeals' clear holding that registration of architectural plans or for other pictorial, graphic, and sculptural works "does not protect against the construction of a building based on copyrighted architectural plans; it only prohibits copying of the plans themselves." (page 20). This simple, but important principle is a result of the 1990 amendments protecting for the first time architectural works, and is followed rarely, regrettably. May this be the start of a correction.

New Director General for WIPO

2008-05-14T08:44:00.004-04:00

Yesterday saw high drama in Geneva not seen since -- well, I don't know when there has been high drama in Geneva -- but anyway, by a vote of 42 to 41, Francis Gurry of Australia was elected the new Director General of WIPO. As reported by the Intellectual Property Watch blog:

The busy campaigns of the 15 original candidates lasted for months, beginning last autumn, and in some cases as far back as last summer, when it became apparent that a concerted effort would be made to convince the current director general to leave early out of concern for confidence in his leadership. Director General Kamil Idris agreed to leave the position one year early, on 1 October 2008.

But in the end, Gurry, considered a favourite as one of the most senior officials in the organisation who had nevertheless crafted a reputation for relative independence from the existing administration, prevailed. Gurry is the deputy director general in charge of patents, Internet domain names, and other matters, and previously served as WIPO general counsel. ....

In the end, it was a duel of insiders, as Graça Aranha also has been with the organisation for years. But Gurry may have managed to swing just enough developing country votes to take it. He also seemed to have support among some staff in the organisation. After the result, one staff person took to the hallways, shouting, “Viva Gurry!”

I have been told by an Australian colleague that the reaction in Australia was the more boisterous Australian war cry, "Aussie Aussie Aussie!!! Oi Oi Oi!" In any event, mazel tov to Mr. Gurry, and may the force be with you.

IceTV Iced: Kangaroos Hopping Mad

2008-05-12T07:56:00.004-04:00

In August of last year, I did a post on a decision by Justice Annabelle Bennett of the Federal Court in Sydney, Australia in a copyright infringement suit brought by the Channel Nine Network in Australia against IceTV for the latter's electronic program guide. Ice's EPG copied schedule information from Nine's weekly guides. Earlier background on the suit can be found here in a post by Kim Weatherall, and here in a post by Peter Black. IceTV was found to have copied information from Channel Nine, but to have engaged in its own research as well, combining information from a number of sources. This activity led the judge to conclude: “It is open at law to a person to ascertain the facts recorded in a compilation on the basis of that independent inquiry. This is what IceTV did…” That made sense to me.

On May 8th, Justice Bennett's decision was reversed on appeal. Here is a link to the appellate opinion. Kim Weatherall has a long post on the opinion here, with a follow-up with other excellent links here. As Professor Weatherall points out regarding the appeal: "This truly was an all-stars copyright case: interesting issues, an all-star IP bench (including the CJ himself, plus two senior IP heavies - Justices Lindgren and Sackville) (note too - the same bench that sat on the Desktop Marketing case), no less than 4 senior counsel (all of them IP heavies in their own right) plus juniors." That said, for American lawyers, the opinion, as with the earlier opinion by in Desktop Marketing Systems Pty Ltd. v. Telstra Corporation, Ltd. [2002] FCAFC 112, involving telephone directories, may prove baffling. Not that baffling American lawyers should be any consideration for Australians: I am merely noting that Australian law on the issues of originality and infringement of factual compilations is radically different than U.S. law, at least post-Feist. (I think pre-Feist too, but there were a few sweat of the brow opinions before Feist).

I leave it to Australian copyright experts -- of whom there is a vast number in that magnificent country -- to debate whether the court of appeals got the IceTV issue right as a matter of Australian law and/or policy. I do note these remarks by Professor Weatherall:

In summary? A judgment that is consistent with the trend of Australian authority, and entirely [’entirely’ is a bit strong for a preliminary view!!!] consistent with the reasoning of the (identical) Full Federal Court in Desktop Marketing. But a judgment which also illustrates how far away, in some respects, Australian copyright law is from copyright law in other countries, including the US (with its concepts of thick and thin copyright), and the UK now that the UK has the Database directive. And a judgment that emphasises that Australian copyright law truly does protect information, and not just expression (the judgment is notable for not even talking about that issue).

My question about both Desktop Marketing and now IceTV is a conceptual one: where protection is based on sweat of the brow, how is there any room for the traditional substantial similarity analysis that the court nevertheless ploughs through, including a discussion of qualitative takings? To be clear about the context of the question: plaintiff did not claim copyright in the form of the weekly guides, meaning, I take it, the selection, coordination, or arrangement in U.S. compilation terms. Rather, the claim was in the sweat of the brow. Justice Bennett below had tried to make a fine distinction about types of labor, phrasing the question as "not whether Ice had taken the skill and labour which had been expended in programming decisions, but whether it had taken [Nine's] skill and labour of creating the work." This framing of the question at least tried to separate out two distinct activities, the first the creation of what Americans would call the creation of the broadcast day -- the actual programming that was broadcast --, and the second being whatever effort went into the creation of the weekly guide from which Ice took information. The court of appeals was having none of this: "it would seem that the originality of [the time and title] information lay not so much in the form in which None presented it, but the skill and labour expended in selecting and arranging the programs." (para 94).

To an American, I see two problems with this aside from the avowed protection of sweat of the brow (see paragraph 92 of the appellate opinion): first, it grants protection to the weekly guides based on what was done in constructing the actual programming rather than in constructing the guides, and, second, it absolutely protects facts. Given this, the opinion could have been quite short: did Ice expend its own sweat of the brow? If not, case over, and let's dispense entirely with the traditional infringement analysis. I say this not to be catty (I leave that to the IPKat, meow!), but rather to note than sweat of the brow is based on unfair competition, not copyright, so why not just decide it that way?

Retail Value among Thieves

2008-05-08T17:19:00.004-04:00

You have been nabbed by the FBI for selling 300 counterfeit DVDs. You are facing prison time and fines, but how for long and how much money? The answer depends on the retail value of the DVDs, in particular whether they are worth more than $2,500. How do you get to below $2,500 for selling 300 counterfeit DVDs? By explaining to the judge that you sold them for $1,500. But is the relevant retail value the value for legitimate copies or the retail value that those who buy from counterfeiters pay? Who in other words are the willing buyers we look at? The term "retail value" is undefined, but the issue was just decided by the Fourth Circuit in United States v. Armstead, 2008 WL 1947869 (4th Cir. May 6, 2008)(05-5157). The court's approach seems unduly complicated, although it waqs of no moment to defendant since the court upheld the jury's verdict.

Here is the court's explication of defendant Armstead's argument:

He asserts that retail value, as used in the statute, means "the price a willing buyer would pay a willing seller at the time and in the market in which it is sold-the thieves' market." With this definition of "retail value," he argues that what a willing buyer would pay a willing seller at the time was evidenced by what the undercover agent paid him and therefore that the retail value amount was insufficient to satisfy the felony threshold amount of $2,500.

Here is the court's explication of the government's position:

The government contends that "retail value" refers to the higher value of what a willing buyer would pay a willing seller for a legitimate copy of the infringed item, such as an authentic, authorized DVD of the same movie. The government states that retail value as used in the statute is not the " 'bootleg value' the defendant received on the black market." It argues, "[i]f the Congress had meant to use the 'bootleg value' or 'wholesale value' of counterfeit product[s], it certainly would have used that or similar language; instead, the Congress used the phrase 'total retail value' of the copyright works."

The government's view makes sense and is easy to apply. Alas, that is not the approach taken by the court of appeals:

The government provides no authority to support the position that prices paid in a "thieves' market" cannot be a market value. Indeed, its only definition - the price of a movie "if it were sold to a member of the public" - would seem to include any market, except for the fact that the government argues for a value determined only by a market of "legitimate" copies. The government's assertion that the market for illicit goods is not determinative of "retail value" may be correct, but only if there is other evidence of a higher "value." ... Otherwise, a black market for illegitimate goods undoubtedly may provide evidence of a "market value." .... It remains undisputed by the parties that whatever value is used, it must be a value applicable at the time the violations occurred and the transactions in question took place-in this case, June 2003 and January 2004. Accordingly, retail value, as used in § 2319(b)(1), refers to prices assigned to commodities and goods for sale at the retail level at the time of sales at issue, representing face value or par value, or prices of commodities and goods determined by actual transactions between willing buyers and willing sellers at the retail level- whichever is the greatest. In this case, Armstead sold the illicit DVDs to an undercover agent when the movies recorded on them had only been distributed for theatrical release (and perhaps for hotel and airline release) but certainly before they had been released on DVDs to the public. Thus, at the time of the illicit transactions, there was no legitimate retail market for the sale of DVDs except as evidenced by the occasional and sporadic illicit transactions of the kind represented in this case. As noted, prices paid in those illicit transactions might be evidence of a market value. But in this case, the "thieves' market" prices were not the only evidence. The government presented evidence of other kinds of value that related to retail value during the theatrical release stage of the movies when the illegal transactions occurred.

...

Based on our reading of the statute, the government's evidence of the prerelease values of copies of movies, the actual selling prices of legitimate copies of movies in the postrelease period, as well as the suggested retail prices (which were erroneously excluded by the trial court), were all appropriate evidence for a jury to consider in determining total retail value of the illicit transactions. Likewise, the evidence relied on by Armstead of the actual transaction prices in the wholesale "thieves' market" was appropriate evidence for a jury to consider.

...
The fact that Armstead actually sold his DVDs in bulk for $5 per copy was also evidence that the jury could have considered. But this evidence would not be evidence of the greatest value; rather, it provided evidence of the lowest value that could be assigned to the DVDs. Indeed, the $5-per-copy price was a wholesale price, suggesting a "retail" value somewhat greater than $5 per copy.

BTW, Armstead was ultimately sentenced to six months' home detention, and paid $1,500 in fines.

Infringement by Copying Public Domain Works

2008-05-08T08:10:00.005-04:00

Riddle me this Batman: when can you commit infringement by copying public domain works? When the public domain work is a derivative work and the underlying published work is still under copyright. The issue has its roots in the 1909 Act, in cases construing Section 7 of that Act, which read:

Compilations or abridgements, adaptations, arrangements, dramatizations, translations, or other versions of works in the public domain or of copyrighted works when produced with the consent of the proprietor of the copyright in such works, or works republished with new matter, shall be regarded as new works subject to copyright under the provisions of this title; but the publication of any such new work shall not affect the force or validity of any subsisting copyright upon the matter employed or any part thereof, or be construed to imply an exclusive right to such use of the original works, or to secure or extend copyright in such original works.

This section led to numerous court of appeals opinions and one Supreme Court decision, Stewart v. Abend. The bolded part at the end is particularly inscrutable even by the standards of the 1909 Act. If for example, where there is an authorized derivative work, shouldn't the original material included in the derivative work fall into the public domain when the derivative work falls into the public domain? One way to interpret this section is to say that when an authorized derivative work falls into the public domain, anyone can use that work and anything from the original included in the derivative work. In the case of unpublished screenplays, that is what the Ninth Circuit held in Batjac Productions, Inc. v. Good Times Home Video Corp., 160 F.3d 1223 (9th Cir. 1998).

But earlier, in Russell v. Price, 612 F.2d 1123, 1128 (9th Cir.1979), the court came out differently where published works were involved. Russell involved a film version of Pygmalion, a play by George Bernard Shaw. In 1935, Shaw licensed rights to produce a film (also called Pygmalion) based on his published, copyrighted play. Copyright in the film expired through a failure to timely renew. Copyright in the play, Pygmalion, continued until 1988. Defendant began distributing the now public domain film in 1972. The owners of the play (Shaw had died) brought an infringement claim based on infringement of the play. The Ninth Circuit held that because parts of the film used the still-under-copyright play, infringement occurred. As stated by the court:

Thus we reaffirm ... the well-established doctrine that a derivative copyright protects only the new material contained in the derivative work, not the matter derived from the underlying work. Thus, although the derivative work may enter the public domain, the matter contained therein which derives from a work still covered by statutory copyright is not dedicated to the public. The established doctrine prevents unauthorized copying or other infringing use of the underlying work or any part of that work contained in the derivative product so long as the underlying work itself remains copyrighted. Therefore, since exhibition of the film “Pygmalion” necessarily involved exhibition of parts of Shaw's play, which is still copyrighted, plaintiffs here may prevent defendants from renting the film for exhibition without their authorization.

The issue arose again last August in a different setting, the Andy Griffith television show. The show aired on CBS from 1960 to 1968 and starred Griffith as Andy Taylor, Sheriff of Mayberry, North Carolina with Ron Howard as his son, Opie, Frances Bavier as his aunt, Beatrice "Aunt Bee" Taylor, and Don Knotts as his deputy, cousin, and best friend Barney Fife.
In March 1997, Paramount Pictures Corporation, a predecessor-in-interest to CBS, submitted renewal applications for episodes 80 through 95 (the “16 Middle Episodes”), as well as sixty other episodes. On June 5, 1997, the Copyright Office rejected the renewal applications for the 16 Middle Episodes as untimely, and into the public domain they went. A company called Rel Funds International, Inc. distributed the Middle Episodes, and CBS sued for infringement of the earlier episodes based on the Russell theory. The court held for CBS, 2007 WL 2325218 (N.D. Tex. Aug. 13, 2007). What I fine ironic about this result -- aside from the Middle Episodes not really being in the public domain anymore -- is that in the context of statutory damages, plaintiffs have successfully argued around the Section 504(c) limitation on only one award per derivative work or compilation (i.e., here the series), and obtained multiple awards of damages based on each episode. Apparently, when it comes to the precedent question whether each episode is under copyright, we magically are not to focus on the episode but on the series.

Forseeability and Copyright Incentives

2008-05-07T10:55:00.005-04:00

Professor Shyamkrishna Balganesh of the University of Chicago Law School has an article called "Forseeability and Copyright Incentives, coming out in volume 122 of the Harvard Law Review but available here in draft form at ssrn. The topic is an intriguing one -- if copyright is instrumental, meaning incentive based -- how is that so little of how copyright actually works does not bear the slightest resemblance to incentives? This was the topic of then Professor Stephen Breyer's 1970 "Uneasy Case for Copyright " article (also in the Harvard Law Review). Professor Balganesh's work might provide a new look at the issues 38 years later, but in order for that effort to succeed, there are some basic errors that need to be corrected, as well as some rethinking.

His basic point is one I agree with and which I think deserves serious inquiry. The point is this: if copyright is instrumental -- and it is hard to look at the relevant Supreme Court opinions, the language and history of the Constitutional clause and think otherwise regardless of one's own views -- then it is incumbent to determine whether that instrumental goal is being fulfilled, not just as a systemic issue, but at the micro level. At the micro level, it is hard to look at the current level of protection and think there is any correlation at all between that protection and incentives to create. (It is a very different question whether the failure to match incentives to protection rises to the level of a constitutional infirmity, as Eldred illustrates).

To his credit, Professor Balganesh takes on a number micro issues, such a new uses, substantial similarity, and fair use. He proposes employing, as a common law tool, the foreseeability theory/behavior economics theory approach to deciding these issues. Both take as a starting point the idea of "bounded rationality": we each only know so much. This is in contradistinction to the neoclassical economic assumption that we are perfectly rational and readily respond to utility-enhancing incentives. Put crudely in Chicago terms, are you with Richard Posner or Cass Sunstein?

And again to Professor Balganesh's credit, he takes the bold step of offering some hypos and seeing how they would pan out with his theory. Here are some of my issues with how he approaches the hypos and works them out. First, the new use issue -- in 1955 did an author who authorized use of the work on black and white television think of VCRs in authorizing his or her work to be "exhibited" on television. This is a common issue, but it is not a copyright issue at all; instead, it is a contract issue, and a state contract issue at that. The Second Circuit has made this clear many times. Second, on fair use, it is not true as Professor Balganesh states that "the doctrine of fair use is of statutory origin." (page 11). It is a common law doctrine. Nor do I agree with his remark that "It remains common consensus among copyright scholars that the fair use doctrine -- as it is structured and applied today-- remains deeply flawed." (page 5, note 16). I don't know about copyright scholars, but Judge Leval who knows a thing or two about the question, takes a very different view. In recent speeches, he thinks fair use is working well. Professor Balganesh's interpretation of how transformative use is intended and works in practice is, regrettably, simply wrong; for example, he states "for uses that don't directly modify the substantive content of the work, the transformative use test becomes somewhat meaningless." (page 12). Not only has Judge Leval rejected this erroneous view of what is after all his own theory, but there are many cases to the contrary, such as the Perfect 10 v. Amazon.com case, which Professor Balganesh doesn't cite, and two that he does cite, one incorrectly for holding that such change is required -- the Bill Graham case -- and the Kelly Arriba case which he acknowledges but then cites another law professor who describes Kelly as a misapplication of transformative use. One can regard Kelly as a misapplication if you like, but that doesn't mean the opinion is meaningless; quite the opposite, the P10 case followed it, and Judge Leval has endorsed it as well.

One final example of my problems with the article as currently written; this one illustrates Professor Balganesh's failure to appreciate the role that Congress plays. Professor Balganesh discuses the Supreme Court's 1908 White-Smith opinion holding that perforated piano roles were not a copy of the underlying music. Professor Balganesh interprets the parties' briefs to have raised his foreseeability theory, but is upset that the Supreme Court decided the case on statutory interpretation grounds. Then, and this is regarded as particularly bad, the Court having decided the case on statutory grounds, Congress went ahead and amended the statute, rendering, it is said, the Court's reasoning as redundant. Had the Court decided the case on the foreseeabilty ground allegedly argued, Professor Balganesh argues, the Court "might have reached the same conclusion -- but on much surer footing."

I doubt it, and I disagree that deciding a case by interpreting a statutory term represents less footing than deciding the case on behavioral theories espoused in briefs. But in any event, Congress had been deliberating amendments on point years before White Smith was decided, and therefore did not act in response to the opinion, nor did Congress's legislative action render the Court's opinion redundant. The Court was construing the pre-1909 Act statute and Congress was passing a new, omnibus statute. Moreover, Congress did not reverse the Court's interpretation of the term "copy": that interpretation remained the law until the 1976 Act. What Congress did was to create a compulsory license, a license that had nothing to do with forseeability, but which neatly both gave copyright owners for the first time remuneration for the mechanical reproduction of their compositions, and which broke the tying arrangement that underlie the White Smith case.

Professor Balganesh has taken on a very important issue, and he may be the person to see it through, but the article as presently written doesn't. I would love to see the article reworked so that his insights could be more forceful.

Happy Birthday Now Pay the License Fee

2008-05-05T21:22:00.007-04:00

I confess to vastly preferring the Beatles' You Say its Your Birthday to the traditional Happy Birthday. (Here is a link to the Beatles singing the traditional song, though). Nevertheless, for copyright geeks, the traditional Happy Birthday has provided fodder for what all that is wrong with copyright. Now, Professor Robert Brauneis of George Washington Law School has blessed us with an exhaustive treatment of the song. Available here on ssrn, the article is entitled "Copyright and the World's Most Popular Song," Professor Brauneis gives us 67 and a half pages of history of the song and the copyright issues surrounding it. He has also generously provided a an amazing resource -- a website hosting over a hundred documents relating to the song:

http://docs.law.gwu.edu/facweb/rbrauneis/happybirthday.htm

The article is a tour de force of historical research as well as a probing inquiry into how copyright works that have fallen into the public domain can still command serious income through the inability of others to spend the time and money to track down the provenance of the claims to copyright in them. For those interested in the economic effects of term extension, here are some statistics Professor Brauneis offers: "In the late 1940s and early 1950s, the song generated revenues in the range of $15,000 to $20,000 per year. By 1960, the figure was closer to $50,00, and by 1970, over $75,000. But the really dramatic increase in revenue came in the 1980s. By the early 1990s, the song was generating over $1 million per year, and by 1996, reported Forbes magazine, it was 'pull[ing] in slightly less than $2 million a year.'" The Sony Bono term extension did not occur until 2 years later, 1998, while Happy Birthday, then known as "Good Morning to All," was first published in 1893, 115 years ago.