Sunday, March 30, 2008

Neil Netanel’s Copyright’s Paradox

On December 13th, 2007, I did a post on UCLA law professor Neil Netanel’s article discussing the causes for copyright’s expansion something like a major league baseball player (pick your favorite) juiced on steroids. I noted that the article was originally intended to be part of a forthcoming book “Copyright’s Paradox.” I am happy to report Copyright’s Paradox is now published (available here, at (for the discounted price of $25.16, a definite metziah), or here at Barnes & Noble for the same price for members; non-members pay $27.96.

The book enlarges upon a theme Professor Netanel wrote about earlier in “Locating Copyright Within the First Amendment Skein,” 54 Stan. L. Rev. 1, 13-20 (2001). Copyright’s Paradox is 268 pages with endnotes, and has nine chapters:

1. A “Largely Ignored Paradox”
2. From Mein Kampf to Google
3. What is Freedom of Speech? (And How Does it Bear on Copyright?)
4. Copyright’s Ungainly Expansion
5. Is Copyright “the Engine of Free Expression?”
6. Copyright’s Free Speech Burdens
7. The Propertarian Counter-Argument
8. Copyright and the First Amendment
9. Remaking Copyright in the First Amendment’s Image

I confess that even aside from being a Google employee, the title of the second chapter made me wince, although I appreciate that the juxtaposition was intended to be jarring, given the obvious incongruity, both thematically and chronologically. The discussion of Mein Kampf refers not Hitler as a speaker, but to Alan Cranston's unauthorized and highly critical translation designed to show the evils of Hitler's book. I had known of and written about the Houghton Mifflin verus Stackpole case, but I didn’t know that Senator Cranston had, as a youth worked for the International News Service in the 1930s. Cranston was fluent in German and, after reading “Mein Kampf” tried to sound an early alarm about Hitler’s plans. Cranston had read the “official” English translation, which as Professor Netanel notes, was a “heavily edited, bowdlerized version designed to make Hitler more palatable for British and American readers.” (Thanks Houghton Mifflin!) Cranston then made his own translation which was published just before Hitler invaded Poland to begin WWII, and which contained Cranston’s own commentary, which was highly critical). Cranston’s (also abridged) version was a 32 page newspaper pamphlet which sold for 10 cents. Houghton Mifflin sued and got an injunction. This amazing story is worth the price of Professor Netanel’s book by itself, but there are many others, including an invaluable discussion about what he calls “paracopyright,” illustrated by Adobe’s effort to prevent the copying of snippets, loaning, or even playing aloud of the eBook versions of public domain stories. (page 67). Legislators in other countries contemplating new copyright laws would benefit from reading this section.

One can see in chapter 4 the source of the concern for what was spun-off as Professor Netanel's expansion article. Reading both the article and the chapter gives one a full picture of his point that copyright has expanded dramatically over time, an expansion that disturbingly has occurred fairly recently, contrary to Michael Eisner’s crypto-history. The paradox of chapter 1 and therefore of the book’s title is taken from a 1970 article by Professor Melville Nimmer, “Does Copyright Abridge the First Amendment Guarantees of Free Speech and Press?, " published in 17 UCLA L. Rev. 1180. Professor Netanel writes that at the time of the Nimmer article, “those who values creative expression happily favored both strong copyright protection and rigorous enforcement of First Amendment rights without perceiving any potential tension between the two.” Copyright’s Paradox is a persuasive effort to address that lacuna, and it is long overdue. I say overdue because the Nimmer article, in my opinion, led, no doubt inadvertently, to a backlash in the courts.

Nimmer wrote for example,:

[A] grave danger to copyright may lie in the failure to distinguish between the statutory privilege known as fair use and an emerging constitutional limitation on copyright contained in the first amendment. The scope and extent of fair use falls within the discretion of the Congress. The limitations of the first amendment are imposed upon Congress itself. Fair use, when properly applied, is limited to copying by others which does not materially impair the marketability of the work which is copied. The first amendment privilege, when appropriate, may be invoked despite the fact that the marketability of the copied work is thereby impaired.
17 UCLA L. Rev. at 1200-1201

The distinction is, for my tastes and apparently that of the courts, too neat. Only two years after publication of Nimmer’s article, lower courts reacted negatively to the idea of the First Amendment as a form of uber-IP law, see e.g., Walt Disney Productions v. Air Pirates, 345 F. Supp. 108, 116 (N.D. Cal. 1972), aff'd in part, rev'd in part on other grounds, 581 F.2d 751 (9th Cir. 1978); Robert Stigwood Group Ltd. v. O'Reilly, 346 F. Supp. 376, 382 (D. Conn. 1972), rev'd, 530 F.2d 1096 (2d Cir. 1976) as did the Supreme Court in 1977 in Zacchini v. Scripps-Howard Broadcasting Co., 433 U.S. 562, 577 n.13 (1977). Eight years later, in 1985, in Harper & Row, Publishers, Inc. v. Nation Enterprises, Harper & Row, Publishers, Inc. v. Nation Enterprises, 471 U.S. 539 (1985) the Supreme Court put the kibosh on a separate First Amendment defense. In Eldred v. Ashcroft, 537 U.S. 186, 219–221 (2003). the Supreme Court once again rejected a First Amendment challenge. In Cohen v. Cowles Media Co., Cohen v. Cowles Media Co., 501 U.S. 663, 669 (1991), the Supreme Court held broadly: “The press, like others interested in publishing, may not publish copyrighted material without obeying the copyright laws.” Even Justice Brennan, a stalwart defender of the First Amendment, agreed. In New York Times Co. v. United States, 403 U.S. 713, 726 n. (1971) one year after Nimmer’s law review was published, wrote that there was no conflict between the two fields.

Of course saying there is no conflict requires one to sharply delineate the interests protected by and the reach of both fields, and it is here that Professor Netanel’s book excels where Nimmer’s article tended to confuse. Eschewing the formalistic approach to the paradox that has led to the decisions noted above, Professor Netanel (particularly in the final chapter) takes us through the way that copyright, properly limited and understood, may in conjunction with the First Amendment, again play a constructive role. He does this by focusing primarily on the values that underlie the first amendment, which he argues are not coterminous with first amendment doctrine. He argues that copyright should be informed by and tailored to further first amendment values, even beyond what the first amendment might require. His approach is at more respectful of copyright and the First Amendment than the earlier Nimmer article.

Copyright's Paradox is a major book by a major thinker, and a must read for all.

Friday, March 28, 2008

Super Superman opinion

On August 3, 2007, I did a post about an opinion by Judge Stephen Larson of the Central District of California. Called “Superboy crashes into building,” the post reviewed an opinion that covered part of a decades old effort by the creators of the Superman character Joseph Schuster and Jerome Siegel, and later by their heirs to recapture or assert rights. As I noted in that post:

The opinion, by Judge Larson, is a remarkable one in many respects, wholly aside from being 30 pages long. One remarkable factor is that the opinion came on a motion for reconsideration of an opinion by another judge, a motion that was granted and which resulted in important changes favorably to defendants. Another remarkable factor was the court’s willingness to take on very complicated questions of collateral estoppel raised in prior settlement agreements and court opinions, and to then interweave those issues with equally thorny questions of copyright law. The opinion is a tour de force and cannot be adequately captured in the small space of a blog, even one as verbose as this one frequently is.

Judge Larson has now topped that earlier effort, in a 71 and a half page opinion issued Wednesday. A copy of the opinion is available here. Let me give you the concluding paragraph first:

After seventy years, Jerome Siegel’s heirs regain what he granted so long ago – the copyright in the Superman material that was published in Action Comics Vol. 1. What remains is an apportionment of profits, guided in some measure by the rulings contained in this Order, and a trial on whether to include the profits generated by DC Comics’ corporate sibling’s exploitation of the Superman copyright.
(HT to Vincent Cox)

If it was impossible to capture Judge Larson’s earlier effort, this is even more true with his opinion Wednesday, so I won’t even try, but I will say it is a brilliant opinion that must have taken an extraordinary amount of time. It is very readable (and with great pictures!), which is very high praise given the extreme complexity of the facts and the legal issues at stake, If there was a Pulitzer Prize for judicial opinions, Judge Larson would win (with supporting awards for his hard-working clerks.).

The dramatic sounding nature of the final paragraph of the opinion has to be put in context though. The opinion doesn’t cover Shuster’s interests, which are not subject to Section 304(c) termination, but rather a future 304(d) termination. Nor does the opinion reach the work for hire question for anything after the (justly famous and important) Action Comics Vol. 1 published on April 18, 1938 – the collateral estoppel applied on work for hire only covers Action Comics Vol. 1. Finally, there are very thorny issues of apportionment. All of these issues are likely to be the subject of subsequent motions and possibly trial.

Instead of going into the intricacies of these issues and many others – like foreign profits, trademark rights and ownership of pre-termination derivative works, I will focus on something else, how the opinion comes at a propitious time for lovers of comic book history. The March 31st New Yorker has a wonderful review by Louis Menand of David Hajdu’s just published “Ten Cent Plague: The Great Comic Book Scare and How it Changed America.”Mr. Hajdu’s book (which I proudly own) is a cultural look at the threat comic books were believed to pose to polite society, in particular contributing to juvenile delinquency, a moral panic, aided by German psychiatrist Frederick Wertham. This era was covered once before in Amy Nyberg’s 1998 book, “Seal of Approval: The History of the Comics Code.

Regrettably perhaps out of political correctness, neither book nor the New Yorker review addresses an extremely important part of the Kulturkampf, presented by comics, caused in no small part by the dominance of comic book creators by lower class Jews. The Newark Jewish Museum had an exhibit in 2007 called “Masters of American Comics.” And there are some articles available on the web, here, and here. The subject is also covered in Paul Buhle’s 2004 book “From the Lower East Side to Hollywood: Jews in American Popular Culture.” Famous examples in comics from the early days include Will Eisner, whose background is described by wikipedia way:

Eisner was born in Brooklyn, New York, the son of Jewish immigrants — his father was a former painter, marginally successful entrepreneur, and one-time manufacturer in Manhattan's Seventh Avenue garment district.

Jerry Iger (whose great-nephew Robert Iger became CEO and President of The Walt Disney Company), Jacob Kurtzberg, known as Jack Kirby who was the co-creator of such enduring characters and popular culture icons as the Fantastic Four, the X-Men, the Hulk, Captain America, of whom wikipedia notes

Born to Jewish Austrian parents in New York City, he grew up on Suffolk Street in New York's Lower East Side, attending elementary school at P.S. 20. His father, Benjamin, a garment-factory worker, at P.S. 20. His father, Benjamin, a garment-factory worker, was a Conservative Jew, and Jacob attended Hebrew school. Jacob's one sibling, a brother five years younger, predeceased him. After a rough-and-tumble childhood with much fighting among the kind of kid gangs he would render more heroically in his future comics."

Robert Kahn, who changed his name to Bob Kane, known to aficionados as the creator of Batman, as well as Mad Magazine publisher Harvey Kurtzman.The Jewish influence on comics was hardly limited to the early days: contemporary and subversive Jewish comic book creators include Harvey Pekar (from Cleveland) and Art Spiegelman. Shuster and Siegel were typical of the early era, albeit not from the Lower East Side of Manhattan, but like Harvey Pekar, from Cleveland. As wikipedia notes, Jerry Siegel was

The son of Jewish immigrants from Lithuania, Siegel was the youngest of six children. His father Mitchell was a sign painter who opened a haberdashery and encouraged his son's artistic inclinations. Tragically, Mitchell Siegel was shot and killed in his store by a thief when Jerry Siegel was still in junior high school.

Of his partner in crime, Joseph Shuster, wikipedia notes:

Joseph Shuster was born in Toronto, Ontario, the son of Jewish immigrants. His father Julius, an immigrant from Rotterdam, South Holland, the Netherlands, and his mother Ida, who had come from Kiev in Ukraine, were barely able to make ends meet.

As a youngster, Shuster worked as a newspaper boy for the Toronto Daily Star and, as a hobby, he liked to sketch.Nor of course did either of them personally ever make any money to speak of off of their famous creations. But there have been a number of efforts over the years to come to an agreement, most noticeably in 2001 to 2002 settlement negotiations. Judge Larson’s previous opinion on Superboy (which effects claims on Smallville) and his opinion this Wednesday continue a process of clarifying and in some respects substantially whittling down bases for recovery. The case should though be settled; 70 years of strife is more than enough; with Passover coming next month, we should say dayenu, One opportunity was regrettably lost in 2001-2002; for the good of all, it would be constructive to avoid what looks like years of future torment for all.

Thursday, March 27, 2008

Attorneys’ Fees and Objectively Reasonable Claims

Can attorneys’ fees be awarded to a prevailing defendant under Section 505 of the Copyright Act if the court finds plaintiff’s unsuccessful claim was nevertheless objectively reasonable? The Sixth Circuit said yes this week in the latest Bridgeport Music saga, Bridgeport Music, Inc. v. WB Music Corp., ,2008 WL 762451 (6th Circuit March 25, 2008), Docket No. 06-5420.

To refresh people’s recollection, Bridgeport alleged nearly 500 counts against about 800 defendants for copyright infringement and other state-law claims arising from sampling the opening three-note chord from the immortal “Get Off Your Ass and Jam” (“Get Off”), written and recorded by George Clinton, Jr. and the Funkadelics in the 1970s. Bridgeport claims to own rights to the composition “Get Off” and alleged that the rap song “99 Problems” on the album “Home Invasion” infringed Get Off. Defendant Warner/Chappell Music denied that any samples were used on the “Home Invasion” album.

More than three years after filing suit against Warner/Chappell Music, Universal, and other defendants, the district court referred the case to a magistrate judge. Warner/Chappell Music moved for summary judgment on several grounds. As noted by the court of appeals:

The magistrate judge concluded that summary judgment should be granted. He determined that the infringement claims against the Warner defendants were barred both by a release as part of a settlement of prior litigation and by the applicable three-year statute of limitation. Although the Warner defendants had issued a license for the release of “99 Problems” in 1993, the only acts by the Warner defendants within the limitations period were the receipt of royalties on the sale of the album. Recognizing that there was no case law on the question, the magistrate judge concluded that the receipt of income from the sale of infringing products within the limitations period by a party who does not manufacture, distribute, or sell the infringing product (but who did provide a license) would not constitute direct or contributory infringement.

Universal had also moved for summary judgment, arguing that Bridgeport's claims were barred or limited by the statute of limitation. The district court adopted the magistrate judge's report and recommendation and granted summary judgment to the Warner defendants. The district court then granted summary judgment to Universal finding that Bridgeport failed to demonstrate direct, contributory, or vicarious infringement by Universal within the limitations period. As the court of appeals wrote:

Universal then moved for attorney’s fees. The district court found that Bridgeport had pursued an objectively reasonable legal theory that the receipt of royalties alone constituted an infringing act; however, the theory became unreasonable once the district court granted summary judgment on the identical issue to the Warner defendants. Because Bridgeport pursued its claim even though its legal theory had purportedly become objectively unreasonable, the district court awarded UPIP $79,340.94 in attorney fees and $3,409.35 in costs, which represented fees and costs incurred by UPIP after September 16, 2002.

On appeal, this court vacated the award. The court faulted the district court for its inconsistency regarding the reasonableness of Bridgeport's legal theory: “The district court explicitly found that Bridgeport's receipt of royalties theory was objectively reasonable. This objectively reasonable theory did not suddenly become objectively unreasonable (factually and legally) once it became apparent that the district court would most likely reject it and enter summary judgment in UPIP's favor.” Rhyme Syndicate, 376 F.3d at 628. The court concluded that it was an abuse of discretion to award fees and costs based on an erroneous determination that the theory had become unreasonable. Id. The court remanded the case for the district court to consider in its discretion whether an award or partial award was warranted based on a weighing of one or more relevant factors or because an award would otherwise further the purposes of the Copyright Act.

At this point, readers might believe that the district court would do something different on remand, even if only a teeny bit to show it got the court of appeals’ message. But the district court didn’t change a thing. Now, not having changed a thing, readers might think that the court of appeals would reverse: what, after all, might lead it to change its mind? Well, it didn’t change its mind, and it affirmed the very decision it had previously vacated. Here’s the court of appeals’ rationale, which I offer as a puzzler:

This case presents one of the rare instances in which a district court orders a party to pay attorneys' fees and costs in spite of finding that the party advanced an objectively reasonable legal claim or theory. … Thus, the question boils down to the following: despite the objective reasonableness of Bridgeport's royalty-receipt theory, are there other factors that are sufficiently weighty to justify the award against Bridgeport?

As the district court reiterated on remand, Bridgeport's theory had some support in law and in fact-it was objectively reasonable. The district court's negative evaluation of the theory in the case against the Warner defendants did not somehow dissolve the theory's legal and factual merits with regard to UPIP. That is, in essence, what the court held in Rhyme Syndicate.

Recognizing that the royalty-receipt theory was, is, and will remain objectively reasonable regardless of the ultimate outcome, however, does not mean that Bridgeport's continued reliance on the theory in this instance was necessarily nonsanctionable. Objective reasonableness is not an impenetrable shield against fees and costs.

There are dozens of twists and turns and nuances in the opinion I have omitted in an effort to over-simplify. I differ with the court in thinking the royalty-receipt theory of liability theory ever objectively reasonable; in my opinion it was wholly without merit and sanctionable. But at least the court of appeals managed to find a way to give defendants something for their tremendous trouble.

Wednesday, March 26, 2008

The Fur Flies (off) on Second Life

Website Seventh Sun (HT IPKat) has a revealing story – with pictures -- on a campaign by Second Life “content creators” against what is viewed as rampant piracy on the virtual network. The campaign is being fronted by avatar Chez Nabob , who runs a store called “CHEZ Fine Clothing for Men” on Second Life (see interview here). Mr. Nabob is reported to have had the idea that bringing awareness to the perceived problem by "parodying [PETA] would be an effective way to shed more light on the issue among the broader population of SL.” The campaign thus shows the avatars in the buff in the manner of the famous PETA ads.

Am I alone in finding it ironic that a campaign whose goal is to ensure people don’t copy works takes as its vehicle the copying of others’ works (even if in a non-infringing way)?

Friday, March 21, 2008

Israel Fights Back: A Purim Story

It is fitting that on today, the Jewish holiday of Purim I discuss the recent, heroic response of the Government of Israel to the bullying by the U.S. International Intellectual Property Alliance in its submission to the United States Trade Representative regarding the U.S. Special 301 Watch List. (See article in ars technica along with a link to the submission here).
More than one scholar and more than one government has wondered whether the Special 301 watch lists violate the TRIPs Agreement. Perhaps in the future the issue will be tested before a WTO panel and the issue will finally be decided. See here for a 1999 panel decision on Sections 305 and 306, and article by Professors Frederick Abbot and Jerome Reichman here). The result of the panel decision was a determination that article 23 of the WTO Dispute Settlement Understanding obliges WTO Members -- read the U.S. -- to seek redress for alleged violations of the WTO Agreement through multilateral, and not unilateral procedures. Because USTR stated it would apply Section 301 consistently with the WTO Agreement, the panel imposed
no sanctions. The argument still exists, though, that since the designated watch list countries are forced to spend large sums to defend themselves against designation each year, based solely charges made by the IIPA, there is a WTO violation.

But that issue aside, the sheer arrogance and affront to the sovereignty of foreign governments by the IIPA’s annual reports and effort to penalize those governments that do not toe the IIPA’s line is breathtaking. (See earlier post here). One needs to actually pore through the IIPA country reports to fully grasp what I mean: the nitpicking attacks on (translated versions) of foreign statutes which are held up to the light of U.S. law to decipher the slightest deviation – if only semantic – supports the view of the rest of the world that the IIPA is not only insensitive to the rest of the world, but has as its goal the remaking of the world in the U.S. image. This actually not quite right – it is a remaking of the world that contains only those parts of U.S. law that the corporate content owners who are members of the IIPA favor. For example, a little over a year ago I noted the amazing spectacle of the IIPA lobbying USTR to penalize Israel for adopting the U.S. fair use provision. (see here). It is one thing to try and get other countries to see things your way -- that's ordinary self-interest practiced by nations and individuals alike -- , and quite another to threaten those who don't do what you want with trade retaliation on the pretext that those countries are havens for piracy.

Israel is a very vulnerable nation for many reasons, some obvious, some not. One not so obvious reason is the threat that the U.S. will take retaliatory actions if Israel does not do X, Y, and Z. There is a misimpression in the popular press that the U.S. lets Israel do whatever it wants, but this is belied by reality. For example, in a prior Administration, an Administration official called into question general assistance to Israel if Israel didn’t go along with proposals for an international copyright treaty.

Of course, even large countries like Canada have been threatened: the U.S. is reported to have told Canada that the U.S. won’t do anything Canada wants in other areas unless Canada adheres to the WIPO treaties in the exact form that the U.S. has, and that such implementation is the highest priority in U.S.–Canada relations. That’s ridiculous bluster. I hope that the example of Israel, a much smaller and very vulnerable nation, standing up to the IIPA inspires the Canadians in drafting their anticipated copyright reform legislation. And one thing that might strengthen Canadian resolve is the experience of Israel with the migration of the watch list into an evolving wish list.

In 1999, USTR's primary focus with regard to Israel was with respect to lack of criminal enforcement and lenient criminal penalties. After Israel investigated the matter it became clear that better criminal enforcement (provided that the offenses would be narrowly defined and not as broad as desired by IIPA) made sense. Consequently, a lot of resources were directed to revision of the criminal sections of the copyright and trademark laws, as well as the establishment of special IP police units and training prosecutors. There were many successes and some lapses, but on the whole the system works well and has become institutionalized. By 2002 USTR even took note of Israel’s successes for which Israel was rewarded with occasional compliments and having its "rank" lowered to "watch list". However, no sooner was the "enforcement" problem solved than arose new problems. As soon as one problem was solved (enforcement), IIPA would raise new issues and very quickly it became apparent that the "watch list" is really a "wish list" from which there is no exit. Moreover, like with appeasement processes, the more concessions that are made the more concessions that are demanded. A review of Israeli’s February 2008 submission to USTR and a comparison with IIPA’s submission to USTR on Israel bears this out, and I invite readers to make their own comparison and judgments. Short of adopting U.S. law in toto there is no way for countries to ever escape continued criticism; appeasement is a road to nowhere.

One very significant issue raised in Israel’s latest submission that transcends Israel is this: Israel held fast against the prior Administration’s threats and did not join the WIPO treaties; those are the only treaties that obligate implementation of technological protection measures. Yet, IIPA has recommended that Israel be punished for not implementing TPMs. On what basis? Does it really violate Section 301 of the U.S. Trade Act if a country does not join the 1996 WIPO treaties? This question is highly relevant for countries like Canada that have become members but haven’t ratified the treaties or enacted implementing legislation: let’s say Canada doesn’t ratify the treaty, which would place it in the same position as Israel and the following very large list 12 years after conclusion of the treaties (go to this link on the WIPO site): Austria, Bolivia, Denmark, Estonia, the European Community, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Kenya, Luxembourg, Namibia, Netherlands, Nigeria, Norway, Portugal, Spain, Switzerland, United Kingdom, Uruguay, and Venezuela. Are all of these countries and the EC in violation of the U.S. Trade Act?

On what basis does the failure to ratify the WIPO treaties mean the failure to provide adequate and effective protection to U.S. works within the meaning of the Trade Act, and sufficient to justify the imposition of penalties under Section 301? Does adequate and effective protection really mean that all other countries have to ratify not only every treaty does, but also they must also implement those treaties the way the U.S. does? Is the U.S. joining a treaty, in others words, an invitation that other countries can’t refuse? (Let's recall here the U.S. refusal to join the Kyoto treaty). The U.S. Trade Act itself does not contain an obligation for other countries to adhere to the WIPO treaties on penalty of violating Section 301. Can it be said that the day before the U.S. joined those treaties, the U.S. did not provide adequate and effective to its own works and the works of other authors? If, as I believe is true, the Trade Act does not obligate other countries to adhere to the 1996 WIPO treaties, how can the failure to adhere violate Section 301 of that treaty?

As Israel asks in its latest submission, “can non-membership in a voluntary treaty be the basis for invocation of [Section 301] and placement on a watch list?” I am aware of no basis for that position, and if there is none, then those countries that are facing intense U.S. pressure to implement the DMCA should thank Israel for having the courage to stand-up for the rest of the world.

וַיְהִי, בִּימֵי אֲחַשְׁוֵרוֹשׁ: הוּא אֲחַשְׁוֵרוֹשׁ, הַמֹּלֵךְ מֵהֹדּוּ וְעַד-כּוּשׁ--שֶׁבַע וְעֶשְׂרִים וּמֵאָה, מְדִינָה.

Thursday, March 20, 2008

Photographs are not Derivative Works Part II

On February 5th, I did a posting about the question of whether photographs of objects are derivative works of those objects. I have long answered that question negatively, but the post was prompted by an Iliinois case that came out the other way, Schrock v. Learning Curve Intern., Inc., 2008 WL 224280 (N.D.Ill., January 29, 2008).

I am happy to report (not gloating, really) that on March 13th, Judge James Moody of the Middle District of Florida came out my way, in Latimer v. Roaring Toyz, Inc., 2008 WL 697346, Docket No. No. 8:06-CV-1921-T-30EAJ. Judge Moody specifically considered and rejected Schrock, (but ruled on summary judgment on implied license for some defendants). You go judge!

Here are the facts, from the court’s opinion, editing out extraneous stuff:

Todd Latimer, a free-lance fashion photographer, prepared a series of photographs of custom motorcycle parts for an advertising brochure for Defendant Roaring Toyz In June, 2005… Roaring Toyz displayed a number of customized motorcycles at the West Palm Beach Motorcycle Show. During the show, Latimer took numerous photographs of motorcycles customized by Roaring Toyz . Between June, 2005, and March, 2006, Latimer photographed a number of motorcycles Roaring Toyz was customizing at its Sarasota, Florida facility. Latimer provided Roaring Toyz copies of some of the photographs taken during this time period for its use on its website. Defendant Kawasaki Motor Corporation USA, Inc., manufactures, inter alia, motorcycles, utility vehicles, all terrain vehicles, and watercraft. Kawasaki began promoting its ZX-14 motorcycle in September 2005. While preparing for the introduction of the ZX-14 motorcycles, Kawasaki personnel noted a trend developing in the marketplace for customized motorcycles. Since Kawasaki did not manufacture or sell customized motorcycles, it arranged for two ZX-14s to be delivered to Roaring Toyz in January, 2006, for customization. Decisions regarding how the customization should be done, as well as what the final product should look like, were left to Roaring Toyz ... . Roaring Toyz commissioned Ryan Hathaway, an independent contractor who operated a one-man shop engaged in custom paint work and graphics design, to customize the paint on the ZX-14s. While Hathaway and Fisher discussed graphics styles and color schemes, Hathaway made the final decisions as to the design and color of the artwork on the ZX-14s During January and February, 2006, Hathaway worked in his shop in Lake Placid, Florida, designing the artwork, selecting the paint colors, and painting the ZX-14s. Meanwhile, in January, 2006, Latimer was retained by 2Wheel Tuner “to follow the build” of the ZX-14s and provide 2Wheel Tuner with photographs of the motorcycles at various stages of the customization process for inclusion with a magazine article. On February 23, 2006, Fisher learned … that Kawasaki wanted photographs of the customized ZX-14s. Roaring Toyz had one day in which to provide the requested photographs. Fisher contacted Latimer regarding Kawasaki's request for photographs, explaining the tight deadline when they spoke. Latimer agreed to travel to Sarasota to conduct a photo shoot that evening. Latimer worked throughout the night of February 23-24 taking photographs of the ZX-14s as requested by Kawasaki. Once the photo session concluded, Latimer asked Fisher for $800.00 as payment for photographs of three R-1 and three Hayabasa motorcycles taken on February 14 and 16, 2006. Fisher wrote Latimer an $800.00 check.

In short, a photographer took pictures of a motorcycle on which there was art work and then sued for infringement of them. Among the various defenses asserted by defendant was one that plaintiff’s photograph was an unauthorized derivative work of the artwork on the motorcycle and as such not protectible.

Here is the court’s rejection of this approach:

Under 17 U.S.C. § 101, a derivative work must incorporate a substantial element of a preexisting work of authorship and recast, transform, or adapt those elements. See SHL Imaging, Inc. v. Artisan Homes, Inc., 117 F.Supp.2d 301, 305-306 (S.D.N.Y.2000) (noting that “any derivative work must recast, transform or adopt the authorship contained in the preexisting work,” the Court found that “the authorship of the photographic work is entirely different and separate from the authorship of the sculpture” depicted in the photograph). As explained in SHL Imaging, “a photograph of ... [a] ‘Puppy’ sculpture in Manhattan's Rockefeller Center[ ] merely depicts that sculpture; it does not recast, transform, or adopt ... [the] sculptural authorship.... [A]uthorship of the photographic work is entirely different and separate from the authorship of the sculpture.” Id. at 306. It is undisputed that the artwork on the motorcycles is the original, creative expression of Ryan Hathaway, and as such, entitled to copyright protection. Defendants contend that since Hathaway did not grant a license to Latimer to make a derivative work by photographing Hathaway's artwork, the photographs at issue are unauthorized derivative works. The Copyright Act states that “[a] work consisting of editorial revisions, annotations, elaborations, or other modifications [to a preexisting work that], as a whole, represent an original work of authorship, is a ‘derivative work.’ “ 17 U.S.C. § 101. If, however, it is non-infringing and sufficiently original, such a work qualifies for a separate copyright. The Court rejects Defendants' argument that Latimer can have no copyrightable interest in his photographs. Here, Latimer has not altered Hathaway's artwork, recast it, or otherwise transformed it during the photographic process. The ZX-14s are the subject of the photographs. Hathaway's artwork has not been transformed in the slightest-it is presented in a different medium, but it has not been changed in the process such that it meets the criteria for a derivative work under copyright law. While Latimer has copyrighted photographs of the ZX-14s, he does not seek to monopolize the subject matter or idea of the photographs but merely to protect the actual reproduction of his expression of the idea, to wit, the photographs themselves. As in SHL Imaging, Latimer has not “recast, transform[ed], or adopt[ed]” Hathaway's artwork. Defendants' argument that Latimer's photographs are derivative works lacks merit.

Praise the Lord. Apropos a comment on the original posting, there was a claim of joint authorship, which the court rejected.

Tuesday, March 18, 2008

The Ninth Circuit Corrects Course

Last August, I did a post on the Ninth Circuit's opinion in Jada Toys, Inc. v. Mattel, Inc., involving both copyright and trademarks claims. I quoted this passage:

We hold, however, that a reasonable trier of fact could conclude that the marks are objectively similar. It could also be argued that, given the similarity of the marks, a reasonable observer of the two marks could understand the HOT RIGZ mark to be expressing the sense that the product sold under that mark is, essentially, a HOT WHEELS product. Therefore, the district court's entry of summary judgment in favor of Jada as to Mattel's copyright claim is reversed.

I then noted:

The part that is objectionable is this, “a reasonable observer of the two marks could understand the HOT RIGZ mark to be expressing the sense that the product sold under that mark is, essentially, a HOT WHEELS product.” That’s a trademark analysis, not a copyright analysis. One can only hope that such confusion of two very different rights and infringement of them is limited to the facts of this particular case.

HT to the wild and crazy Marty Schwimmer, on February 21st, the court, per District Judge Brian Sandoval, released an amended opinion, that substitutes this paragraph:

We hold, however, that the district court did not conduct an objective test as to both ideas and expression as required under the extrinsic test outlined in Apple Computer. In addition, as to the intrinsic test, Mattel has raised a material issue of fact. A trier of fact could conclude that the logos are similar "from the standpoint of the ordinary reasonable observer." Therefore, the district court's entry of summary judgment in favor of Jada as to Mattel's claim is reversed.

Bravo Judge Sandoval for correcting things.

Bears, Gorillas, Basketballs, Bicycles, and Copyright

What do Bears, Gorillas, Basketballs, Bicycles, and Copyright have to do with each other? The answer, a recent dispute over a UK ad ageny’s apparent copying (at least ideas) on awareness from University of Illinois professor Daniel Simons. Here is the original video. Here is the UK ad agency’ video.

The UK video was produced for Transport for London, to raise awareness of cyclists. The obvious similarities in the two videos has prompted much press. Here is one link on the bikebiz blog. Here is a link to a discussion within the ad agency community (scroll down to the March 11th and 12th entries).

The ad agency that made the TFL ad is quoted as saying it didn’t think it violated Professor Simon’s copyright, and Professor Simons, who handled the matter with great distinction, noted that there were some differences, although the differences are very slight.

Friday, March 14, 2008

The Unpleasantries of Service of Process

How do you obtain personal jurisdiction over a defendant in a copyright case? Personal jurisdiction is, in federal question cases such as copyright, intertwined with service of process. A suit for copyright infringement is instituted by the filing of a complaint with the clerk of the district court and serving a copy of the complaint along with a summons on the defendant. Facially, FRCP 4 does not directly deal with personal jurisdiction, only service of process, and with the exception of FRCP 4(k)(2), valid service of process does not necessarily ensure that the court may exercise in personam jurisdiction over a defendant.

While FRCP 4(k)(1)(D) states that service of a summons is effective to establish personal jurisdiction when authorized by a federal statute, the Copyright Act (like many federal statutes) does not specify the manner of service of process. This lack of specification has been construed as precluding nationwide service of process. As a result, FRCP 4(e)(1) requires that service must be effected in any federal district “pursuant to the law of the state in which the district is located, or in which service is effected, for the service of a summons upon the defendant in an action brought in the courts of general jurisdiction of the State.” It is thus the provisions of state law that govern.

In the case of corporations, FRCP 4(h) takes the same approach, permitting service of process in the manner prescribed for individuals, or, by delivering a copy of the complaint and summons to an officer, managing or general agent, an agent authorized by law to accept service including if the statute says so by mail. FRCP 4(m) adds that if you don’t effectuate service of process in the right way within 120 days after the complaint was filed with the clerk of the court, your complaint can be dismissed (without prejudice). The without prejudice part is not so lenient as it may seem because some plaintiffs wait right before the expiration of the statute of limitations to file, and thus if the complaint is later dismissed for failure to effectuate a valid service of process, a dismissal without prejudice will, as a practical mater, be a dismissal with prejudice. The lesson obviously is file with enough time to refile within the limitations period.

In Prunte v. Universal Music Group et al, 2008 WL 647546 (D.D.C March 11, 2008), a pro se plaintiff learned the hard way that serving corporate agents requires diligence. Plaintiff had attempted to serve Viacom International, Inc. by delivering the complaint and summons to a “Process Specialist” at Spiegel & Ulterra, thinking that Spiegel was the registered agent for Viacom International, Inc. It wasn’t. Spiegel is the registered agent for Viacom Communictions Group, which the court found is not affiliated with Viacom International, Inc. Viacom International, Inc. does have a registered agent for service of process, the Corporation Service company, but that company was not served. The error apparently came when plaintiff looked at the online directory for New York State but failed to see a separate entry for the Viacom Communications Group.

Since plaintiff turns out to be an “experienced federal court litigator,” having filed many pro se complaints, the court cut him no slack.

Wednesday, March 12, 2008

Michael Eisner and the History of Copyright

There have been a number of reports on Michael Eisner's statement during an interview at the SXSW on Tuesday that:

I have a long history, obviously, of believing in copyright. I think basically what separated this country from the rest of the world was patents and copyrights. President Lincoln introduced a lot of this, fought for (the idea that) to pay people for their intellectual work was no different than paying them for their physical work. And nobody would think twice about paying someone for their physical work.

including this one at Techdirt which traces Eisner's apparent obsession with Lincoln and copyright, an obsession that is historically inaccurate. During Lincoln's Presidency, only one copyright act was passed, extending copyright to photographs. Lincoln signed the legislation into law on March 3, 1865, six weeks before he was assassinated on April 15th. Lincoln had no role in the legislation, moreover, which originated in the Senate Committee on Patents and the Patent Office. The bill was introduced on February 22, 1865 and passed by the Senate the same day. The House passed it on March 2d, and Lincoln signed it March 3d, 16 Stat. 198.

What did the U.S. Copyright Act look like during Lincoln's presidency? The term of protection was a maximum of 42 years: an original term of 28 years, and a renewal term of 14 years. Copyright was not automatic; to obtain a copyright, you had to register the claim with the clerk of the district court where you resided, and you had to file a renewal claim with the clerk in the 28th year of the original term, and you had to publish your renewal claim in a newspaper. There was a mandatory copyright notice that was expressly a precondition to protection. Deposit copies of the work had to be delivered to the clerk of the district court within three months after publication. Deposit copies also had to be provided to the Smithsonian and the Library of Congress.

The types of works protected were very small: book, maps, and charts; "historical and other" prints; and musical compositions. The following works were not covered: paintings, drawings, lithographs, statues, models, designs of useful articles, and many other everyday literary and visual works. Motion pictures and sound recordings were not in existence. The only performance rights were for dramatic literary compositions; non-dramatic literary and musical compositions had no performance right. There was no translation right, and no right to prevent the making of derivative works.

The only statutory damages were for infringement of the dramatic right; all other types of works were limited to actual damages or the infringer's profits. There was no protection for foreign works: Charles Dickens had visited the United States in 1842 and complained loudly about the piracy of his works. He came again in 1868, three years after Lincoln's death, and again without success since protection was not extended to foreign works until 1891, and even then only upon foreign works being reprinted and republished in the U.S.; how's that for protectionism and throwing mud in the face of copyright as a natural right? The U.S. was during Lincoln's time called "the Barbary Coast of literature" and its citizens "buccaneers of books." We did not adhere to a global multilateral convention until 1955 (the UCC), and Berne until 1989, even though many others had a full century earlier.

Put in the correct historical context then, U.S. copyright law was very different than it is now and had a very very different approach than we do now: a short term, chock full of formalities, with few works protected, and even fewer rights; general tort remedies and no statutory damages other than for dramatic compositions, and of course, we were ripping off foreign authors with glee. Is this what Mr. Eisner had in mind?

The Anschluss and Expropriation of Jewish Copyrights in Europe

Today is the 70th anniversary of the Anschluss. Wikipedia (hardly the only source to consult for this epochal event) states:

[T]he 1938 Anschluss, regardless of its popularity, was enacted by Germany. Earlier, Nazi Germany had provided support for the Austrian National Socialist Party (Austrian Nazi Party) in its bid to seize power from Austria's Austrofascist leadership. Fully devoted to remaining independent but amidst growing pressures, the chancellor of Austria, Kurt Schuschnigg, tried to hold a plebiscite.

Although he expected Austria to vote in favour of maintaining autonomy, a well-planned internal overthrow by the Austrian Nazi Party of Austria's state institutions in Vienna took place on March 11, prior to the vote. With power quickly transferred over to Germany, the Wehrmacht troops entered Austria to enforce the Anschluss. The Nazis held a plebiscite within the following month, where they received 99.73% of the vote. No fighting ever took place and the strongest voices against the annexation, particularly Fascist Italy, France and the United Kingdom (the "Stresa Front"), were powerless or, in the case of Italy, appeased. The Allies were, on paper, committed to upholding the terms of the Treaty of Versailles, which specifically prohibited the union of Austria and Germany.

Austria ceased to exist as a fully independent nation until late 1945. A Provisional Austrian Government was set up on April 27, 1945, was legally recognized by the Allies in the following months but it was not until 1955 that Austria regained full sovereignty.

In addition to the eventual slaughter of 6 million Jews in the Shoah, came the seizure of their property. The seizure by the Nazis of artwork owned by European Jews has been the subject of books, articles, and court cases. Ray Dowd, a partner in Dunnington Bartholow & Miller LLP in Manhattan has undertaken a heroic effort to recover some of these works for the heirs of the original owners. But what about the seizure of Jewish copyrights? In 1946 to 1947, the Austrian government passed three restitution acts. The first, in July 1946, covered only property expropriated by a governmental authority and which was then in the hands of a governmental authority. The second, from February 1947, covered property, “which had fallen to the Republic as a result of the Nazi-prohibition or was-crime laws.” The third act, passed the same day as the second, was broader, and created a basis for restitution that occurred by acts of expropriation by individuals. Expropriation of copyright (and patents) was expressly mentioned in the third act.

In Appendix 1 to a Press Release by the Austrian Historical Commission, issued on February 24, 2003, page 18, coverage of copyrights by the third restitution act was recounted, but the commission noted that no steps had ever been taken to provide restitution. My information from those who looked into the matter last week is that no steps have been taken since 2003. It may be that few copyrights were expropriated – after all Jewish art (and those of others deemed morally deviant) was condemned by the Nazis as “entartete Kunst” (Degenerate Art).

Yet, this did not prevent the Nazis from seizing the physical works of art for their own collections, or selling them for money. Still, it is hard to see of what value seizing Jewish copyrights would be: the Nazis would hardly be bringing infringement suits or licensing them for exploitation in other countries. Nevertheless, it is an area that I have wondered about but not read anything about, and I am curious whether European scholars have looked into the question, in any of the Axis powers.

The U.S. government has a long history of expropriating copyrights and patents from citizens of countries we go to war with. On October 6, 1917, President Woodrow Wilson approved the Trading with the Enemy Act, permitting the government to seize title to the intellectual property of enemy authors. An Office of the Alien Property Custodian, in the Justice Department, was set up for this purpose and issued numerous vesting orders pursuant to which enemy copyrights were seized. Under these orders, the government was authorized to, and did, issue licenses to U.S. citizens to use and publish copyrighted works of enemy authors seized under the Act. The general purpose of the orders was not, however, entirely confiscatory. Vesting orders were also used to encourage the reproduction of scientific works helpful to the war effort under circumstances where normal licensing conditions were not possible.

Although the Office of the Alien Property Custodian was abolished in 1934, the Office was reestablished under the First War Powers Act following the declaration of war on Japan, Germany, Italy, Romania, Bulgaria, and Hungary in 1941.

The Alien Property Custodian was quite active during World War II, and the numerous vesting orders recorded in the Copyright Office caused the Office considerable work. By fiscal year 1944, 185,102 titles had been recorded, with 146,690 waiting to be indexed. Royalties of $5 million were collected and deposited with the U.S. Treasury from the exploitation of musical works such as Puccini operas, books such as Mein Kampf and Goebbels's diaries, and films such as The Blue Angel. Approximately 700 scientific books and 3,200 issues of foreign scientific periodicals were licensed under the orders.
See generally Martin Domke, Trading with the Enemy in World War II 273–295 (1943); Martin Domke, The Control of Alien Property 189–190, 308 (1947).

After the conclusion of World War II, the War Claims Act of 1948 was passed. This Act provided, inter alia, for the satisfaction of U.S. war claims from funds obtained from the sale or licensing of seized intellectual property. At the same time, title to copyright was returned to the rightful foreign author or his or her heirs in a number of cases.
In 1962, legislation was enacted providing that where copyrights had not already been returned to enemy authors by the Alien Property Custodian or the Attorney General, all copyrights seized were “as a matter of grace” returned to the authors or their heirs. All unpaid royalties were, however, to be paid to the Attorney General.

In the 1994 GATT implementing legislation, an exception from restoration pursuant to Section 104A(a)(2) is provided for “Any work in which the copyright was ever owned or administered by the Alien Property Custodian and in which the restored work would be owned by a government or instrumentality thereof … . ” The purpose of this exception is to ensure that the German and Japanese governments do not receive protection for their wartime works. The exception does not apply to works created by individuals.

Monday, March 10, 2008

Israeli Flashmobs and Pictures of Works of Architecture

Tel Aviv is a vibrant, secular Israeli, which, like New York City, never sleeps. Recently, some residents of Tel Aviv have become agitated about copyright law, in particular an attempt to stop photographers from taking pictures, from the street, of the Opera Tower. An amateur photographer, Ziv Mizrahi, was taking pictures of the building a week or so ago, when a guard ordered him to stop. The company that managed the building told him he needed written permission to take pictures since the building is subject to copyright.

The response was a “flashmob,” in which photographers gathered in front of the building and took pictures beginning on March 7th, apparently without incident. The story is told here. Pictures of the flashmob were then posted to Flickr, available here.

Orcas and Statutory Damages

Jonathan Smith is the owner of an unusual copyright: During a performance at Sea World on March 4, 1987, two orcas attacked Smith, a trainer. An audience member, Mr. Chiang-Shek, recorded the performance (and thus the Attack) using a camcorder. The video is approximately five minutes long. Mr. Chiang-Shek visited Smith in the hospital, gave him a copy of the Video and assigned the copyright to him. Such a nice guy! (See Smith v. NBC Universal, 524 F.Supp.2d 315 (S.D.N.Y.,2007)).

Smith filed suit against NBC Universal, MG Perin Inc., Universal Television Networks and twenty unknown persons for copyright infringement and for various violations of state law. .
On February 28, 2008, Judge Scheindlin issued an opinion on the measure of statutory damages, a topic of great interest lately, given the so-called Pro-IP’s efforts to change the way such damages may be awarded. Judge Scehindlin’s opinion comes to the correct result, in my view, and maybe for the right reasons, but it also contains a discussion of the issue, from Nimmer, that I find baffling.

Smith argued that one of the defendant’s (MG Perin) should be liable for a separate award because it authorized another (Universal Television Networks, UTN) to broadcast the clip. Here is how the court initially framed the liability:

Smith is entitled to two statutory damage awards only if (1) MG Perm independently infringed Smith's copyright (as opposed to simply contributing to UTN's infringement) and (2) the statute authorizes two awards for two infringements of the copyright on one work. Regardless of the number of infringements of Smith's copyright, because there is only one work at issue and the defendants are jointly and severally liable for any infringement, Smith is entitled to only one award of statutory damages.

MG Perin and UTN are jointly and severally liable for the infringement of his video, and he is thus entitled to one award.

So far so good: there was joint and several liability, hence one award. Had the court stopped there, I would have no posting today. But for better or worse, the court went on in dicta (no, no, don’t!), and that’s where the trouble lies:

An example from Nimmer on Copyright cited by Smith supports defendants' position: A complaint alleges that theaters A, B, and C all broadcast the plaintiff's movie without permission. If they have no relationship with each other, damages would not be joint and several. However, if D distributed the movie to all three, D would be jointly and severally liable with each of them. “There will, therefore, be three sets of statutory damages which may be awarded, as to each of which D will be jointly liable for at least the minimum of $250. However, D's participation will not create a fourth set of statutory damages.” …

Nimmer suggests that a plaintiff in this situation could file multiple actions to recover multiple statutory damages awards (assuming that the distributor's actions constituted an independent violation of the copyright). He concludes that because of this danger, there might be an argument that for purposes of judicial economy, a plaintiff should be allowed multiple awards in situations where res judicata would not bar the subsequent action. However, he notes that factors to consider would include whether the facts of the separate claims are “ ‘related in time, space, origin, or motivation, whether they form a convenient trial unit, and whether their treatment as a unit conforms to the parties' expectations or business understanding or usage.’ “ He further notes that recovery would be barred “[i]f the infringing acts complained of in the second action constitute a part of the same infringing transaction that was the subject of a first action ....“ Even if this were the law in this circuit, Smith's claim fails this test. His claims against MG Perin and UTN are related in time, space, origin, and motivation, are convenient to try together, and business understanding suggests that they are a single claim.

I don’t get the A,B,C,D, example: I would have thought that all parties being jointly and severally liable there is only one award. Nimmer appears to take the position that A is jointly and severally liable with D, but not with B or C; that B is jointly and severally liable with D, but not with A or C; and that C is jointly and severally liable with D but not with A or B. That doesn't make sense to me under the facts of Smith, and Judge Scheindlin agrees I think, disagreeing with Nimmer, I think. Here’s what the House report says:

Where the infringements of one work were committed by a single infringer acting individually, a single award of statutory damages would be made. Similarly, where the work was infringed by two or more joint tortfeasors, the bill would make them jointly and severally liable for an amount in the $ 250 to $ 10,000 range. However, where separate infringements for which two or more defendants are not jointly liable are joined in the same action, separate awards of statutory damages would be appropriate.

I see no support in the statute or the legislative history for Nimmer’s view that there are two categories of joint and several liability, or for his judicial economy argument, or for his “time, space, or motivatation” argument. The only issue is whether there is joint and several liability among the defendants: if so, that’s it, one award and that result has nothing to do with whether the same or different rights are violated. This principle is expressed in the 1976 committee reports: "[W]here separate infringements for which two or more defendants are not jointly liable are joined in the same action, separate awards of statutory damages would be
appropriate," the key being the italicized "separate."

Section 504(c) does not define joint and several liability, relying instead on common law principles, and those principles are not limited by whether each defendant engaged in the exact same act, but rather whether defendants acted in concert. Put more colloquially, while there is joint liability for things jointly done, there is several liability for things done separately, regardless of whether there is one suit or two, and regardless of the number of rights violated. So, if D is the cause of infringing acts done by A,B, and C there is joint and several liability among A-D, as Judge Scheindlin found. What matters is whether the defendants acted in concert, not whether separate rights have been violated by each defendant. Whether defendants acted in concert is determined by the facts and general tort principles, not by fancy sounding tests.

Friday, March 07, 2008

Ricky Gervais Inspires Copyright Opinion

I am a huge fan of English comedian Ricky Gervais, the star and c-creator of The Office and Extras. Of these two, I prefer Extras: the episode with Kate Winslet, playing a nun in a Holocaust movie, who off the set gives one of the extras advice about phone sex, is delicious. But The Office is better known in the U.S. because of the American version starring Steve Carrell. There are many fans of The Office, including, it appears U.S. District Judge William Young of Massachusetts. This factoid is derived from a February 28th opinion of his, Situation Management systems v. ASP Consulting Group, F.Supp.2d ----, 2008 WL 538808 (D.Mass.)(available here), Civil Action No. 06-11557-WGY.

The opinion is a masterpiece of analysis and witty writing. Judge Young takes on some of the most thorny issues in copyright in a clear headed way that is both educational and a delight to read. The opinion is not a landmark opinion, but instead an excellent execution of an everyday task, the importance of which is frequently overlooked. To continue the architecture theme, we focus too much on the big, bold, signature buildings, the ones that shape the skyline and that come to define the image of a city. But as the great architectural critic Ada Louise Huxtable,
once pointed out, it is the mass of the other buildings that actually make up the fabric of a city: the buildings that we live or shop in, the buildings that fill up the blocks. If these buildings are done well, the city has a character and strength that will support the rest, whereas isolated structures of genius will be isolated if the supporting cast is poor.

In the case of law, we focus on Supreme Court opinions and occasionally circuit opinions. The Supreme Court has however come to abdicate its role as a leader by acting as 9 separate law firms responsible only to the individual Justices rather than acting in the interests of the Court as an institution or the county as a whole. Circuit court opinions may well be important, but it is in the district court that the day to work is done and where justice is usually meted out or not. How well the district courts do their job is important indeed, and it is for this reason that Judge Young’s opinion, even though in an “unimportant” case is important: he demonstrated a level of excellence that informs and educates all of us.

The dispute arose when one group of employees left the company with a management change, and the new management took to the courts to beat the competitors. The works at issue were business training programs. Here is one section from the opinion:

MS alleges that ASP has infringed materials associated with three programs, Positive Power & Influence, Promoting and Implementing Innovation, and Positive Negotiation. Although they are undoubtedly entitled to more protection than the white pages in Feist, they are dominated by unprotectable material. These works exemplify the sorts of training programs that serve as fodder for sardonic workplace humor that has given rise to the popular television show The Office and the movie Office Space. They are aggressively vapid-hundreds of pages filled with generalizations, platitudes, and observations of the obvious. While the workbooks' vague character may serve SMS well in the marketplace where it meets the demands of clients in different industries, they lack the “incident” that Judge Hand described as essential for differentiating the works from the underlying ideas. To the extent that the works contain expression, they are largely noncopyrightable because they are devoted to describing a process or because they are not original.

SMS's works do contain copyrightable expressions, but its right to exclude others is limited to little more than its original text and formatting. At their creative zenith, these works translate common-sense communication skills into platitudinal business speak. One engaged in the industry might refer to the practice as jargonization. When an noncopyrightable idea is cloaked in a neologism such as “innovision,” copyright law permits protection over the cloak, but not the concept or the process it describes. See 17 U.S.C. 102(b). Harwood, Moore, and anyone else is free to create programs addressing the same topics and processes, so long as their final product is sufficiently distinct.

The court’s discussion of substantial similarity is also excellent. Here is an excerpt:

ASP's motivations are not relevant because SMS has failed to prove substantial similarity. Finally, the motivations of former SMS employees are irrelevant because the works are not substantially similar. In a post-hearing brief, SMS emphasizes that “there was profound bitterness when the Malouf family took over SMS as a result of litigation and ASP's Moore and Harwood were both fired. Moore threatened to get even with Ms. Malouf by stealing SMS materials and take [sic.] their clients.” Pl.'s Post Arg. Br. at 4 (footnote omitted). SMS misses the point; bitterness, however profound, is not the touchstone of copyright infringement. “[A] defendant may legitimately avoid infringement by intentionally making sufficient changes in a work which would otherwise be regarded as substantially similar to that of the plaintiff's.”

For example, presuming Shakespeare's poetry was subject to copyright, an aspiring poet might purchase a collection of his sonnets and select one to serve as the inspiration for her own poem. She might select Sonnet 18 and attempt to emulate the poem's depiction of unwavering beauty by borrowing his iambic pentameter and even a word or short phrase, fully intending to write a poem that will usurp the Bard's virtual monopoly on romantic sonnets and win fame and fortune for herself in the process. The aspiring poet's motives are of no moment so long as the final product is not substantially similar to the original.

In this case, the Court has already found that, like the aspiring poet, Harwood and Moore used SMS's works to create ASP's. Even if they smuggled copies of SMS's programs and poured over them, redlining and rewriting, such “intentional dissimilarity” is permissible.

What I particularly like is Judge Young’s refusal to be swayed by the all-too-common white hat versus black hat arguments founding litigation. The opinion is a gem and should be read in its entirety.

Thursday, March 06, 2008

Mark up in House of Pro-IP Bill

Today, the House of Representatives' IP subcommittee is set to mark-up H.R. 4279, the Pro-IP bill. My views on the bill have been previously expressed. I am very happy to report that Section 104, which would have amended Section 504(c)(1) to alter the way in which awards of statutory damages may be awarded for compilations and derivative works, is to be deleted in the manager's amendment.

Mother Jones' admonition "Don't Mourn Organize," certainly fit in this case. There are many who should be thanked for speaking up on the proposal, but we should also thank Chairmen Conyers and Berman, the committee and personal staff, and the Copyright Office for listening. Committee staff and the Copyright Office devoted a great deal of attention to the issue and the round table that was held was very well run and very balanced; it was government at its best.

Deletion of the provision may lead to a broader discussion of statutory damages which would also be helpful.

Wednesday, March 05, 2008

The Requirement of Irreparable Harm for Preliminary Relief

The early English chancery courts, operating under the 1710 Statute of Anne, but without express authorization in that Act, regularly issued temporary injunctions against the distribution of books and plays alleged to be infringing, including on ex parte application. The chancery courts exercised their equitable powers purportedly with a view to effectuating the legal right granted by the Statute of Anne, and only under circumstances where at-law remedies could not provide adequate relief. The need for intervention by the chancery courts was stated in the United States by Justice Story: “[I]f no other remedy could be given in cases of patents and copyrights than an action at law for damages, the inventor or author might be ruined by the necessity of perpetual litigation, without ever being able to have a final establishment of his rights.” Joseph Story, 2 Commentaries on Equity Jurisprudence as Administered in England and the United States 931 (1836).

Justice Story's remarks were based upon earlier pronouncements made by English chancery courts, such as this one in Hogg v. Kirby, 8 Ves. 215, 225 (1803)

The principle of granting the injunction … is that damages, do not give adequate relief; and that the sale of copies by the defendant is, in each instance, not only taking away the profit of the individual book, which the plaintiff probably would have sold, but may injure him to an incalculable extent which no inquiry for the purpose of damages can ascertain.

And this one by Lord Eldon in Lawrence v. Smith, Jacob's Rep. 472 (1822) “Our jurisdiction, unless I mistake, is founded on this: that the law does not give a complete remedy to those whose literary property is invaded.” These sentiments are, however, entirely abstract, for in Lawrence, plaintiff did not present any evidence of an inadequate remedy at law.

Yet, in the U.S., the Supreme Court has repeatedly held that "The sine qua non of any grant of temporary injunctive relief is proof of immediate irreparable harm." Weinberger v. Romero-Barcelo, 456 U.S. 305, 312, 102 S. Ct. 1798, 72 L. Ed. 2d 91 (1982) (“The basis for injunctive relief in the federal courts has always been irreparable injury and the inadequacy of legal remedies”); Sampson v. Murray, 415 U.S. 61, 88, 94 S. Ct. 937, 39 L. Ed. 2d 166 (1974) (“This Court has stated that ‘(t)he basis of injunctive relief in the federal courts has always been irreparable harm and inadequacy of legal remedies,’ Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 506–507, 79 S. Ct. 948, 3 L. Ed. 2d 988 (1959).” As Judge Posner put the matter in a copyright case, Ty, Inc. v. GMA Accessories, Inc., Ty, Inc. v. GMA Accessories, Inc., 132 F.3d 1167 (7th Cir. 1997).

[A] plaintiff who cannot show any irreparable harm at all from the withholding of a preliminary injunction is not entitled to the injunction however strong his case on the merits, for he has no need for preliminary relief in such a case, no need therefore to short-circuit the ordinary processes of the law.

Although historically the requirement may have originated in the 17th century as a way to make clear the jurisdictional authority of the law and chancery courts, by the 19th century the focus had shifted toward the current role of serving as the way to distinguish between appropriate interim relief and relief available at a final hearing. See John Leubsdorf, The Standard for Preliminary Injunctions, 91 Harv. L. Rev. 525, 533–534 (1978). How that burden is met is less clear. Judge Friendly once wryly observed that the phrase irreparable harm “generally produces more dust than light.” Studebaker Corp. v. Gittlin, 360 F.2d 692, 698 (2d Cir. 1966). In the Ninth Circuit, the requirement has effectively been eliminated by a seemingly presumption of irreparable harm arising from a (very slight) showing of probable success on the merits. See Cadence Design Systems, Inc. v. Avant! Corp., 125 F.3d 824, 827 (9th Cir. 1997),. See also 3DO Co. v. Poptop Software Inc., 1998 WL 962202 (N.D. Cal. 1998).

I mention all of this because of a draft article by Professor Tomas Gomez-Arostegu entitled available at ssrn here called “What History Teaches Us About Copyright Injunctions and the Inadequate-Remedy-at-Law Requirement." Here is his abstract:

Our Supreme Court has held that as a general matter an injunction cannot issue if there is an adequate remedy at law. This follows, according to the Court, because the standard for when injunctions may issue derives directly from the practice of the English Court of Chancery around 1789, which followed the same principle. This Article argues that the Supreme Court’s reading of general Chancery custom is inapposite in copyright cases, and that, as a matter of historical practice, the Chancery never inquired into whether a copyright plaintiff had an adequate remedy at law. The remedies at law were deemed categorically inadequate. The Supreme Court could thus hold today, without running afoul of traditional equitable principles, that a copyright injunction can issue without regard to the adequacy of money damages. This Article reaches its conclusion only after undertaking the most comprehensive treatment of the subject to date. It relies primarily on the original manuscript records of 215 infringement suits brought in the Court of Chancery from 1660 to 1800, which are stored at the National Archives in Kew, England, and a further review of earlier copyright-infringement suits circa 1557 to 1660 in antecedent tribunals, many of which are also only available in manuscript form. The topic of this Article is particularly timely given the Supreme Court’s recent decision in eBay Inc. v. MercExchange, L.L.C. (2006), where it discussed the standard for issuing injunctions in patent cases, and where Chief Justice Roberts stated in a concurring opinion that lower courts should consider the inadequacy requirement in light of historical practices.

Professor Gomez-Arostegu has done great historical work; while I don’t think that any of the Stationers’ Company or Star Chamber proceedings have any relevance because (1) the rights at issue were not copyright rights, and, (2) the proceedings were not chancery court proceedings, the historical discussion is nevertheless interesting, and his general thesis is provocative.