Wednesday, May 31, 2006

Formerly Mister Softee

Today's New York Times has an obituary by the talented Margalit Fox (a name I am extremely partial to, given that it is my daughter's name, who is in turn named after my late mother, aleha ha-shalom)(Ms. Fox's father, David was a physicist blacklisted during the McCarthy era and indicted for contempt to refusing to fully testfy before the House Un-American Activities Committee).

James Conway Sr., 78, a Founder of Mister Softee, Dies

James Conway Sr., an entrepreneur whose company has been delighting the taste buds, if not always the ears, at this season for the past half-century, died on Sunday at his home in Ocean City, N.J. Mr. Conway, a founder of the Mister Softee ice cream company, was 78.
The cause was cancer, said his son, James Jr., vice president of the company, now based in Runnemede, N.J.
With his brother William, Mr. Conway began the business in Philadelphia in 1956, developing it into a multimillion-dollar concern. Mister Softee is currently among the largest franchisers of ice cream trucks in the country, with more than 600 trucks in 15 states.
Even more memorable than the company's soft ice cream is its jingle, played on a music box and broadcast through a loudspeaker atop each truck.Once heard, the song is not soon forgotten. For some listeners, it heralds summer. For others, it recalls childhood. For still others, it constitutes a form of torture.
Written in E-flat major in jaunty 6/8 time, the jingle was created by an advertising agency in 1960 for the company's early radio campaigns. Though the trucks play only an instrumental version, the tune does have words:
The CREAM-i-est DREAM-i-est SOFT ice CREAM
you GET from MIS-ter SOF-tee.
FOR a re-FRESH-ing de-LIGHT su-PREME
LOOK for MIS-ter SOF-tee....
James Francis Conway was born in Philadelphia on Oct. 30, 1927. In 1949, he earned an undergraduate degree in business from the Wharton School at the University of Pennsylvania and afterward served in the Navy during the Korean War.
With his brother William, Mr. Conway later went to work for the Sweden Freezer company, which manufactured ice cream machines. On St. Patrick's Day 1956, the brothers put one of the machines into a truck and drove it through Philadelphia, giving away green ice cream. And so they went into business, at first as the Dairy Van. Mr. Conway, the company's vice president, retired in 1998. William Conway, the president, died in 2004. The company is now run by the two men's sons.
In 2004, as part of a proposal to strengthen New York City's noise code, city officials tried to still the voices of ice cream trucks throughout the five boroughs. Outcry ensued.
Last year, the city and Mister Softee reached an agreement, which covers all ice cream vendors, under which the trucks may play music only when they are in motion.
Besides his son, of Medford, N.J., Mr. Conway is survived by his wife, Grace Roseman Conway; two daughters, Barbara Kemenosh of Haddonfield, N.J., and Cricket Newfrock of Mountain Lakes, N.J.; and nine grandchildren.

This is a classic example of a delightful obit: informative, funny, and full of great cultural facts. There is even a copyright angle, the work-for hire jingle created by the ad agency. The obit also recalls for me an outstanding, but little known 1984 movie, Comfort and Joy, by the Scottish director Bill Forysth. Mr. Forysth may be known from his earlier movies, in particular the sweet coming of age movie, Gregory's Girl (1981), and the off-beat Local Hero (1983), with Burt Lancaster and Peter Rieigert. Comfort and Joy depicts a silly Scottish radio personality, Alan Bird, who has a mid-life crisis when his girl friend leaves him. He decides he wants to do more serious work, a possibility that leads his boss (the wildly funny Alex North) to order him to go to a shrink. Bird then inadvertently gets mixed up in a bitter war between two ice cream truck companies, one of which informs him in a snarling way that it was formerly known as Mister Softee. It is an hysterical, perfect summer night movie, best enjoyed with ice cream and memories of the joys Mr. Conway brought countless children.

Monday, May 29, 2006


At the risk of a copyright infringement suit by AFP, here is an article of theirs (edited, transformative) about the movie Syriana:

PARIS (AFP) - The makers of the US geopolitical thriller movie "Syriana" denied in a Paris court a claim that they had stolen the idea from a French writer.

George Clooney' name production company Section Eight [was] sued by Stephanie Vergniault who claims "Syriana" is based on a script which she wrote in 2004.
She is claiming two million euros (2.55 million dollars) and 35 percent of receipts.
But lawyers for the film-makers told the court that the two works bore no similarity, and that filming of "Syriana" was already well advanced by the time they supposedly became aware of Vergniault's script. ... It opened in the United States in November.
The court is to rule in the plagiarism suit on June 19.

I am curious about the dual damages sought, especially the 35% of the receipts: that is a whopping figure and seems rather contrived: how could one say that 35% of the people who saw the movie did so based upon allegedly infringing material, and a script muchless. Perhaps the damages are unique to French law.

In the United States, there is a vigorous theory of apportionment, seen in the statutory language that awards only those profits of defendant or losses of plaintiff that are attributable to the infringement. In addition to the skill of Syriana's screenwriter (who also wrote Traffic) one might think a fair amount of the attraction of Syriana is attributable to the fame of George Clooney. In Learned Hand's second Sheldon opinion, 106 F.2d 45 (2d Cir.) , aff'd, 390 U.S. 390 (1939), apportionment was ordered where a play was found to have been infringed by a movie. Experts testified that much of the popularity of the movie was attributable to the stars, especially Joan Crawford and her dress by Adrian. Twenty percent of the profits were awarded, out of an "abundance of caution," with ten percent being the favored figure. The Ninth Circuit took the same approach in its "Rear Window" opinion, Abend v. MCA, Inc., 863 F.2d 1465 (9th Cir. 1988), aff'd, 495 U.S. 207 (1990), especially given the stars there, Grace Kelly and Jimmy Stewart and the fact that the Grace Kelly character did not appear in the infringed play. (And who could forget the opening shot in the movie of her?).

If there is infringement in the Syriana case, it will be interesting to see how such issues are handled.

Friday, May 26, 2006

9th Circuit and Right of Publicity

Two days ago, in Laws v. Sony Music Entertainment, the Ninth Circuit issued an opinion that makes sense. That accomplishment alone is worthy of mention, although the sheer common sense of the matter may have dictated the result. Plaintiff Debra Laws is a composer and recording artist. She recorded a song of her own entitled "Very Special." She had a contract with Elektra/Asylum Records in which she transferred many rights including the right to use and to permit others to use her name, likeness etc. in connection with the master recording. Subsequently, the label's agent entered into an agreement with Sony to use a sample of Laws' recording in the song "All I Have," performed by J Lo and L.L. Cool J. Proper attribution was given. The song became a smash hit, something J Lo needed after Gigli and the Bennifer days. Laws sued in state court for right of publicity violations. The case was removed to federal court, where the district court held the claim preempted and the court of appeals affirmed. (Parenthetically, removal was not the only way this could have been handled; a claim of preemption could have been decided by the state court, with the same result obtaining).

There is no question that appropriation of someone's voice can give rise to a publicity claim: the court of appeals had so held in Midler v. Ford Motor Co., 849 F.2d 460 (9th Cir.1988) and in Waits v. Frito-Lay, Inc., 978 F.2d 1093 (9th Cir. 1992). But this case was closer to Sinatra v. Goodyear Tire & Rubber Co., 435 F.2d 711 (9th Cir, 1979), the "These Boots are Made for Walking" case, in which a claim by Frank's daughter was rejected for an advertising use of the song with permission of the copyright owner. And that's why it was easy for the Ninth Circuit to get the Laws case right: when the performer has authorized the use of a copyrighted work and it is the copyrighted work that is being used for itself, the claim is one regarding whether use of the copyrighted work is authorized. That claim arises under the Copyright Act and thus Section 301 kicks in. If the performer wants to prevent sampling, he or she can do so by contract; right of publicity laws can't be used as an end-run.

Thursday, May 25, 2006

A Precis on Section 119

In an earlier posting I stated that the Section 119 compulsory license for satellite retransmissions is not for the faint of heart. The Eleventh Circuit, in an opinion issued two days ago, CBS Broadcasting Inc. v. Echostar Communications Corp., has provided a 44 page precis to the section that is well worth reading for those curious about such things. The narrow issue was whether Echostar had met its burden of establishing that households it served were unserved households within the meaning of Section 119(a)(2)(B)(i). The court of appeals agreed it hadn't, indeed that the satellite carrier had shown no interest in compliance with the Act. Also of interest is the mandatory nationwide injunction. This provision, in Section 119(a)(7)(B)(i), like Horton the Who says what it means and means what it says. The district court thought otherwise and the court of appeals rightly reversed.

The Next Betamax Case?

An earlier posting discussed a proposed new service by Cablevision in which Cablevision will store on its servers programs that subscribers record. The issue has now been joined with a suit filed by the studios, as detailed in this story by Ben Fritz in today's Daily Variety:

Fox, Universal, Paramount, Disney, CBS, ABC and NBC have all joined forces in a lawsuit against the fifth-biggest cable operator over its controversial network digital video recorder.

Called remote-storage DVR, it gives subscribers the functionality of a TiVo but stores programs on Cablevision's own servers, rather than on a set-top box in users' homes, and streams shows that they choose to record to them.

It's the latter point that has studios and nets in a tizzy. They're alleging that by transmitting programs stored on its own servers, Cablevision is essentially creating a new on-demand service without paying licensing fees.

"While Cablevision apparently will call its service 'RS-DVR,' presumably to make it sound like a mere extension of digital video recording equipment, the proposed service is nothing of the kind," lawsuit claims. "Cablevision's proposed service is an unauthorized video-on-demand service that would undermine the video-on-demand, download, mobile device and other novel and traditional services that plaintiffs and other copyright owners have developed and are actively licensing into the marketplace."

RS-DVR is skedded to start a trial rollout in Long Island next month and eventually become available to all of Cablevision's 2 million digital subs. Suit will likely delay that rollout, however.

Cablevision first announced plans to offer the service in March. Many considered it controversial at the time and expected such a lawsuit to be filed (Daily Variety, March 27).

Studios have made overtures to the operator in the past two months, but it maintains no additional rights are needed since the new service is identical to TiVo, which is indisputably legal.

Many industryites privately grouse about consumers' existing ability to time-shift TV and skip commercials, though they have no legal recourse against DVRs in the home. But this lawsuit makes clear that studios and nets will fight any effort to extend such services beyond the current legal limits, even if consumers don't get additional functions.

To bolster Cablevision's case that its new service is no different than a TiVo, RS-DVR records separate copies of a show for each user as they request it. Subscribers get 45 hours of hard drive space and can record only two programs at a time. Set-top box-based DVRs record up to two shows at a time and typically record between 40 and 80 hours of TV.

RS-DVR is significantly cheaper for Cablevision than standard DVRs, which it must install, repair and replace at consumers' homes.

Time Warner Cable planned a similar service in 2003 called Maestro but abandoned it over copyright concerns and transformed it into the new Startover."This lawsuit is without merit, reflects a fundamental misunderstanding of Cablevision's remote-storage DVR, and ignores the enormous benefit and well-established right of viewers to time-shift television programming," Cablevision said in a statement.

Tuesday, May 23, 2006

Orphan Works

Tomorrow at 4 pm, the House IP subcommittee will mark-up, H.R. 5439 a bill introduced yesterday by chair Lamar Smith to deal with orphan works, that is, works whose copyright owner is MIA. The mark-up will be webcast (follow this link to the subcommittee).

In January, the Copyright Office issued its report on the issue, making a number of recommendations (see earlier posting). H.R. 5439 adopts the general thrust of the recommendations. The bill proposes a new Section 514, effective for uses that commence on or after June 1, 2008. I don't know what the rationale is for such a two year sunrise provision, but in my opinion it is preferable to the previous recommendation of a ten year sunset. A report is required by the Register no later than December 12, 2014 on the implementation of the act as well as any recommended changes. The Register is also directed to conduct an inquiry on the remedies for the "kleine munze" issue, that is, small copyright claims.

Simplifying things, Section 514(a) of the bill proposes to place limits on remedies where the court finds that the infringer, before beginning the unauthorized use, engaged in a good faith, reasonably diligent but unsuccessful search to locate the copyright owner, and after using the work, and provided a reasonable attribution (one might, for example, not know the author's name). The Copyright Office will assist in maintaining records for search efforts.

Section 514(b) is where the rubber hits the road. Section 514(b)(1) deals with monetary remedies. Section 514(b)(1)(A) limits recovery to reasonable compensation. Section 514(b)(1)(B) contains exceptions to this. 514(b)(1)(B)(i) states that not even reasonable compensation can be awarded if the infringement is made without any purpose of direct or indirect commercial advantage and primarily for a charitable, religious, scholarly, or educational purpose, so long as the infringer stops after receiving notice from the formerly submarined owner. While an exemption from payment is helpful, what happens if the infringement doesn't stop? Is the copyright owner entitled, for monetary relief, only to reasonable compensation or full remedies? I assume the former.

Two small drafting points on this subparagraph: the qualification that the exception does not apply if the court finds the infringer earned proceeds directly attributable to the infringement seems unnecessary since by definition the exception only applies on its face to cases where there is no purpose of direct or indirect commercial advantage. And if the infringer can't have gained any proceeds from the infringement, it may prove that the exception covers only a very narrow class of uses. The other drafting point is in 514(b)(1)(B)(ii), which comes at the very end of this paragraph and states that if the infringer fails to negotiate in good faith regarding the amount of reasonable compensation, the court can award full costs. Since this provision has no relevance to Section 514(b)(1)(B) - since uses in that section are uncompensated- it might be better placed as a proviso to Section 514(b)(1)(A).

Section 514(b)(2) deals with injunctive relief. This provision confuses me a bit. First, I don't quite grasp how it would work with reasonable compensation: other than reasonable compensation for past uses and an injunction against future uses, the two remedies can't work in tandem, and working in tandem in that manner undercuts a principal benefit of the proposal: permitting those who in good faith, after a reasonable effort, to invest in a project to then go ahead with the project (and recall that the infringer has to conduct the search before even beginning to use the work). It is true that the bill refers to the court taking into account the infringer's reliance on having performed the search, but I can't imagine the weight given to that would be great, much less determinative: after all preliminary injunctive relief is handed out as freely as swag at celebrity events, and in the Ninth Circuit the copyright owner is all but if not irrebuttably entitled to preliminary relief. I hasten to add that Section 514(b)(2)(B), dealing with transformative uses, precludes the court's ability to issue an injunction upon payment of a reasonable royalty and attribution, and it may be that such uses are the most worthy.

Hats off to the subcommittee for undertaking such a good government bill and for such a transparent process.

Monday, May 22, 2006

Senator McClellan

In the excellent 2005 movie Good Night and Good Luck, excerpts from the 1954 U.S. Senate Hearings on Subversion and Espionage initiated by Sen. Joseph McCarthy are shown. One scene shows an accused "subversive" working for the State Department, a poor black woman named Annie Lee Moss. During her brow beating by McCarthy, Senator McClellan defends Moss's right to a fair hearing and disclosure of evidence against her:

"Mr. Chairman, I would like to make this point: We are making statements here against a witness who has come and submitted to cross-examination. She has already lost her job. She has been suspended because of this action. I am not defending her. If she is a Communist, I want her exposed. But to make these statements that we have corroborating evidence that she is a Communist, under these circumstances, I think she is entitled to have it produced here in her presence and let the public know about it and let her know about it........I do not like to try people by hearsay evidence. I want to get the testimony under oath.....I do not think it is fair to a witness, to a citizen of this country, to bring them up here and cross-examine them and when they get through, say, 'The FBI has something on you that condemns you.' It is not sworn testimony. It is convicting people by rumor and hearsay and innuendo."

During the 1954 Army-McCarthy hearings (also depicted in the movie), McClellan led the Democrats in a walkout over McCarthy's conduct, and later served on the committee that censured McCarthy. When the Senate went Democratic after the 1954 elections, McClellan replaced McCarthy as chair of the investigative committee, later going after Jimmy Hoffa, among others. McClellan suffered many personal tragedies: his wife died of spinal meningitis in 1935 as did his son Max in 1943, while serving in the military in Africa. His son John Jr. died in an automobile accident in 1949; his son James died in a plane crash in 1958. The Senator died in 1977.

McClellan should also be remembered as being one the principal architects of the 1976 Copyright Act. As chair of the Judiciary Committee, he was deeply involved in all aspects of the reform effort. Unlike the House, where subcommittee chair Bob Kastenmeier had the laboring oar rather than full committee chair Manny Cellar of New York, in the Senate it was McClellan who did the work, and with the same fairness he had exhibited with Annie Lee Moss.

Thursday, May 18, 2006

Cops and Copyright

On May 17th, the Ninth Circuit handed down its opinion in Wall Data Inc. v. Los Angeles Sheriff's Department. The opinion has a number of interesting observations on fair use and license restrictions. Plaintiff created terminal emulation software that permitted PCs using one operating system to access data stored on computers using different operating systems. There were two versions of this software, called RUMBA, both of which were, according to plaintiff, licensed, not sold. Defendant Sheriff's department bought 3,663 licenses of the RUMBA software.

Initially, the Sheriff's department manually loaded each piece of software. This is found to be too time-consuming, and so the Sheriff's department resorted to hard disk imaging in which the entire contents of a single "master" hard drive (including RUMBA) were copied on to the other computers. The total number of computers with RUMBA copied on to the hard drives was 6,007, a number far in excess of the number of licenses purchased. In something of an effort not to blow the license terms, the Sheriff's department limited the number of terminals that could access RUMBA at any one time to 3,663, the number of license purchased. Plaintiff wasn't amused and sued.

Both parties moved for summary judgment on fair use, which was denied. The district court reconsidered, though, and granted plaintiff's motion, holding no fair use as a matter of law. The rest of the case then went to a jury, which awarded plaintiff $210,000 in damages. The cops appealed, and lost again.

While there was a Section 117 argument, I will only address fair use. The Ninth Cicruit found the use wasn't transformative, with transformative defined as "where a defendant changes a plaintiff's copyrighted work or uses plaintiff's copyrighted work in a different context such that plaintiff's work is transformed into a new creation." Format changes were not considered a transformative "change." (The court of appeals mistakenly cited to Kelly v. Arriba Soft as ruling on Mp3 files; sloppy work, law clerks). The Sheriff's use was also deemed commercial, as a repeated exploitative copying, and in violation of the license restrictions. The second and third factors were whizzed past on the way to the market factor. Here the court of appeals rejected defendant's argument of efficiency, and that it wouldn't have bought more licenses anyway. Of particular interest is the great solicitude shown to the vulnerability of software copying.

Art Catalogs

Below is a fascinating article from yesterday's Art Newspaper, a British publication that apparently scoops U.S. sources on U.S. issues. Although this dispute involved text, the usual dispute involves inclusion of visual works in art catalogs, something that will no doubt be impacted very substantially by the Second Circuit's recent Bill Graham opinion. Here is the Art Newspaper article:

National Gallery pays out in Vuillard plagiarism suit
By Jason Edward Kaufman Posted 17 May 2006 NEW YORK.
The National Gallery of Art, in Washington, DC, has admitted copyright infringement and agreed to pay two Edouard Vuillard scholars $37,500 for publishing a catalogue that uses their research without authorisation or acknowledgement. As first reported in The Art Newspaper in 2004, Annette Leduc Beaulieu and her husband Brooks Beaulieu filed a copyright infringement suit that year in the US Court of Federal Claims, charging unauthorised use of their material in the exhibition catalogue of the Vuillard retrospective co-published by the National Gallery of Art (NGA) and the Montreal Museum of Fine Arts (MMFA) in 2003. The 520-page catalogue includes essays by Guy Cogeval, the director of the Montreal Museum of Fine Arts and lead curator of the exhibition, as well as by co-curators Kimberly Jones of the National Gallery, Laurence des Cars of the Musée d’Orsay, and Maryanne Stevens of the Royal Academy in London, with contributions by several other scholars. Ms Beaulieu had earlier been contracted by the National Gallery when she was being considered to curate the retrospective. She maintained that research she and her husband submitted was appropriated without their consent for the exhibition catalogue. The federal judge sent the case—Beaulieu vs the United States—to mediation and a settlement was reached in March. Under the terms of the agreement, the director of the National Gallery of Art, Earl A. Powell III, sent a letter to the Beaulieus, dated 27 March 2006, acknowledging that portions of their work “were consulted and used”. The letter states: “As co-publisher of the exhibition catalogue, the National Gallery sincerely regrets the failure to cite your materials and any harm that this may have caused to your personal or professional reputations.” The settlement also resulted in payment of damages of $37,500, an amount that the Beaulieus’ lawyer, Steven P. Hollman of Hogan & Hartson LLP in Washington, DC, says exceeds the $30,000 statutory limit for copyright infringement that would apply if the act had not been willful. He says that the gallery denied wrongdoing even after the exhibition’s curator Kimberly Jones had informed the gallery’s general counsel that she had inadvertently included passages from the Beaulieus’ research. “Continuing to distribute the published manuscript was willful infringement. That is why we insisted they pay more than the statutory range and they agreed,” says Mr Hollman. French case The Beaulieus filed a parallel complaint in 2004 in the Tribunal de Grande Instance de Paris concerning the authors and publishers of the Vuillard catalogue raisonné published in 2003. That case charges copyright infringement by Guy Cogeval, the author; Antoine Salomon, Vuillard’s grandnephew and a catalogue contributor; Mathias Chivot, another contributor; and the catalogue’s co-publishers the Wildenstein Institute, Wildenstein Institute Publications, and Skira Editore. That proceeding is on hold while the court deals with a counter-suit filed by Messrs Salomon, Chivot and Cogeval charging the Beaulieus with forgery and attempted fraud. According to French law, the criminal matter must be resolved before the civil case continues. Regarding the pending French proceedings, lawyers for the Montreal Museum of Fine Arts state: “Mr Cogeval does not contemplate to settle with Mr Beaulieu and Ms Leduc since the proceedings have been suspended for the moment because it has been found that the lawsuit was based on misleading and fraudulent elements, the gravity of which prompted Guy Cogeval and others to file a legal complaint against Mr Beaulieu and Ms Leduc for forgery and use of forged documents, attempted fraud and breach of trust.” The suit was filed “purely for dilatory purposes,” says the Beaulieus’ lawyer Bruce C. Mee, the head of the litigation and arbitration department of DLA Piper Rudnick Gray Cary in Paris. He says the criminal case is based on the fact that whereas the Beaulieu manuscript was registered for copyright purposes in France in 2002, the transcript submitted in the infringement case is dated 2004—the manuscript was printed from a disquette and was automatically redated when the bailiff printed the document, says Mr Mee. “This perfectly illustrates the level of seriousness of the Salomon-Cogeval complaint,” he says, adding that he expects the investigating magistrate to issue a non-lieu (a decision that there is no basis for prosecution). “The Beaulieus reserve their right to seek damages for malicious prosecution, abuse of process in connection with these manoeuvres,” he adds. Mr Cogeval has stated his position in a lengthy rejection of the Beaulieu claim published in The Art Newspaper, in September 2004. In this statement, published under the headline “Nobody owns the details of an artist’s life or work”, he dealt with the two main charges of plagiarism levelled against him, which concerned his “copying” of the technical data describing each work and the compilation of the chronology. Mr Cogeval stated that the technical data was the collective work of generations of researchers, as the inventory cards in the Vuillard archive testify, and that the chronology was essentially a series of historical facts which included significant additions by him and other scholars as well as the Beaulieus. On his interpretation of Vuillard’s life in the catalogue raisonné, he stated that “it would be hard to find even a hint” in the Beaulieus’ work. As soon as the US case was settled, the Montreal Museum of Fine Arts issued a press release declaring the museum and its director “completely exonerated”. Lawyers for the MMFA state: “Mr Cogeval is not part of the [US] settlement and, as such, neither himself nor the MMFA have admitted any type of liability.” “That is laughably absurd. There was no acknowledgement of their lack of responsibility for the copyright infringement,” counters the Beaulieus’ US lawyer Mr Hollman. “Just the opposite: the Beaulieus continue to maintain that Cogeval, the principal author of the catalogue, does bear responsibility, and we believe he himself may have engaged in acts of copyright infringement separately [from the NGA curator]. That issue is one being presented in the French litigation.” Lawyers for the MMFA respond: “Mr Cogeval has always been willing to demonstrate with hard evidence that he has not engaged in any act of copyright infringement whatsoever.” Mr Cogeval has compiled a detailed dossier on the case, which he says exonerates him.

Wednesday, May 17, 2006

Judicial Deference to Copyright Office

The state of deference given by courts to the Copyright Office has been negatively impacted by the muddied state of the Supreme Court jurisprudence on agency deference as well as by some misconceptions held by a few courts about the statute. Neither situation is likely to be improved upon.

The threshold question is what we mean by "deference." Does it mean merely agreeing with the agency interpretation; does it mean disagreeing with the agency's interpretation but following it anyway; does it mean upholding an agency regulation or act; or does it mean something else like an ambiguous statute where, in light of delegated authority, expertise, etc., the court, picking among a number of possible outcomes picks the agency's interpretation? Each of these situations may call for different levels of review or weight under the Supreme Court's trilogy of United States v. Mead Corporation, 533 U.S. 218 (2001); Chevron v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984); and Skidmore v. Swift & Co., 323 U.S. 134 (1944).

The Copyright Act imposes certain obligations on the Copyright Office, for example, to examine applications for registration and to accept or reject them (Section 410). There are also significant duties involving the administration of compulsory licenses. To fulfill these duties, Section 702 authorizes the Register to establish regulations "not inconsistent with law for the administrative of the functions and duties made the responsibility of the Register" under title 17. There are classic Chevron questions, as when the Office promulgates regulations determining what "gross receipts" is under the Section 111 cable compulsory license. There deference was given, Cablevision Systems Development Co. v. MPAA, 836 F.2d 599 (D.C. Cir. 1988), meaning that the regulation was upheld as a valid exercise of authority and had to be followed by the parties. In a more extreme case, the Eleventh Circuit followed the Office's regulation even though it was promulgated in open contradiction to that court's own intepretation of the Act. SBCAA v. Oman, 17 F.3d 344 (11th Cir. 1994).

Other cases involve the Office's interpretation of the statute. Here the record is mixed. In Bartok v. Boosey & Hawkes, Inc., 523 F.2d 941, 946-947 (2d Cir. 1975), the court of appeals stated it would not defer to the Offfice where interpretation of the statute is a question of first impression. The Sixth Circuit also refused to follow the Office's interpretation of the renewal provisions in BMI v. Roger Miller Music, Inc., 396 F.3d 762, 778 (6th Cir. 2005), although in that case the Office's view was expressed in a letter, which was held not to have the force of law. (The Office's views could still be considered for their persuasive value).

Review of examination decisions have also provided a fertile, though unfortunately confused, context for the deference issue. Since Section 410(c) provides prima facie status to a certificate obtained within 5 years of first publication, when reviewing an issued certifiacte it seems odd to talk of deference to the Office; instead, the court is following a statutory presumption. In the most disturbing opinion, Judge Easterbrook's as a district judge in Pivot Point International, Inc. v. Charlene Products, Inc., 170 F. Supp.2d 828 (N.D. Ill. 2001) (later reversed), the statutory presumption was ignored because the Office didn't explain its decision to register. Under Judge Easterbrook's interpretation of Mead, an explanation was necessary to receive deference. But the statute doesn't require the Office explain its decision to register, and the presumption exists by statute flowing from the agency's action, not it explanation of its action. Where there has been a rejection, some courts have given "some deference." In the end, though, in all cases, it is the courts that make the final decision.

Tuesday, May 16, 2006

Cancellation of Registrations

A recent case, Tiseo Architects, Inc. v. SSOE, Inc., 2006 WL 1235164 (E.D. Mich. May 8, 2006), raises the issue of cancellation of registrations. This area is a bit arcane, but needn't be, although there are some issues still unresolved, like whether a court can order the Copyright Office to cancel a registration (I think not), "refer" a question to the Copyright Office (I think not) and whether a private cause of action lies (Again, I think not).

The Copyright Office regulations are spelled out in 37 CFR 201.7. Common reasons for a cancellation are a bounced check, where the registration should not have been made because facts about lack of notice have come out, or because the Office has taken a second look at the existence of the requisite registrable material.

Cancellation serves to preserve the integrity of the Office's records. How the Office becomes aware of the need to cancel a registration is not spelled out, and may be attributable to the Office's historic antipathy toward interference and other types of adversarial proceedings, see 50 Fed. Reg. 3306 n.5 (Aug. 16, 1985). It is my understanding that the Office will never respond favorably to a third party's request to cancel a registration. At the same time, the Office does not foreclose consideration of information received from members of the public, although it will act sua sponte too. It is my understanding that cancellation may be authorized only by Examining Division section heads or higher officials. When the Office proposes to cancel a registration, it will notify the claimant in writing of the reasons and give 30 days from the date of mailing to "show cause" why cancellation should not be made. These procedures arose out of the "Zap Mail" case, Kiddie Rides USA, Inc. v. Curran, 231 USPQ 210 (D.D.C. 1986).

While one does find references in opinions to the ability of courts to cancel registrations, see e.g. Brooks v. Bates, 781 F. Supp. 202, 206 (S.D.N.Y. 1991); Sargeant v. American Greetings Corp., 588 F. Supp. 912, 925 (N.D. Ohio 1984), these opinions are erroneous: under what authority would such power exercised? The Office is not a party to the case, and is a legislative branch agency not statutorily subject to review except under the Administrative Procedures Act. The Tiseo court, referred to above, stated correctly that it lacked such power, as have other courts, see e.g., Leegin Creative Leather Prods. v. M.M. Rogers & Co., 33 USPQ2d 1158 (C.D. Cal. 1994); Xerox Corp. v. Apple Computer, Inc., 734 F. Supp. 1542, 1549 (N.D. Cal. 1990). The correct approach is for the court to hold the registration invalid and order the plaintiff to ask the Copyright Office to cancel the registration, a request it will honor.

Nor can courts "refer" the issue of cancellation to the Copyright Office, under the "primary jurisdiction" or any other doctrine, as the Ninth Circuit apparently thought in Syntek Seminconductor Co. Ltd. v. Microchip Technology, Inc., 307 F.3d 775 (9th Cir. 2002)(and Tiseo following Syntek).

One final point: where the Office does cancel a registration after suit is filed, does the court still have subject matter jurisdiction? The answer is yes: Section 411(a) refers only to registration when the suit is instituted. This unusual situation arose in Macklin v. Mueck, 373 F. Supp.2d 1334 (S.D. Fla. 2005).

Monday, May 15, 2006

eBay and Permanent Injunctions

The Supreme Court just handed down its opinion in the eBay v. MercExchange case, unanimously reversing the Federal Circuit. The issue was the standard to be applied to permanent injunctions under the Patent Act, but there is discussion of copyright injunctions. The Supreme Court rarely speaks on this topic, so it is noteworthy. The Court took a traditional approach, disagreeing with the district court that injunctions should be rare where plaintiff licenses its product, and disagreeing with the court of appeals, which held they are virtually automatic.

Even though the result was unanimous, there are two concurring opinions, dividing on the significance of past licensing practices in granting injunctive relief. The first opinion, by Chief Justice Roberts for himself and Justices Scalia and Ginsburg, is more sympathetic to patent holders, relying on the past practice of courts in granting such relief. The second opinion, by Justice Kennedy for himself and Justices Stevens, Souter, and Breyer, is far less sympathetic to the past as prologue to the future, noting changes in how patents are administered. As in Grokster, a unanimous opinion appears to mask deep divisions on the Court on important issues. There were two Justices who joined neither concurring opinion, Thomas who wrote the main opinion, and Alito.

I doubt this is the last time the Court will face the issue and there is much in the battling concurring opinions for close readers to use in the now inevitable battles in the lower courts, thanks to the Supreme Court's inability to get its act together.

Here is the opinion in full:

No. 05-130
United States Supreme Court.
Argued March 29, 2006Decided May 15, 2006
FN* The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.Petitioners operate popular Internet Web sites that allow private sellers to list goods they wish to sell. Respondent sought to license its business method patent to petitioners, but no agreement was reached. In respondent’s subsequent patent infringement suit, a jury found that its patent was valid, that petitioners had infringed the patent, and that damages were appropriate. However, the District Court denied respondent’s motion for permanent injunctive relief. In reversing, the Federal Circuit applied its “general rule that courts will issue permanent injunctions against patent infringement absent exceptional circumstances.” 401 F. 3d 1323, 1339. Held: The traditional four-factor test applied by courts of equity when considering whether to award permanent injunctive relief to a prevailing plaintiff applies to disputes arising under the Patent Act. That test requires a plaintiff to demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law are inadequate to compensate for that injury; (3) that considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction. The decision to grant or deny such relief is an act of equitable discretion by the district court, reviewable on appeal for abuse of discretion. These principles apply with equal force to Patent Act disputes. “[A] major departure from the long tradition of equity practice should not be lightly implied.” Weinberger v. Romero—Barcelo, 456 U. S. 305, 320. Nothing in the Act indicates such a departure. Pp. 2-6.401 F. 3d 1323, vacated and remanded.Thomas, J., delivered the opinion for a unanimous Court. Roberts, C. J., filed a concurring opinion, in which Scalia and Ginsburg, JJ., joined. Kennedy, J., filed a concurring opinion, in which Stevens, Souter, and Breyer, JJ., joined.ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUITJustice Thomas delivered the opinion of the Court.Ordinarily, a federal court considering whether to award permanent injunctive relief to a prevailing plaintiff applies the four-factor test historically employed by courts of equity. Petitioners eBay Inc. and, Inc., argue that this traditional test applies to disputes arising under the Patent Act. We agree and, accordingly, vacate the judgment of the Court of Appeals.
IPetitioner eBay operates a popular Internet Web site that allows private sellers to list goods they wish to sell, either through an auction or at a fixed price. Petitioner, now a wholly owned subsidiary of eBay, operates a similar Web site. Respondent MercExchange, L. L. C., holds a number of patents, including a business method patent for an electronic market designed to facilitate the sale of goods between private individuals by establishing a central authority to promote trust among participants. See U. S. Patent No. 5,845,265. MercExchange sought to license its patent to eBay and, as it had previously done with other companies, but the parties failed to reach an agreement. MercExchange subsequently filed a patent infringement suit against eBay and in the United States District Court for the Eastern District of Virginia. A jury found that MercExchange’s patent was valid, that eBay and had infringed that patent, and that an award of damages was appropriate.FN1Following the jury verdict, the District Court denied MercExchange’s motion for permanent injunctive relief. 275 F. Supp. 2d 695 (2003). The Court of Appeals for the Federal Circuit reversed, applying its “general rule that courts will issue permanent injunctions against patent infringement absent exceptional circumstances.” 401 F. 3d 1323, 1339 (2005). We granted certiorari to determine the appropriateness of this general rule. 546 U. S ___ (2005).
IIAccording to well-established principles of equity, a plaintiff seeking a permanent injunction must satisfy a four-factor test before a court may grant such relief. A plaintiff must demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction. See, e.g., Weinberger v. Romero—Barcelo, 456 U. S. 305, 311-313 (1982); Amoco Production Co. v. Gambell, 480 U. S. 531, 542 (1987). The decision to grant or deny permanent injunctive relief is an act of equitable discretion by the district court, reviewable on appeal for abuse of discretion. See, e.g., Romero-Barcelo, 456 U. S., at 320.These familiar principles apply with equal force to disputes arising under the Patent Act. As this Court has long recognized, “a major departure from the long tradition of equity practice should not be lightly implied.” Ibid.; see also Amoco, supra, at 542. Nothing in the Patent Act indicates that Congress intended such a departure. To the contrary, the Patent Act expressly provides that injunctions “may” issue “in accordance with the principles of equity.” 35 U. S. C. §283.FN2To be sure, the Patent Act also declares that “patents shall have the attributes of personal property,” §261, including “the right to exclude others from making, using, offering for sale, or selling the invention,” §154(a)(1). According to the Court of Appeals, this statutory right to exclude alone justifies its general rule in favor of permanent injunctive relief. 401 F. 3d, at 1338. But the creation of a right is distinct from the provision of remedies for violations of that right. Indeed, the Patent Act itself indicates that patents shall have the attributes of personal property “[s]ubject to the provisions of this title,” 35 U. S. C. §261, including, presumably, the provision that injunctive relief “may” issue only “in accordance with the principles of equity,” §283.This approach is consistent with our treatment of injunctions under the Copyright Act. Like a patent owner, a copyright holder possesses “the right to exclude others from using his property.” Fox Film Corp. v. Doyal, 286 U. S. 123, 127 (1932); see also id., at 127-128 (“A copyright, like a patent, is at once the equivalent given by the public for benefits bestowed by the genius and meditations and skill of individuals, and the incentive to further efforts for the same important objects” (internal quotation marks omitted)). Like the Patent Act, the Copyright Act provides that courts “may” grant injunctive relief “on such terms as it may deem reasonable to prevent or restrain infringement of a copyright.” 17 U. S. C. §502(a). And as in our decision today, this Court has consistently rejected invitations to replace traditional equitable considerations with a rule that an injunction automatically follows a determination that a copyright has been infringed. See, e.g., New York Times Co. v. Tasini, 533 U. S. 483, 505 (2001) (citing Campbell v. Acuff-Rose Music, Inc., 510 U. S. 569, 578, n. 10 (1994)); Dun v. Lumbermen’s Credit Assn., 209 U. S. 20, 23-24 (1908).Neither the District Court nor the Court of Appeals below fairly applied these traditional equitable principles in deciding respondent’s motion for a permanent injunction. Although the District Court recited the traditional four-factor test, 275 F. Supp. 2d, at 711, it appeared to adopt certain expansive principles suggesting that injunctive relief could not issue in a broad swath of cases. Most notably, it concluded that a “plaintiff’s willingness to license its patents” and “its lack of commercial activity in practicing the patents” would be sufficient to establish that the patent holder would not suffer irreparable harm if an injunction did not issue. Id., at 712. But traditional equitable principles do not permit such broad classifications. For example, some patent holders, such as university researchers or self-made inventors, might reasonably prefer to license their patents, rather than undertake efforts to secure the financing necessary to bring their works to market themselves. Such patent holders may be able to satisfy the traditional four-factor test, and we see no basis for categorically denying them the opportunity to do so. To the extent that the District Court adopted such a categorical rule, then, its analysis cannot be squared with the principles of equity adopted by Congress. The court’s categorical rule is also in tension with Continental Paper Bag Co. v. Eastern Paper Bag Co., 210 U. S. 405, 422-430 (1908), which rejected the contention that a court of equity has no jurisdiction to grant injunctive relief to a patent holder who has unreasonably declined to use the patent.In reversing the District Court, the Court of Appeals departed in the opposite direction from the four-factor test. The court articulated a “general rule,” unique to patent disputes, “that a permanent injunction will issue once infringement and validity have been adjudged.” 401 F. 3d, at 1338. The court further indicated that injunctions should be denied only in the “unusual” case, under “exceptional circumstances” and “ ‘in rare instances . . . to protect the public interest.’ ” Id., at 1338-1339. Just as the District Court erred in its categorical denial of injunctive relief, the Court of Appeals erred in its categorical grant of such relief. Cf. Roche Products v. Bolar Pharmaceutical Co., 733 F. 2d 858, 865 (CAFed 1984) (recognizing the “considerable discretion” district courts have “in determining whether the facts of a situation require it to issue an injunction”).Because we conclude that neither court below correctly applied the traditional four-factor framework that governs the award of injunctive relief, we vacate the judgment of the Court of Appeals, so that the District Court may apply that framework in the first instance. In doing so, we take no position on whether permanent injunctive relief should or should not issue in this particular case, or indeed in any number of other disputes arising under the Patent Act. We hold only that the decision whether to grant or deny injunctive relief rests within the equitable discretion of the district courts, and that such discretion must be exercised consistent with traditional principles of equity, in patent disputes no less than in other cases governed by such standards.Accordingly, we vacate the judgment of the Court of Appeals, and remand for further proceedings consistent with this opinion.It is so ordered.
FN1. EBay and continue to challenge the validity of MercExchange’s patent in proceedings pending before the United States Patent and Trademark Office.
FN2. Section 283 provides that “[t]he several courts having jurisdiction of cases under this title may grant injunctions in accordance with the principles of equity to prevent the violation of any right secured by patent, on such terms as the court deems reasonable.”Chief Justice Roberts, with whom Justice Scalia and Justice Ginsburg join, concurring.I agree with the Court’s holding that “the decision whether to grant or deny injunctive relief rests within the equitable discretion of the district courts, and that such discretion must be exercised consistent with traditional principles of equity, in patent disputes no less than in other cases governed by such standards,” ante, at 5, and I join the opinion of the Court. That opinion rightly rests on the proposition that “a major departure from the long tradition of equity practice should not be lightly implied.” Weinberger v. Romero—Barcelo, 456 U. S. 305, 320 (1982); see ante, at 3.From at least the early 19th century, courts have granted injunctive relief upon a finding of infringement in the vast majority of patent cases. This “long tradition of equity practice” is not surprising, given the difficulty of protecting a right to exclude through monetary remedies that allow an infringer to use an invention against the patentee’s wishes-a difficulty that often implicates the first two factors of the traditional four-factor test. This historical practice, as the Court holds, does not entitle a patentee to a permanent injunction or justify a general rule that such injunctions should issue. The Federal Circuit itself so recognized in Roche Products, Inc. v. Bolar Pharmaceutical Co., 733 F. 2d 858, 865-867 (1984). At the same time, there is a difference between exercising equitable discretion pursuant to the established four-factor test and writing on an entirely clean slate. “Discretion is not whim, and limiting discretion according to legal standards helps promote the basic principle of justice that like cases should be decided alike.” Martin v. Franklin Capital Corp., 546 U. S. ___, ___ (2005) (slip op., at 6). When it comes to discerning and applying those standards, in this area as others, “a page of history is worth a volume of logic.” New York Trust Co. v. Eisner, 256 U. S. 345, 349 (1921) (opinion for the Court by Holmes, J.).Justice Kennedy, with whom Justice Stevens, Justice Souter, and Justice Breyer join, concurring.The Court is correct, in my view, to hold that courts should apply the well-established, four-factor test-without resort to categorical rules-in deciding whether to grant injunctive relief in patent cases. TheChief Justice is also correct that history may be instructive in applying this test. Ante, at 1-2 (concurring opinion). The traditional practice of issuing injunctions against patent infringers, however, does not seem to rest on “the difficulty of protecting a right to exclude through monetary remedies that allow an infringer to use an invention against the patentee’s wishes.” Ante, at 1 (Roberts, C. J., concurring). Both the terms of the Patent Act and the traditional view of injunctive relief accept that the existence of a right to exclude does not dictate the remedy for a violation of that right. Ante, at 3-4 (opinion of the Court). To the extent earlier cases establish a pattern of granting an injunction against patent infringers almost as a matter of course, this pattern simply illustrates the result of the four-factor test in the contexts then prevalent. The lesson of the historical practice, therefore, is most helpful and instructive when the circumstances of a case bear substantial parallels to litigation the courts have confronted before.In cases now arising trial courts should bear in mind that in many instances the nature of the patent being enforced and the economic function of the patent holder present considerations quite unlike earlier cases. An industry has developed in which firms use patents not as a basis for producing and selling goods but, instead, primarily for obtaining licensing fees. See FTC, To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy, ch. 3, pp. 38-39 (Oct. 2003), available at (as visited May 11, 2006, and available in Clerk of Court’s case file). For these firms, an injunction, and the potentially serious sanctions arising from its violation, can be employed as a bargaining tool to charge exorbitant fees to companies that seek to buy licenses to practice the patent. See ibid. When the patented invention is but a small component of the product the companies seek to produce and the threat of an injunction is employed simply for undue leverage in negotiations, legal damages may well be sufficient to compensate for the infringement and an injunction may not serve the public interest. In addition injunctive relief may have different consequences for the burgeoning number of patents over business methods, which were not of much economic and legal significance in earlier times. The potential vagueness and suspect validity of some of these patents may affect the calculus under the four-factor test.The equitable discretion over injunctions, granted by the Patent Act, is well suited to allow courts to adapt to the rapid technological and legal developments in the patent system. For these reasons it should be recognized that district courts must determine whether past practice fits the circumstances of the cases before them. With these observations, I join the opinion of the Court.

Section 115 Amendment

Tomorrow the U.S. House of Representatives IP subcommittee will hold a hearing on a draft bill to amend Section 115. Here is a short sectional analysis and here is the draft bill (a new link). Kudos to chair Lamar Smith and subcommittee counsel Joe Keeley for having such an open process. The subcommittee conducted a number of roundtable sessions, vetted issues through the Copyright Office, and has now circulated the draft in advance of the hearing, as well as having the hearing, which one can watch via a live webcast here.

The issues dealt with in Section 115 have a long history, going back to the pre-1909 Act days, when the Aeolian player piano company hit upon an idea that will have resonance today: consumers would buy more of its pianos if it sewed up exclusive deals with copyright owners of musical compositions. You want to hear "Melancholy Baby," you have to buy Aeolian. This arrangement came out during congressional hearings on the general revision, where one of the issues was whether to give musical copyright owners the exclusive right to reproduce their works. Meanwhile, a sweetheart lawsuit was moving forward to test whether the existing law gave such right. If not, Aeolian's deal with the publishers stated they didn't have to pay. In White-Smith Publishing Co. v. Apollo Co., 209 U.S. 1 (1908), the Court held that to be a copy the work had to be visually perceptible. The perforations were not deemed to be a visually perceptible representation of the musical composition, hence no infringement. But this also meant that player piano player companies did not have to pay for the use.

Congress stepped in and created the world's first compulsory license: once the copyright owner authorized a first mechanical reproduction, anyone else could make another such reproduction, upon paying a statutory 2 cent fee, which stayed in place until 1978. No other subject matter is treated this way, and the problems caused by the Aeolian company's attempt to corner the market for its pianos was better rectified by the antitrust laws. In 1993, in early negotiations on what became the Digital Performance Right in Sound Recordings Act, I and subcommittee chief counsel Hayden Gregory succeeded in persuading the record labels to agree to repeal of Section 115. To our great surprise, the music publishers, who had long complained about the provision, insisted that it remain. Their objective was expand Section 115 to include digital distribution. Professor Paul Goldstein told subcommitte chair William Hughes that this was a bad idea, that it was saddling the 21st century with a 19th century fix. Professor Goldstein was dead-on right.

The legislation did not move in 1993 or 1994 because Mr. Hughes could not agree to a number of provisions in drafts (especially regarding broadcasters), but when it did move in 1995 under the new House, with Carlos Moorhead as chair, Section 115 was greatly expanded to include "digital phonorecord deliveries," known affectionately as "dpds."

The new draft bill that will be discussed tomorrow attempts to find a more efficient solution to the expanded version of 115, by mandating in new 115(e) blanket licensing of dpds in the form of "full downloads," "limited downloads," and "interactive streams," terms defined in the draft. There is also a royalty free license for ephemeral copying made as part of non-interactive streaming covered by the Section 114 compulsory license. There are very detailed provisions on designation of agents for issuing the new blanket license and for rate setting.

Friday, May 12, 2006

Removal, Preemption, Publicity Rights

Slightly over a year ago, I posted a story about the Seventh Circuit's changing its mind on the right of publicity being preempted in the Toney case. The new opinion held the right wasn't, generally, preempted. The word "generally" is mine, because the name one puts on a cause of action is the pleader's choice and may or may not be wholly accurate. Anyone who has read even a few dozen preemption cases, especially in the unfair competition or breach of contract areas, quickly realizes that labels are not necessarily descriptive; they may mask less than candid efforts to avoid preemption. But in other cases, the scope of the state law in question may not be well-defined, and the pleader is making a good faith effort to make new law.

Preemption and jurisdiction collide typically in two possible ways, first in a federal action for copyright infringement when supplemental state law claims are attached; second in a state court action where the claimant asserts causes of action only under state law. Defendant in the state law case may think that the causes pled are really federal claims in disguise. Such a defendant has two choices. Remain in state court and assert that the claim is preempted, in which event the state court will decide the question; or, remove the case to federal court under 28 USC section 1441. The federal court will then decide if the cause of action is preempted. While the preemption analysis will be the same in both state and federal court, the burden is on the party seeking removal.

Here is where the word "generally" comes back in play. Let's say a plaintiff in state court asserts violation of a state right of publicity, generally not preempted and therefore not properly removable. But what if the right allegedly violated is not like in Toney an exact replica of the plaintiff's image, but is instead something else, like use of a fictional character that plaintiff performed as? This issue was recently addressed in Stanford v. Caesar's World Entertainment, 2006 WL 1214960 (M.D. Tenn. May 1, 2006). The character "Loose Slot Louie" (see the name of defendant in the caption) was part of an advertising campaign. Plaintiff executed a release, but claimed that there was inadequate consideration and that the release was otherwise limited to specific uses.

Distinguishing Tony, the court found that the use was not of a likeness of plaintiff's personal traits, but rather of an advertisement in which a fictional character played by plaintiff appeared. This advertisement was within the scope of copyright and the use in question was of the advertisement, therefore the claim was preempted and properly removed. Not all right of publicity claims are the same.

Wednesday, May 10, 2006

Lawyers Copying Lawyers

Peter Lattman at the WSJ Online had this posting a few days ago:"Plagiarism is right up there with patents and the price of oil as topics du jour. Witness the rise and fall of Harvard sophomore Kaavya Viswanathan, whose hot chick-lit book ended up being pulled from the shelves amid plagiarism accusations. Then there was the humiliation suffered by Raytheon CEO William Swanson after a blogger revealed that at least half of his popular “Swanson’s Unwritten Rules of Management” was filched from other tomes.This got the Law Blog thinking: What about law firms that copy other law firms’ litigation papers? After all, with the Internet making it a snap to appropriate other law firms’ court filings, doesn’t plagiarism run rampant in the legal profession. Lo and behold, the Missouri Law Review will soon publish this article by Davida Isaacs, a professor at the Salmon P. Chase College of Law, on the validity of copyright infringement claims based on the unauthorized use of litigation documents.Several years back the now-beleaguered Milberg Weiss Bershad Hynes & Lerach made headlines when it threatened to file copyright infringement lawsuits against other law firms that borrowed language from Milberg’s court filings. Citing another example of an attorney threatening another with a copyright infringement claim, Isaacs suggests “that infringement suits against fellow members of the Bar may be on the horizon.”Isaacs, who practiced at Kaye Scholer in NY and Venable in D.C. before joining academia, argues that while most litigation documents contain elements entitled to copyright protection, subsequent use of those documents qualifies as “fair use” under the copyright laws. Fair use exists, she says, because adopting another firms’ litigation documents does not diminish those documents’ market value. In addition, regular licensing arrangements of court filings would be untenable. She also concludes that copyright actions would deter attorneys from adapting litigation papers, which would increase the cost of quality legal representation and impair the legal system’s efficiency.In effect, Professor Isaacs writes, copy away:'Every day, lawyers sit at their desks, struggling to find the right words to use in a complaint or a memorandum of law, with the hopes that those words will persuade the court or the other side of the correctness of their client’s position. A substantial number of these lawyers turn to another attorney’s work for language – sometimes simply a particularly clear paragraph describing a complex legal issue, and sometimes a larger portion containing an especially cogent legal argument – and incorporate it into their own document. This process has almost certainly been repeated for decades, and most likely for centuries. While a superficial analysis might lead the “fair use” defense to be rejected because allegedly infringing litigation documents are used for the same purpose as the original works, in few places in society do the broad protections of copyright law make less sense than in the area of litigation.'"The availability of briefs on Westlaw, at the Supreme Court's and other courts' websites also makes the process of copying briefs much easier. The creme de la creme Supreme Court firm of Goldstein & Howe has many briefs on its website, helpfully broken down by categories, consistent with the firm's extremely laudatory efforts to foster a skilled Supeeme Court bar through clinics at law schools. There are times when lawyers love to have their work product copied verbatim, for example, by the judge they are in front of. I have heard many lawyers crow in reading an opinion that "this was lifted right out of our brief, word for word." I had a less pleasing experience many years ago in the Second Circuit when the late Irving Kaufman, in a fair use opinion in a case I was not involved in, copied verbatim passages from my fair use treatise without attribution, down to the way I had capitalized things. Scholars too love to be copied, but with attribution.Verbtaim copying by judges happens most often in the factual recitation of an opinion, but it can and does happen in the analysis section. With findings of fact and conclusions of law, judges frequently merely endorse one side's work product. But what about laywers copying from lawyers in unrelated cases? In addition to Professor Isaacs' forthcoming article, Judge Stanley Birch of the Eleventh Ciircuit took a look at the issue in "Copyright Protection for Attorney Work Product: Practical and Ethical problems," 10 J. Intell. Prop. L. 255 (2003), suggesting to a firend whose work was copied, "sue the bastards for copyright infringement." Lisa Wang in a law review note looked at protectibility, "The Copyrightability of Legal Complaints," 45 B.C.L. Rev. 705 (2004).I have no doubt that a brief as a whole is copyrightable, but there are a number of different scenarios where copying may or may not be excused and which therefore raise different issues. Most lawyers I think would be upset if a great brief was copied in whole with a different firms' name slapped on. Lifting research is common and unobjectionable, as is the copying of winning little passages. Lifting whole parts to demonstrate that the lawyer has taken a different position in a past case is a common tactic (whether it is relevant if done for a different client is a different question). In the end, for the most egregious examples, courts and bar associations are probably the better venue for complaints than a copyright suit.

Tuesday, May 09, 2006

Smithsonian Slapped Down

Following up on the earlier posting about the Smithsonian's deal with Showtime, Boing-Boing ("A Directory of Wonderful Things") has provided updates on the House of Representatives' slapping the Institute, first in this letter and then in the 2007 Appropriations bill. The House Appropriations committee requested that the Board of Regents take the matter up at its May meeting and report back to it within 90 days regarding the committee's concern that the agreement violated the letter if not the spirit of the Smithsonian Trust. And to get the point across doubly, Boing-Boing reports that the proposed budget would contain language precluding such deals and would reduce the budget by $5 million dollars. Ouch!

Monday, May 08, 2006

Clarity About the Fourth Fair Use Factor

The Sunday New York Times Business Section ran a story by Randall Stross entitled "Someone Has to Pay for TV. But Who? And How?, accompanied by a large glossy (posed) photograph of a well-dressed young man handcuffed from behind and holding a TV remote control. The story begins with the author's reading of a patent application filed by Royal Philips Electronics, described as "threaten[ing] the inalienable right to channel-surf during commercials or fast-forward through ads in programs you've taped," or, alternatively, as "uphold[ing] the right to avoid commercials, but only for those who would pay a fee." The author calls this a "pay to surf" technology, where viewers are disabled from skipping commercials unless they pay to skip them.

Mr. Stross then goes on more generally to discuss the effect of Digital Video Recorders on advertising revenues, and how things will have to change: someone will have to pay for the privilege of having advertising-supported free television, something of a paradox it would seem, but it is clear that Philips has the public in mind in fingering who should pay for "free" TV. The Supreme Court's Sony decision is mentioned, and two law professors are quoted about how a Sony decision might be affected by the future existence of the pay-to-surf technology. Apparently, at least one of the professors believes that the existence of a revenue-generating source from consumers who do not want to watch commercials would be a "compelling fact that would have made a difference" in the Sony case. An inflammatory remark four years ago by Jamie Kellner, then head of Turner Broadcasting System, in an interview in CableWorld magazine that viewers who use their DVRs to fast forward past comemrcials were committing "theft," and "stealing the programming" was also noted.

Mr. Kellner's and the law professor's comments serve to put important issues in play, though, such as how copyright, and fair use in particular, are being warped to deal with noncopyright issues. The Sony case was not "about" copying at all, and certainly not about copying of free over-the-air broadcasting for which there was no secondary market in the late 1970s when the suit was brought. Instead, Sony arose out of Hollywood's fears that fast-forwarding through commercials would decrease the amount paid by advertisers, a fear that it retains 30 years later. In the later 1970s, the Nielsen company was figuring out how to factor VCR viewing into its ratings, and the handwriting was on the wall for future contracts between the content owners and the networks as well as between the networks and their advertisers. (One can read about this in James Lardner's classic 1987 Fast Forward: Hollywood, the Japanese, and the Onslaught of the VCR.

To be clear, then about Sony: the fourth factor analysis of harm to the market for the copyrighted work was a bunch of hoo-ha in that case. The fourth factor concerns ways in which copying of the work itself damages similar or otherwise relevant markets for the particular type of copying done by defendant. The fourth factor most certainly does not concern harm to advertisers, nor does it reach reduced advertising revenues because viewers are not copying or not viewing a third party's works, i.e., the advertisements. Sony, properly understood, did not deal with copying of the works in question at all. Whatever else one thinks about how to deal with the issue of advertising, we should not distort basic principles of fair use, when the real issues lie outside of copyright altogether.

Friday, May 05, 2006

Pleading Problems of Extraterritoriality

As a general matter, statutes are not extraterritorial. Congress can make them extraterritorial, and in some areas have, like the Sherman Act, Congress has. The Copyright Act is not extraterritorial, although some courts have permitted recovery for overseas acts where the original infringement occurred in the United States. As a pleading matter, where plaintiff has claimed liability for overseas acts how does the defendant respond? Does defendant assert the court lacks subject matter jurisdiction under FRCP 12(b)(1), or instead that plaintiff has failed to state a claim upon wehich relief can be granted under FRCP 12(b)(6)?

The distinction between subject matter jurisdiction and an element of the claim is not always easy to discern and in some areas is subject to a healthy disagreement among judges, beginning with the debate between Justices Souter (for the majority on this issue) and Scalia (dissenting on this issue) in Hartford Fire Insurance Co. v. California, 509 U.S. 764 (1993). Justice Scalia believed that the extraterritorial reach of the Sherman Act has nothing to do with the jurisdiction of the courts. According to Justice Scalia: “It is a question of substantive law turning on whether, in enacting the Sherman Act, Congress asserted regulatory power over the challenged conduct. … If the plaintiff fails to prevail on this issue, the court does not dismiss the claim for want of subject-matter jurisdiction – want of power to adjudicate; rather, it decides the claim, ruling on the merits that the plaintiff has failed to state a cause of action under the relevant statute …”

The Souter-Scalia debate was replayed in the Seventh Circuit’s en banc opinion in United Phosphorus Ltd. v. Angus Chemical Co. 322 F.3d 942 (7th Cir. 2003) (en banc). where a 5-4 split saw Judge Evans’ majority opinion holding that the 1982 Federal Trade Antitrust Improvements Act, an amendment to the Sherman Act was jurisdictional, while Judge Wood, writing for herself and three others, believed the relevant provision was an element of the cause of action. Judge Wood was particularly concerned about stripping the federal courts “of their competence to hear and decided antitrust cases with a foreign element.” She also ticked off a number of practical issues, such as the ability to challenge subject matter jurisdiction at any time in the proceedings, something that is not the case with the alternative approach of a Rule 12(b)(6) motion to dismiss for failure to state a claim.

A number of other courts have referred to questions regarding extraterritorial application of statutes as involving subject matter jurisdiction, and it is common to refer to the extraterritoriality of the Lanham Act as involving a subject matter inquiry. In cases under the Copyright Act, courts uniformly have the issue as involving subject matter jurisdiction.

Most recently, in Arbaugh v. Y&H Corp. 126 S.Ct. 1235 (2006) the Supreme Court addressed whether the limitation in 42 U.S.C.A. §200e(b) that title VII suits may be brought only if the defendant business has “fifteen or more employees” was a subject matter jurisdiction requirement or an element of the cause of action. Defendant had stipulated to subject matter jurisdiction; the case was tried to a jury which found for plaintiff. The court entered verdict for plaintiff. In a post-trial motion, defendant for the first time asserted that it had fewer than 15 employees and that this fact deprived the court of subject matter jurisduiction, requiring vacating the judgment and dismissing the case. Although the trial court rightly stated that to do so was “unfair and a waste of judicial resources,” it granted plaintiff’s motion. The Fifth Circuit affirmed. The Supreme Court reversed.

Acknowledging that its own use of the term “jurisdictional” had been inconsistent, the Court remarkably did nothing to provide a consistent analytical framework. At bottom, the Court merely noted a parade of horribles that resulted when a particular challenge was classified as involving subject matter jurisdiction, and threw the matter at Congress’s feet: if Congress wants the numerosity requirement to be one of subject matter jurisdiction, the Court said please amend the statute to say so. One can agree that defendant’s behavior in Arbaugh was reprehensible, and that the numerosity requirement should not, as a policy matter, concern subject matter jurisdiction in order to prevent future such efforts, but it is hard to find any analytical foundation supporting the Court’s opinion. Even worse, the Court gratuitously called into question its earlier opinion in EEOC v. Aramco by stating: “En passant, we copied the petitioners’ characterizations of terms included in Title VII’s ‘Definitions’ section … as ‘jurisdictional.” See 499 U.S. at 249, 251, 253.” As the citation here reveals, “en passant” happened three times. The Arbaugh Court didn’t come out and say that the issue of extraterritoriality in Aramco wasn’t one of subject matter jurisdiction – as the lower court in that very case had held - only that in Aramco “we were not prompted … to home in on whether the dismissal had been properly based on the absence of subject-matter jurisdiction rather than on the plaintiff’s failure to state a claim. 499 U.S. at 247.” Such revisionism might be defensible – if still inaccurate – if the Arbaugh Court had gone on and stated what it thought the basis for dismissal in Aramco should have been, but it didn’t. Gratuitously calling into question the basis for one of its own decisions without then supplying the answer is very unhelpful. There is, moreover, nothing in the Court’s parade of horribles for challenging the numerosity requirement in title VII that is unique to such suits, and which does not apply with equal validity to all subject matters jurisdiction challenges, including ones the Court itself would readily acknowledge are subject matter jurisdictional issues.

The current state of the law then is unsettled, and that’s not good.

Thursday, May 04, 2006

Copyright is Not a Transitory Tort

In a comment on Monday’s posting about infringement by the Burundi government, reference was made to the possibility of a cause of action for a “transitory tort” under a mischaracterization by the late Professor Melville Nimmer, and swallowed, hook, line, and sinker in London Film Productions, Ltd. v. Intercontinental Communications, Inc., 580 F. Supp. 47 (S.D.N.Y. 1984), which asserted diversity jurisdiction under 28 U.S.C.A. §1332(a)(2) over foreign acts of copyright infringement. In that case, the court adjudicated alleged infringement by an American corporation in several South American countries of a British corporation’s copyright. The work was in the public domain in the United States. Judge Carter, based jurisdiction on copyright allegedly being a “transitory tort,” and offered the following inconsistent policy justifications for asserting jurisdiction:

The Court has an obvious interest in securing compliance with this nation’s laws by citizens of foreign nations who have dealings within this jurisdiction. A concern with the conduct of American citizens in foreign countries is merely the reciprocal of that interest. An unwillingness by this Court to hear a complaint against its own citizens with regard to a violation of foreign law will engender, it would seem, a similar unwillingness on the part of a foreign jurisdiction when the question arises concerning a violation of our laws by one of its citizens who has since left our jurisdiction.

The Court’s interest in adjudicating copyright infringements by foreign citizens that occur in the court’s district is statutorily provided for by Congress in Section 501 of title 17 USC and in 28 USC 1338(a). Nothing a foreign court could or could not do can affect that power. Conversely, if an American infringes a British work in Britain, the British courts will hear the claim because they too would be doing so pursuant to a domestic statute. British courts certainly would not decline to hear such a case because at some earlier time a U.S. court had refused to hear a case against an American citizen for infringement of a British work occurring in Chile. In London Film Productions, there was no U.S. copyright violation because the work was in the public domain here. Should we expect a British court to hear a case brought by a U.S. citizen involving an alleged infringement of copyright in South America by a British citizen when the work is in the public domain in England merely because the bad boy was British? If so, we would have been sorely disappointed: at the time of the London Film Productions decision, English courts declined jurisdiction over British citizens’ claims of overseas infringement against other British citizens even where the work was still protected by copyright in England.

Diversity jurisdiction was supposedly justified by copyright infringement being a “transitory tort.” Why is copyright allegedly a transitory tort? Because it was declared that copyright is an incorporeal form of property, and therefore “has no situs apart from the domicile of its proprietor.” Presumably, if the proprietor moves, the situs of the property moves too. But if the proprietor doesn’t move, the situs must remain with the proprietor; in London Film Productions this meant in England, indicating England not the United States, was the appropriate jurisdiction. Under this reasoning, a U.S. court would never have jurisdiction to hear a claim of infringement of a foreign copyright unless the foreign copyright owner was domiciled in the United States. Copyright is not a personal right which attaches to the individual and follows him or her wherever the individual travels. Instead, it is a territorially derived property right which exists by virtue of a national grant. Whether another nation decides to grant a similar property right is a matter for the legislation in each nation. Transitory torts are personal rights, not property rights. This characterization confuses the incorporeal nature of the copyright property right with personal rights; the two are quite different and the consequences quite different. As a property right rather than a personal right, copyright cannot be a transitory tort.
Additionally, the history of transitory torts also reveals that it is incorrect to describe copyright being a transitional tort. The history behind the local versus transitory distinction is an ancient one in Great Britain. The most critical point is that the issue arose in the context of venue, not subject matter jurisdiction. The distinction was originally drawn in order to determine whether a case should be brought in the county where the event occurred or in some other country. Venue was mandatory in the county where the event occurred when the jury needed to have knowledge of particular facts; where no such knowledge was necessary, plaintiff was permitted to bring suit in any county over which personal jurisdiction against the defendant would lie.
Although fictions were later developed permitting suits to be brought even where local knowledge was required, in the case of copyright, this was not extended to causes of action that arose outside of England. Until England’s adherence to the Brussels Convention on Jurisdiction and Enforcement in Civil and Commercial Matters in 1982 and subsequent English acts that implemented that convention, English courts uniformly refused to hear cases of infringement that occurred overseas, taking the position that copyright infringement was a local and not a transitory tort. The basis for the court’s refusal to hear the case was the distinction between local and transitory torts. Finding that copyright is a local and not a transitory torts, the court held it was without jurisdiction to hear a complaint about infringement that would occur (if at all) in the United States. It is noteworthy that the very recent change in English courts’ willingness to hear claims of overseas infringement, see Pearce v. Ove Arup Partnership Ltd., [1999- 1 All. Er. 769, came for reasons entirely associated with adherence to the Brussels Convention, not because of a change in the characterization of the cause of action. It is completely wrong to assert that copyright is a transitory tort.

The Second Circuit has seemingly disavowed London Films Productions’ approach, rejecting plaintiff’s reliance on that opinion in Murray v. BBC, 82 F.3d 287, 293 (2d Cir. 1986). with the dismissive remark: “We are, quite frankly, at a loss to see how this lawsuit has any but the most attenuated American connection,” a comment that applies even more strongly to London Films.

Monday, May 01, 2006

Waldo Moore

I want to pay homage to a friend who died slightly over two years ago, Waldo Moore. Born in Mississippi during the Depression, he moved eventually to Washington D.C., a town President Kennedy once described as a city of Southern efficiency and Northern charm. He graduated from the George Washington Law School in 1949. Here is a link to an obituary notice from GW that provides a few details and a picture. In 1951 he joined the Copyright Office, where he stayed for 35 years, a not unusual period of time. I don't know what his initial positions were, but he eventually served as Chief of the Reference Division, Assistant Register of Copyrights for Registration, retiring as an Associate Register in 1986. In 1961 he became the Assistant Chief of the Examining Division, taking Barbara Ringer's position when she moved up to Chief. I came to the Office shortly after Waldo retired, but knew him before then and visited with him on those occasions when he came to the Office. I deeply regret not having joined the Office earlier in order to have learned more from him.

And there was an amazing amount one could learn from Waldo. The 35 years he served in the Office were momentous ones, under such legendary Registers as Abraham Kaminstein and Barbara Ringer. Those who are not familiar with this era or who have come to copyright in the post-DMCA world, will find it difficult to fully appreciate the greatness of these figures. Their knowledge, institutional memory, commitment to copyright as a balancing of proprietary rights and the public interest, love of the arts, and devoted public service were taken for granted, although they shouldn't have been. Waldo was one of the Office's repository of history; not only did he live through great historical periods, he was steeped in the eras that came before him. One felt, through him, even a remote connection to the first Register, Thorvald Solberg who served 33 years, from 1897 to 1930. Waldo was extremely generous with his time and knowledge, and unfailing courteous. He never lost his Southern gentlemanly ways (or dress). I adored him.

Bejamin Kaplan, in living nine decades has seen alot too, but while his principal publication on copyright is still cited, the story behind the title does not seem to be remarked on often, although Lloyd Weinrib did, thankfully, in a comment on the book's recent republication: "In 1966, when Benjamin Kaplan delivered the Carpentier lectures at Columbia University under the title 'An Unhurried View of Copyright,' there was time not to be in a hurry." We don't seem to have that luxury today, to take the time to teach or to learn ourselves in a quiet way, the way that people like Waldo Moore personified. May his memory serve as a blessing and as an inspiration for us to take that time, for ourselves and for others.