Black Market Friday

The U.S. government stepped up its enforcement against counterfeit copyrighted products such as DVDs again, shutting down over 100 domain names where counterfeit and pirated goods were being offered. This is in addition to other seizures that took place throughout the year.

The websites are replaced with notices that the website has been taken down as part of a seizure. As the government steps up its enforcement and ability to take down domain names, will private parties be able to take advantage of such remedies as domain name seizures in the future?

Copyright Office Publishes To-Do List

Last month, the Register of Copyrights released “Priorities and Special Projects Of The United States Copyright Office.”

The paper includes 17 priorities and 10 special projects that the Copyright Office will focus on for the next 2 years.

Three studies are proposed:

(1) Mass book digitization

This study largely stems from the Google Book Search litigation. (See previous blog entries here.) Some of the issues being researched include the Section 108 library and archive exceptions in digitalization, the current landscape and marketplace, addressing the issue of orphan works, and how to facilitate digitalization through licensing. It seems that the U.S. Copyright Office would like a say in the Google Book litigation but unlike Google, it seems that the U.S. government has additional considerations.

(2) Legal treatment of pre 1972 sound recordings

This is a goal raised previously as to how to treat pre-1972 sound recordings that were not covered by federal copyright. One issue is how to cover these works under federal law. (It is possible that the decision in Golan v. Holder may have an impact.) Another major issue is the impact (especially financial) on affected rights holders; and

(3) Small claims solutions for copyright owners

This study is not only the newest but also most intriguing. The Copyright Office is looking into methods of resolving copyright infringement claims involving lower amounts of money. Public comments will be due in the beginning of 2012. While the cost of litigation is high, it is difficult to perceive what the Copyright Office could propose.

IIPA Study Shows the Economic Impact of the Copyright Industry

While copyright has certainly become more prevalent in our society, I do not believe most people understand the impact that copyright has on the U.S. economy. The recent International Intellectual Property Alliance (IIPA) study released this month shows just how much impact the copyright industry has. The copyright industry employs over 5 million people in the U.S. The average salary exceeds the national average by more than 25%. The industry and those built around the industry make up over 10% of the national gross domestic product.

Not only does the copyright industry make up a significant amount of the domestic economy but its products are significant exports as well. Over $130 billion dollars in sales are made overseas. That's more than airplanes and cars.

The report is available on the IIPA website. The report was prepared by Stephen E. Siwek of Economists Incorporated.

Numbers like these explain the powerful lobbying power of the copyright industry. Regulation is also very significant to protect the copyright interests. It seems fairly clear that computer software is a driving force behind most of the copyright figures.

YouTube Case Heard By Second Circuit

Last month, the Second Circuit heard arguments in the Viacom v. YouTube appeal.

Summary of the district court decision: Part I, Part II, Part III

While Viacom claimed that YouTube was well aware of infringing materials being posted and that the Court should not allow rampant infringement, YouTube countered that there were no instances where the infringing works were not taken down following notice from the owner. During the arguments,
YouTube touted its ability to remove the infringing works within hours of the notice of infringement and have developed software to detect copyrighted works.

One of the problems expressed by the panel was how to calculate damages. One judge expressed that he believed that Viacom could be looking for some type of license arrangement. However, by taking the case this far, it would seem that Viacom is interested in more than a licensing arrangement. YouTube has arrangements with other companies. Viacom included several references and comparisons to Grokster.

Ultimately, the question about who should bear the burdens regarding copyright infringement will need to be answered. YouTube claims they need notice to determine whether something that is posted on YouTube is infringing the work of another.

It will likely be several months before a decision is reached.

Supreme Court Updates

Golan v. Holder
A few weeks ago, arguments were held before the Supreme Court in the Golan v. Holder case. The case challenges whether Congress has the ability to grant copyright protection to works that were previously in the public domain (See my previous post on case).

A copy of the transcript is available on the Supreme Court's website.

The Court seemed very engaged in the questioning for this matter which contained numerous hypotheticals, questions of First Amendment scrutiny and whether the government had already granted copyright protection to works that previously did not have any with analogies to 1790’s law and a moment of levity from Justice Breyer.

Vernor v. Autodesk
Back from its summer vacation, the Court denied certification to another copyright case Vernor v. Autodesk.

The case was summarized in previous blog entries:
Battles in Seattle Part 2 of 3: Vernor v. Autodesk
Battles in Seattle Vernor v. Autodesk Decision

This means that the Ninth Circuit decision will stand, thereby making software licenses not subject to the first sale doctrine under Section 109 of the Copyright Act.

Princeton Moves to Open Access for Scholarly Works

Given my previous blog entry on Princeton University and its copyright policy, I thought it fair to show the recent change on Princeton’s policy with respect to copyright for scholarly works for faculty. The university approved a change to its copyright policy to encourage open access. Under the policy, the university is granted a non-exclusive right to make the faculty articles available. The university claims its intended purpose is to prevent faculty from giving away all of their rights in publishing the articles in scholarly journals (which charge fees for their works). It is interesting to note that the university claims that the faculty maintains their exclusive rights in all of their works. (Which seems somewhat contrary to the university’s actions with other works – see previous blog entry.) Of course, faculty members may seek waivers. The university makes it seem that they are following in the footsteps of other universities and hopes that it will force journals to amend their publishing contracts thereby preventing granting full rights to the publishers. This is an interesting concept. I do not know how successful it will be or who stands to benefit the most. The FAQ at the end also provides some insight into the potential impact.

Damages: $1 Billion Dollars Off

In a follow up to the damages awarded in Oracle v. SAP, the court has determined that the $1.3 billion (yes, with a B), awarded by the jury was excessive and contrary to the evidence. The judge presiding over the case believes that $272 million was the amount proved. The judge has indicated that there may be a new trial if Oracle does not accept the lower award. Early indications were that Oracle may consider challenging the ruling. It is extremely rare that copyright damages amount to $272 million dollars but I guess when you consider that the judge is offering $1 billion dollars less, $272 million does not seem as much. What will Oracle decide? Will it be worth the effort to go after a billion?

What Do You Think?

I saw this article last week and it raised some interesting questions. And here.

An arrest was made at Fook On Sing Funeral Supplies in Chinatown in Manhattan. Wing Sun Mak was charged with criminal copyright infringement. The store sells cardboard cutouts – such as mansions, televisions and Louis Vuitton and Burberry luxury goods. These items are given as symbolic gifts and burned at Chinese funerals.

According to the news report, the arrest report claims the defendant was observed selling counterfeit handbags with Burberry and Louis Vuitton trademarks. I fail to follow how the defendant was charged with criminal copyright infringement on these grounds.-- unless the trademarks are also copyrighted (which is possible under certain instances). However, apparently, the defendant also sold handbags and loafers that had similar print designs to Louis Vuitton and Gucci. (It is possible to copyright fabric designs.)

The problem arises where the buyer clearly knows the goods are not real but are merely made of cardboard. I wonder if the store sells the goods with a luxury brand name or design for more than a more generic cardboard cutout. Although, it also raises the question: Why couldn’t the store simply sell the cardboard versions without the copyrighted material and/or trademark?

It raises an interesting question on fair use. Under the four factor test in Section 107 of the Copyright Act, courts consider: (1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work.

Presuming the copyright infringement is based on the fabric design, it would seem that there is a commercial use of the copyrighted work by the funeral supply store, although its use would not necessarily be the same commercial use as the actual goods bearing the copyrighted works. Under factor #3, the funeral supply store would be attempting to take the copyrighted work as a whole. But factor #4 would favor the defendant. Selling a cardboard cutout is not likely to effect the market for Gucci or Louis Vuitton goods bearing copyrighted works. When viewed in light of the purpose of burning the cardboard cutouts as part of a funeral ritual, it becomes more apparent that defendant’s actions should not affect sales of copyrighted luxury goods.

At the same time, it seems unfair for these businesses to capitalize on the goodwill and artistry of others without remuneration. I come back to the fact that these designs and trademarks do not have to appear on the cardboard cutouts to sell them but it seems that the use of these materials must have additional commercial than those without the designs and trademarks. While a close question, I think this factor weighs more heavily in not allowing the fair use defense to apply.

What do you think?

Music Publishers Settle with YouTube...

In a similar lawsuit to the Viacom v. YouTube dispute, music publishers had sued YouTube for copyright infringement.

However, the court found that YouTube was not an infringer because it responded to notices. The decision was appealed but now the National Music Publishers Association has settled its claim. Apparently, the settlement will allow for a collection of royalties to Harry Fox where ads from YouTube appear with user generated videos featuring a songwriters and publisher’s music.

YouTube will use information provided by the NMPA to identify the copyrighted works. No word on whether or what type of license has been arranged between the parties regarding the information provided by the NMPA. (Viacom has accused YouTube of requiring licensing which allows YouTube to use the submissions for far more than just the mere purpose of identifying infringement and infringing works. See previous blog entry.)

Does this mean that a settlement is in the near future for Viacom and YouTube? Highly doubtful given the acrimony between the parties.

Bond...One Really Big Bond

In the never ending saga of the Bratz case, there is a new decision in the case. First, Mattel was able to in essence put MGA out of business until the Ninth Circuit reversed the decision for Mattel and ordered a new trial. At the new trial, MGA was successful and Mattel was order to pay hefty damages.

Now if Mattel wants to appeal to the Ninth Circuit, it will require a $315 million dollar bond. (Mattel’s damages totaled $310 million.) Mattel has until August 23, 2011 to post the bond.

8th Circuit Decides the 3rd Dimension Adds Character

Recently, the 8th Circuit decided an appeal in Warner Bros. v AVELA.  AVELA makes memorabilia such as snow globes, puzzles, t-shirts and other products primarily from movies.  Warner Bros. sued AVELA for copyright infringement for use of materials associated with Gone With The Wind, The Wizard of Oz and Tom & Jerry.  Some of the images were based on posters and still photographs which AVELA alleged fell into the public domain.  These promotional pieces were created before the motion pictures were published.  These works were all subject to the 1909 Copyright Act.  The Eighth Circuit agreed that several of the images were published even though there were restrictions on the use of the promotional works, the predecessors in interest to plaintiff intended the works to be provided to the public.  Some of the works were published without any copyright notice.  Prior to 1989, copyright notices were required.  Several works fell into the public domain due to the failure to put a copyright notice on the works.  In addition, some of the works fell into the public domain because the works were not renewed.  (Under the 1909 Act, copyrighted works were required to be renewed every 28 years to maintain the registration.) 

A copy of the decision is available here. 

There are 2 troubling aspects of the decision.   (Full disclosure:  I previously worked on this brief before the district court.)

First, the Court decided that where the press photos such as Judy Garland as Dorothy in The Wizard of Oz which were created before the movie was complete were in the public domain.  However, the Court found that the combination of the photo with the phrase, “There’s no place like home,” constituted copyright infringement of the Warner Bros. character.  This does not make sense.  Clearly, the phrase, “There’s no place like home” is not copyrightable in and of itself.  (Short phrases are not copyrightable.)  Further, a similar phrase “There is no place like home” was used in the Frank L. Baum novel from which the movie is based.  (The Frank L. Baum book was published in 1908 – which places the book in the public domain since before AVELA started creating the memorabilia.)    

Second, the Court decided that the 2-dimensional works such as puzzles and t-shirts that are based on the works that fell into the public domain were not infringing and thus AVELA should not be permanently enjoined.  However, 3-dimensional works such as snow globes based on works that fell into the public domain were infringing and thus subject to a permanent injunction.  The Court reasoned that the 3- dimensional works were based on the characters from the movies (owned by Warner Bros.). 

This seems contradictory.  Clearly, derivative works based on works in the public domain are subject to copyright protection.  However, the Court finds that AVELA infringed Warner Bros. copyright for adding a third dimension to the posters and pictures in the public domain.  The Court comments about the length of a nose unable to be determined in a 2-dimensional work. Even if true (which I have some doubt – there is such a thing as scale and proportion and multiple angles which may create some level of determination), why wouldn’t these considerations be considered scenes a faire or subject to an artist’s interpretation and thus, capable of its own separate copyright? 

Given the recent Bratz decision limiting the infringement of derivative works for the different faces of the different generations of Bratz dolls because there were only a limited number of ways to create faces and facial expressions, the Eighth Circuit seems to disagree.  Cf.  Mattel, Inc. v. MGA Entm’t, Inc., 2010 U.S. App.  LEXIS 26937, *22 - *32 (9th Cir. 2010).  There is only so many ways which the back of a head or the dimensions of article of the characters’ clothing or costumes can be drawn. 

What the Eighth Circuit has done is not only remove the works from the public domain (in the instance of the posters / pictures used in connection with short phrases) but also has effectively claimed that copyrights in characters can extend to prevent derivative works in the public domain if the derivative works are three-dimensional.  Yet if both the original work in the public domain and the derivative work are both two-dimensional, then there is no infringement. 

A finding that a copyright in a character extends to prevent the creation of three dimensional derivative works based on two-dimensional works in the public domain does not make sense.   Such line-drawing fits no purpose.  It creates not only a bad rule and precedent but an impossibility, limiting the creation of new works.  Preventing derivative works from being made from works in the public domain was not the intended result of the Copyright Act.   

Follow-up on ICE Domain Name Seizure

As blogged previously, the U.S. Customs has seized domain names from those who post infringing works on their websites.  One of the seizures was for rojadirecta.com and rojadirecta.org owned by Puerto 80 Projects S.L.U. (“Puerto”). It is alleged that the two referenced websites collected a list of third party links to live sporting events and pay-per-view events. 

Puerto sought to obtain the domain names back seeking immediate release of the seized property. The U.S. government argued that Puerto could not show substantial hardship and giving back the domain names would only lead to further criminal acts. 

Puerto claims harm because of a reduced number of visitors. (Puerto operates other websites such as rojadirecta.me that were not seized.) The Court rejected this as substantial harm. Puerto also raised the First Amendment; however, the court rejected this argument finding that the forums for comment are not the purpose of the websites seized. The court finds the purpose of the two seized websites is to catalog links to copyrighted materials.  See the Court's August 4, 2011 order here.

The court did not reach the question of whether giving back the domain names would only foster criminal activity but may take up the question when Puerto’s motion to dismiss is heard next month.

Things to Know about Copyright and your Website

Copyright protects the expression in tangible form of original works of authorship.　 A website – like a brochure, an advertisement, a press kit, or a press release – is a valuable asset and marketing tool which merits protection.

1. Create and use your own images. The best way to avoid infringement claims against your website is to create your own original images for display. If you are not creating your own images...
   
   
   1. Get permission before copying internet images. Copying images from the internet is controversial. If the owner of the image gives permission, you can use the image. Many times, however, the purported owner of the image is not the actual owner (i.e. the image was obtained falsely), which can lead to an infringement claim. The copying of images created by third parties without permission is infringement. See FragranceNet.com, Inc. v. FragranceX.com, Inc., 679 F. Supp. 2d 312 (E.D.N.Y. 2010) (where defendant used over 900 copyrighted images from Plaintiff's website).
   
   
   2. Follow the terms of the images’ license agreement. Taking images from purchased software (i.e. Microsoft Word Clip-Art) is not necessarily infringement. By purchasing the software, you have accepted the license agreement terms. It is imperative to review the license to find out how the images may be used. For example, sample language from the Microsoft Service Agreement states that Microsoft product users that have access to media images, clip art, and the like, “may copy and use the media elements in projects and documents.” They may not, however, “(i) sell, license, or distribute copies of the media elements by themselves or as a product if the primary value of the product is the media elements; (ii) grant your customers rights to further license or distribute the media elements; (iii) license or distribute for commercial purposes media elements that include the representation of identifiable individuals, governments, logos, trademarks, or emblems or use these types of images in ways that could imply an endorsement or association with your product, entity or activity; or (iv) create obscene works using the media elements.”  The use of licensed images from the internet may not be infringement, as long as you follow the terms of the license. See Stockart.com v. Engle, 10-CV-00588-MSK-MEH (D. Col. Feb. 18, 2011) (where the use of a copyrighted photo on a website without a license was a violation of the plaintiff’s copyright).


2. If possible, use only original text. When preparing text for a webpage, the text should be original, written specifically by the creator. The use of another’s written work without permission is copyright infringement. See Cvent v. Eventbrite, Inc., 96 USPQ2d 1798 (E.D. Va. 2010) (where the defendant’s online directory information was “scraped”, or copied, from plaintiff’s website)


3. Avoid making source code available for public use. The source code of a website can also be registered for copyright protection. The copying of registered website source code is an infringement. See Hermeris v. Brandenburg, 10-2531-JAR (D. Kan. Jan. 23, 2011) (where the defendant’s copying of content and source code of the plaintiff’s online document preparation business was copyright infringement).


4. Video and/or sound recordings should be copyrighted separate from the website. If a website contains video and or sound recordings (such as background music), they should be separately copyrighted (apart from the website itself) as these materials could be easily lifted separately and may have their own independent worth.
 

5. Web designers should operate under a work-for-hire contract. To determine whether a work is made for hire, one must first establish whether the work was made by an employee or an independent contractor. See Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989). If the work is made by the employee, then the work is generally considered to be a work made for hire, and the employer retains control of the work. If the work is created by an independent contractor, then the work is only a work made for hire if (1) it falls within one of the nine enumerated categories of works in Section 101 of the Copyright Act, and (2) the parties specifically agree in a written document that the work is one made for hire. If these provisions are not met, then the work is not a work made for hire, and the independent contractor is considered the “author” of the work. It is therefore essential to create a written agreement with an independent website designer to ensure that the designer assigns all copyright ownership to the website owner. Companies should also be advised that if their website is created by an independent contractor, there should be indemnification clauses in the assignment to ensure that the work, including the source code, is original.


6. Register, register, register. U.S. companies are required to obtain copyright registrations in order to bring an infringement action in the United States. In registering copyrights, website owners should identify the portions of the site that are being copyrighted. In addition, if a copyright owner files for registration within three months of the work’s publication, he is entitled to several remedies in a case of infringement potentially including attorney’s fees.


7. If a copyright owner decides to file a complaint for copyright infringement... Broad language, such as “all texts, photographs, selection, arrangement and compilation”, would be insufficient against a copyright infringement claim. See Salt Optics v. Jand, SACV 10-0828 (C.D. Cal. Nov. 2010) (where specific indication of the infringed portions of a website were necessary to bring an infringement claim).

 

Opting Out, Opting In - Google Books Settlement Update

Last week, a hearing was held in the Southern District of New York by Judge Chin for an update on progress on settlement in the Google Book Settlement.

However, there has been no progress. Previously, the judge had indicated that the settlement may clear antitrust hurdles if the default provision was that authors had to opt-in to the settlement to agree to make their works available through Google Books. This will also allow for snippets of the work available through a search mechanism on Google.

An attorney from Google indicated that there were business issues in addition to legal issues that were still being worked out.

Previously, the Court indicated that it was doubtful that a settlement would be reached. Id. Google does not have much interest in the opt-in provision. Id.

Without a settlement, the judge will likely have to decide whether the use of the snippets from books are a fair use for which Google can provide to users or whether these may be infringements of the literary works. Is it possible that this is what Google actually seeks?

Rather than pay a hefty settlement sum for an opt-in option that is not as attractive to Google, it may merely wait to see if its use of the published materials from authors is a fair use – for which Google may have to pay nothing at all.

The parties have until September 15, 2011 before the next report is due to the judge.

IT’S FRIDAY…NO IT’S $2.99…BUT IT'S FRIDAY...BUT IT'S $2.99

The YouTube viral music video sensation “Friday” featuring Rebecca Black is now the subject of a copyright dispute. 

Apparently, Ark Music, the company that produced the video, wanted to start charging $2.99 for viewing of the “Friday” video on YouTube.  No one told Rebecca Black.  Apparently Black only learned of this development by fans. 

Upon learning of the charges, Black’s lawyers sent a copyright takedown notice to YouTube for the video.  Black’s lawyers claim that Ark Music does not have the rights of publicity or right to advertise the video.  Black’s lawyers also claim that Ark Music has failed to provide the master recording of the song and that the company has no right to exploit the work (i.e. charge $2.99 on YouTube for the video). 

While the dispute is being decided, the video has been removed from YouTube. 

Is this one of those instances where a copyright takedown actually benefits the public.....will there be withdrawal without free access to the “Friday” video, and would anyone pay $2.99 to rent it?

Hangover Lawsuit Update

Last month, Warner Bros. and S. Whitmill “amicably settled” the copyright dispute regarding the use of the tribal tattoo that appears on Mike Tyson’s face from being used on another character in The Hangover 2.  The details of the settlement were not disclosed.

Prior to reaching an agreement with Whitmill, Warner Brothers informed the Court that if it is unable to resolve the lawsuit involving the tribal tattoo on Ed Helms' character in The Hangover 2 (detailed in my previous post), that WB would take the step of altering the appearance of the tattoo on one of the character’s faces in the movie when it is released on DVD.  This apparently is an expensive alteration.  However, it may be less expensive than having to pay damages for infringement.  Obviously, if the reproduction of the tattoo were not longer to appear in the movie, then the claim for additional damages would be mitigated. 

An additional twist on this case is from David Nimmer who filed a declaration as an expert for Warner Brothers. The declaration can be seen in its entirety here.

Part of Nimmer’s argument is that the tattoo (and therefore, the copyrighted work) is not fixed in a tangible medium when the design was affixed to Tyson’s face.  There are several references to the history of the Copyright Act and failure to mention tattoos as part of the legislation.  But I think the analysis misses the overall structure and underlying purpose of the fixation of the work into a tangible medium.  Part of the purpose of the fixation was to ensure that the work was not fleeting.  While arguably, the tattoo may be able to be removed, it does nothing to change the analysis that the work is fixed.  The work was clearly capable of being drawn onto a piece of paper or a picture of the work as appeared on Tyson’s face would suffice to show how the work appeared.  It also raises a completely different question, because clearly Whitmill had to file a deposit of the copyright and could not have filed Mike Tyson’s face.  (I presume a photograph was submitted to the Copyright Office.)  Without getting into the merits of the level of protection that the tattoo should be provided under copyright law, it seems a rather flimsy argument to claim that the work is not fixed in tangible medium.  The photograph itself would show the tattoo artist’s rendering. 

The argument lacks credibility.  By analogy, if an artist drew sketches in pencil, would the drawing not be capable of copyright protection because the copyright registration indicated that the sketch was in pencil and was capable of being removed with an eraser?

Another argument pressed by WB and Nimmer is that there are no reported cases involving copyright infringement for tattoos.  (A case involving Rasheed Wallace was settled out of court – however, in that case, the tattoo involved was an actual tattoo on the person involved not a temporary reproduction on another person.)  There is a copyright infringement case involving temporary tattoos. See Gonzalez v. Kid Zone, Ltd., 2001 U.S. Dist. LEXIS 12008 (N.D. Ill. Aug. 14, 2001).

Because of the settlement we will have no way of knowing how the case would have turned out.  What do you think the Court would have decided? 

Lost in the Moment?

Super Bowl advertisements tend to be the most memorable ads of the year. 

Last year, a Chrysler commercial prominently featured Detroit native Eminem and the background music was one of his hit songs, “Lose Yourself.” 

Last month Eminem's publishing company, Eight Mile Style, filed a lawsuit in a German court for Audi’s use of the same song in a video similar to the Chrysler ad promoting the 2012 Audi A6 Avant.

Audi claims the video is not an advertisement and has not aired in the United States.  According to Audi, the video was shown at a press event in Germany.  The video has since been posted on YouTube and can be viewed here.

While the Audi video has not appeared on television or radio in the U.S., jurisdiction and infringement may be hard to establish for a copyright infringement action in the U.S.  This is likely why Eight Mile has filed suit in Germany. 

However, it poses an interesting question...if the YouTube video is available in the United States, could a copyright infringement action be brought in the United States? 

Would Audi had to have authorized the copy of the video to be allowed to be posted on YouTube in order for a U.S. lawsuit to be brought?  I do not believe a U.S. lawsuit will be filed but I will keep up to see what happens in the German action.

The Hangover 2: Did they go a tattoo far?

Last week brought good news for Hangover 2 fans -- the movie premiered over the weekend as scheduled, despite the copyright infringement lawsuit recently filed against Warner Brother Entertainment by tattoo artist S. Victor Whitmill (Complaint found here via Wired). Along with the lawsuit, Mr.Whitmill sought an injunction to prevent the release of the motion picture.

Mr. Whitmill is a tattoo artist located out of St. Louis, Missouri, whose most notable work is the design tattooed on the face of Mike Tyson. Whitmill obtained a copyright registration for a tattoo design for a tribal design on April 19, 2011.

Mike Tyson appears in The Hangover 2 but it is not the tattooed image on his face that Whitmill is seeking to enjoin but the replication on Ed Helms' character Stu.

I have not yet seen the movie, but in the trailer for The Hangover 2, it appears that Stu wakes up after a night of partying with a tribal tattoo similar in nature to the one that appears on Mike Tyson’s face. The tattoo is also featured in most of the print advertising for the film.

According to his complaint, Whitmill owns the rights to the image based on an agreement that was signed at the time Tyson obtained the tattoo. One of the terms of the agreement (a standard tattoo release form) is that the artwork belongs to the artist, not the person who recieves the tattoo. Whitmill alleges that as the owner of the copyright, he has exclusive rights to copy, distribute and publically display the tattoo. (Obviously, it would be difficult for Whitmill to try enforce any rights in the tattoo as it appears on Tyson’s face. One reason is because Tyson is the owner of the particular copy and has the right to display the work. Second, on some level there must be an implied license that the tattoo artist agreed to by placing his work on Tyson’s face. Otherwise, any photograph of Tyson could be considered an unlawful reproduction.)

In its Answer, Warner Brothers argued that there is no copyrightable expression in the tattoo as the design is not sufficiently original or creative, and that tattoos on skin are not copyrightable. Warner Brothers also hired David Nimmer to provide a declaration in support of the lack of copyrightablity.

Even if the Court does decide that Mr. Whitmill does indeed own the copyright to the tattoo, there are still a number of issues that will need to be decided any ruling on infringement can be made.

Copyright Class is in Session - YouTube Copyright School Part II

This is a follow up to my post of earlier this week which covered YouTube's reasoning behind creating their new Copyright School. This post addresses the content of YouTube's lesson.

While the cartoon has some serious information in it, there seems to be a level of Simpson-esque social criticism that many may not take the message seriously. I reserved some level of judgment on the YouTube Copyright School idea but this is a farce. I guess you cannot expect much from a company whose popularity has been based on posting of videos without the copyright owner’s authority.

This Copyright School video seems to be a significant acknowledgement that YouTube is a platform for copyright infringement. (Don’t get me wrong there are postings to YouTube that do not infringe on copyrights; however, its previous success was based on infringing works. The successes and number of views and hits for “It’s Friday” would not have developed without users flocking to the site to see clips from “The Daily Show,” “The Colbert Report,” or numerous other unauthorized postings protected by copyright.).

While YouTube seems to be evolving, more and more often YouTube seems much more like Napster. Knowing that YouTube plays some type of active role in screening its videos makes it worse. A copyright school video like this makes you wonder if YouTube should not have to view the Napster and Grokster decisions and be schooled on contributory and vicarious copyright infringement too.

Shoot First, Apologize Never, Then Offer a Pop Quiz With a Get Out of Jail Free Card

YouTube seems to be in a position similar to Baidu. Facing a potential appeal and negative campaign in terms of its copyright policy, YouTube is now turning its policy to making violators go back to school. (Yes, back to school.)

YouTube has a three strikes and you’re out policy regarding DMCA notices. Following the third strike, a user is suspended. (Circumventing this suspension can be as simple as opening a new account.) However, YouTube is now offering a new method to remove strikes – take a copyright class and pass a test. (YouTube insists that these users must then maintain a clean record.)



YouTube is also trying to self-regulate, pledging to build on its copyright policy including a 24 hour takedown policy, improving responses and system for DMCA takedown requests and improve its anti-piracy review.

A campaign by YouTube to show its improvements in assisting and taking seriously copyright complaints….is YouTube hedging its bets about its chances of reversal in the Viacom case? (Previous coverage of YouTube v. Viacom can be found here.)

Maybe the decision involving parent company Google in the book settlement case has YouTube a little more concerned. (That is a blog post for another day.)

There is an irony here. Clearly, YouTube knew that its site attracts copyright infringement. Viacom would argue that YouTube encouraged and profited from copyright infringement. Now, YouTube will be providing a course on copyright.
Now that YouTube is clearly the market leader in video content posting on the web and the website that most people would quickly go to first if looking for a video, YouTube seems to now want to not only clean up its image. A new startup for video web content would likely have to follow the YouTube model to allow significant amounts of infringing material to be posted to direct traffic to its site. Now YouTube can try the corporate responsibility routine and keep competitors at bay with all things – copyright.

YouTube, like Baidu maintains that the content that appears on its website is the uploader’s responsibility.

What effect do you think the school will have?

Is YouTube similar to Baidu trying to self-regulate fearing government intervention? Is it too late? Will the government step in? What happens (either way) in the Viacom case may determine if (or when) the government takes action?

Supreme Court Grants Cert in Another Copyright Case

The Supreme Court has become more active in taking copyright cases recently. The Court granted certiorari in Golan v. Holder which involves a question of whether the Uruguay Round Agreements Act (“URAA”) is constitutional.

The URAA allows for copyright protection for foreign works that were previously in the public domain. The district court in Colorado first found for the government but on remand the Tenth Circuit asked the district court to determine whether the URAA is content – based or content – neutral and found that the URAA violated the First Amendment. There were cross-appeals before the Tenth Circuit. Plaintiffs are artists who used foreign works that at the time were in the public domain and but the copyright in the original works were restored under URAA. Plaintiffs sought injunctive relief claiming the statute was invalid, force the government not to enforce actions for restored copyrights and the Register of Copyrights to cancel restored registrations. The government as Defendant appealed summary judgment for Plaintiffs and sought reversal on Defendant’s motion for summary judgment. The Tenth Circuit reversed finding the URAA does not violate the First Amendment.

What is the URAA?

As part of compliance with TRIPs (Agreement on Trade Related Aspects of Intellectual Property Rights) in 1994, the U.S. was required to provide copyright protection to foreign works where their term for protection had not expired. This was originally part of the Berne Convention (a multinational treaty which the United States joined in 1989); however the U.S. failed to enact a law to extend protection for foreign works.

The URAA restored copyright protection for foreign works which had fallen into the public domain because:

1. the work failed to comply with formalities (i.e. the failure to place a copyright notice on a work prior to 1989 (and the enactment of the Berne Convention) could subject the work to falling into the public domain)


2. lack of subject matter protection


3. lack of national eligibility

Nothing protected foreign works whose term of protection had expired. The URAA also provided for dispute resolution through the World Intellectual Property Organization. The URAA also provided mechanisms for providing notice of restoration and a grace period for those who used the works (and may have been potential infringers) to dispose of works without liability.

The parties stipulated that the URAA is content neutral and thus subject to intermediate and not strict scrutiny. Under intermediate scrutiny, the statute will not be unconstitutional if there is not substantial burden on speech to further the important government interests.

The appellate court sided with the government finding compliance with treaties, protecting U.S. copyright holders interest in foreign countries (as reciprocity may be granted with other treaty members) and restoring foreign authors rights in the United States to be important governmental interests.

Among the reasons cited by the court were its deference on foreign affairs issues to Congress and the President and economic arguments about the losses the U.S. authors would suffer because their works would fall into the public domain due to failure of the U.S. to agree to copyright relations with different countries (and recognize the rights of the foreign authors). Without the reciprocal protections offered under the URAA, American authors would not be provided with “restored” copyrights in other countries. Congress considered the effect on those who would be infringing “restored” copyrights.

The Court also found that the law was not overbroad and extending beyond the government interests. The court claims that the URAA does not interfere with the built in protections of the First Amendments in copyright law, such as fair use and the idea / expression dichotomy. (Although in this instance, there is an argument that the URAA does stifle free speech and its scope by removing works that were already in the public domain.)

The Tenth Circuit also rejected Plaintiffs’ arguments that the URAA is facially unconstitutional. Plaintiffs argued there should be a bright line about what is in the public domain. However, relying in part on Eldred v. Ashcroft, 537 U.S. 186 (2003) (the Supreme Court decision upholding the Sonny Bono Copyright Extension Act – allowing for copyright protection to be extended to the life of the author plus 70 years), the court found that Congress had the power to extend copyright to works in the public domain.

The court failed to address an important distinction between Eldred and the URAA. In Eldred, Congress was not removing any works from the public but merely extended protection for works that were currently protected. In Golan, Congress was removing works that were already in the public domain. Retroactivity that may pull works out of the public domain could be more problematic than the issue in Eldred.

Will the Supreme Court extend Congressional power to take works out of the public domain? This is a classic copyright case with constitutional implications that the Supreme Court could not pass up.

White House Announces IP Enforcement Strategy

On March 15, 2011, the Administration issued its White Paper On Intellectual Property Enforcement Legislative Recommendations, which provides 20 legislative proposals and actions to be taken in connection with the goals set forth in the Joint Strategic Plan on Intellectual Property Enforcement. (You can see my previous coverage of the the Joint Strategic Plan here.)

Among the legislative recommendations:

• Stricter criminal penalties for copyright infringement
• Include specific language to provide for copyright infringement for streaming video over the Internet as a felony
• Allow for wiretaps by authorities for criminal copyright and trademark violations
•  Allow Customs to work with intellectual property rights holders to provide pre-seizure information to determine whether products are infringing
• A series of statutes to provide greater protection against counterfeit pharmaceuticals;
• Allowing Customs to issue penalties for infringing exports and imports;
• Allow for relief for voluntary disclosure to Customs of unintentional acquisitions of infringing goods; and
• A right of public performance for sound recordings transmitted over broadcast radio.

A full copy and explanation of the recommendations are available on the White House website.

Of note, is the continued concern regarding infringement for streaming video over the Internet as a felony. Following the UFC v. Justin.tv lawsuit, The Hurt Locker lawsuits, and ICE’s domain name seizures.

This issue was not the focus of the previous Joint Strategic Plan but has quickly become a priority.

The Criticism of Baidu

Apparently, the U.S. is not the only country with problems with Baidu...one of the members of The Naughty List. In China, Baidu, is a very popular search engine that provides copyrighted works posted by users.

Earlier this month, a group of Chinese authors circulated a letter vowing to stop creating works if their works continue to be infringed. The authors blame the web service for allowing the posting of copyrighted works.

Reuters conducted further searches on the Baidu website and found popular books by Stephanie Meyer and J.K. Rowling also available.

Baidu claims that they take down infringing works upon investigation of complaints. Apparently, a previous case found that Baidu was not an infringer or violate any Chinese laws. Is anyone familiar with this case? Is this similar to the infringement analysis for YouTube in the United States?

Baidu has responded to the criticism by saying it would introduce anti-piracy technology starting in May. This past week, Baidu also announced that it had deleted over 2 millions files from its online library.

The Naughty List

As part of the 2010 Joint Strategic Plan on Intellectual Property Enforcement, the United States Trade Representative released a list of Notorious Markets. The list includes marketplaces that have been the subject of enforcement action or that may merit further investigation for possible intellectual property rights infringements. This list is intended to include places which enable or support piracy and counterfeiting.

Some of the places are physical locations such as Bahia Market in Ecuador and Silk Market in Beijing, while others are online locations such as ThePirateBay and Baidu which is alleged to be among the top ten visited sites (and number one in China).

Other types of websites include BitTorrent trackers and indexers, live sportscasts streamed over the internet, and software applications for mobile phones.

The Naughty List is available with the USTR report here.

The USTR seeks cooperation of authorities to investigate further and pursue legal action to combat piracy and counterfeiting.

IVI Preliminary Injunction

Back in November I blogged about the Fox/Cablevision dispute and discussed Fox claiming contributory copyright infringement when Cablevision customer service representatives allegedly told their custombers that the blacked out Fox broadcasts were available to watch through ivi.

In September 2010, prior to the Cablevision dispute, Fox and a number of other major broadcasters filed suit against ivi claiming copyright infringement in the Southern District of New York. As it turned out, ivi had begun offering local network television broadcasts in major cities (Chicago, Los Angeles, and New York) over the internet for a fee.

The Court issued a preliminary injunction last month to have ivi cease streaming television broadcasts over the internet. A complete text of the ruling can be found here via Public Knowledge.

Ivi claimed that it was a cable service, and thus was only required to pay a compulsory license; however, it did not obtain consent from broadcasters as required of other cable services. The FCC has not considered ivi a cable service nor did the judge.

Ivi has indicated that it is considering an appeal of the decision to the Second Circuit.

FEDERAL DOMAIN NAME SEIZURES

Immigration and Customs Enforcement (ICE) seized several domain names for sites which are alleged to sell counterfeit products. It is unclear whether the goods were trademarked or copyrighted or both. Products seized included goods from Prada, Gucci, Breitling, Nike, Louis Vuitton, and Burberry among others.

However, this is not the first set of ICE seizures. As it turns out, in June 2010, ICE seized domain names from sites which made music, software and movies available for download. In November 2010, another round of seizures took place. Also, at the beginning of this month after UFC’s lawsuit against Justin.tv, ICE officials seized a number of websites which streamed live video.  Previous blog entry here.  (It seems unlikely that UFC was aware of the seizing of websites which were airing its pay-per-view events as it filed suits just weeks before the ICE seizures.)

There is a question hovering over these actions by ICE. There is current legislation in Congress that would allow for domain name seizures in the civil (not criminal) infringement context in the Combating Online Infringements and Counterfeits Act (“COICA”). Will the success of ICE seizures make private enforcement more likely to pass? Will intellectual property rights holders use this remedy? What level of proof will be necessary to obtain such a remedy? Will domain name seizure be used as a preliminary remedy? Will such a remedy be forced to meet the same standards as applied post-eBay? Will the legislation pass?

Moving Targets

UPDATE: The lawsuits brought for allegations of illegal downloads of the movie “The Hurt Locker” are moving forward. Last year, the U.S. Copyright Group filed a copyright infringement complaint with a federal court in Washington D.C., naming 5,000 unidentified defendants.

Earlier this month, the Copyright Group filed multiple additional complaints for infringement of the movie across the country. Unlike their previous lawsuit, these lawsuits name individual Defendants.

The lawsuits were also filed in courts that have jurisdiction in the areas where the alleged illegal downloading occurred. There are several different venues: federal courts in Massachusetts (where a favorable judgment in the music downloading context already took place), Minnesota (where the Jammie Thomas music download case resulted in favorable jury results for copyright holders) and Colorado, among others.

News reports indicate that the individuals named in the lawsuits are those who previously refused to settle with Plaintiffs. (The reports indicate offers for settlement in the $1,500-$3,000 range.)

Will these lawsuits move forward? Will Defendants settle now that they have been named in lawsuits?

UFC Grapples with Justin.tv over Live-Streaming of Events

Zuffa, Inc., the parent company of Ultimate Fighting Championship has filed a lawsuit in the District Court of Nevada for copyright infringement against Justin.tv. Justin.tv is a website that allows for the streaming of live video through its web portal.

UFC alleges that its pay-per view events are being broadcast on Justin.tv. UFC hired third party vendors to send petitions to take down over 200 video feeds of the October 23, 2010 pay-per view event UFC 121. According to news reports, UFC claims that over 50,000 watched illegal streaming video of UFC 121.

Justin.tv has a terms of use which includes DMCA takedown notices. UFC alleges that Justin.tv’s response has been inadequate. According to a press relase on the UFC website, Zuffa contacted Justin.tv several times over almost a two-year span in attempts to prevent illegal uploading.

It seems likely that Justin.tv is likely to rely on the DMCA safe-harbor provision similar to the arguments made by YouTube in the Viacom lawsuit.

Banned in the United States (and Canada)

As a follow up to the Second Circuit decision in the Salinger case, there is a reported settlement. Defendant Colting wrote an alleged sequel to the Salinger book The Catcher in the Rye. As part of the settlement, Colting's book will not be sold in the U.S. and Canada. The book will be available in other countries.
Further, Colting's book will make no references to Salinger or his book nor can the author use the copyright lawsuit to promote the book.

BARBIE BRATZ
Opening arguments are set to begin soon on a jury trial on remand regarding the Mattel (Barbie) vs. MGA (Bratz). Link to previous blog entry. There are several copyright claims remaining from the first generation of Bratz dolls and a few others; however, copyright infringement claims on many subsequent generations of Bratz dolls were thrown out by the Ninth Circuit. The trial will also include trade secret misappropriation claims stemming from MGA's hire of Carter Bryant from Mattel.

If the Damages Were Not Big Enough....

Following up on the recent lawsuit between Oracle and SAP and the $1.3 billion in damages awarded Oracle (the largest copyright damage award in U.S history), the parties were fighting over 2 other important remedies in copyright infringement actions - interest and attorneys fees.

An award of costs may include attorneys fees to a prevailing party under Section 505 of the Copyright Act. It has been reported that Oracle is seeking over $100 million in attorney's fees.

In addition, Oracle sought over $200 million dollars in interest. SAP argued that interest need not be paid. The court ruled that interest would be awarded but would not be the amount that Oracle sought but based on Treasury rates and calculations would be a much smaller figure (approx. $16 million).

Show Me...Damages

Clearly, damages are a form of monetary compensation. The question is how to assess damages. It is more than difficult to assess. Two recent damages cases prove this point: Oracle v. SAP and RIAA v. Thomas. In both instances, liability was established and now damages have become the major issue.

In Oracle v. SAP, the jury awarded $1.3 billion when SAP copied Oracle’s software and customer manuals. Oracle claimed that a license for such software to SAP would have been around $2 billion dollars. SAP countered that because it was only able to get sway a few of Oracle’s customer to buy from SAP that the damages in the $30-40 million dollar range was more appropriate. Following the verdict, a representative from SAP indicated that “[SAP] will pursue all available options, including post-trial motions and appeal if necessary.”


In November, the third trial in RIAA v. Jammie Thomas-Rassett, a case involving illegal music downloads of 24 songs was held. In 2007, the jury initially awarded the RIAA $222,000. However, due to a jury instruction error, the judge declared a mistrial and the verdict was thrown out. Rather than settling outside of court, Thomas-Rassett opted for a second trial, and in 2009 the second jury awarded the RIAA just under $2 million. The judge in the case subsequently lowered the award to over $50,000.

Both parties appealed the decision and a third jury awarded the RIAA $1.5 million or $62,500 per song. A copy of the verdict is available here via Copyrights and Campaigns. Lawyers for Thomas argued that because the downloads themselves were worth $1 a piece that the damages should be $24. The RIAA had sought a maximum amount of $3.6 million.