In an unpublished decision by the Ninth Circuit Court of Appeals, the Court upheld copyright infringement claim for the public performances of copyrighted musical compositions. Range Road Music, Inc. v. East Coast Foods, Inc. (Case Nos. 10-55691 and 10-55800 – 9th Cir. Court of Appeals – Jan. 12, 2012 decision). An investigator testified that Coltrane standards were being performed by a live band at the Sea Bird Jazz Lounge and that a disc jockey played four Hiroshima songs from a CD.
Defendants claimed that the investigator’s report and declaration should be inadmissible as he was not an expert witness. However, the Court rejected the claims finding that “identifying popular songs does not require “scientific, technical, or other specialized knowledge” under F.R.E. 702.
In addition, Defendants East Coast Foods, Inc. and Herbert Hudson claimed that they could not be liable for vicarious infringement because the Sea Bird Lounge was owned by an independent corporation – Shoreline Foods. The Court rejected this claim finding that Defendants exercised the requisite control over the direct infringer and derived a financial benefit from the public performances. The liquor license at the Sea Bird Jazz Lounge was owned by East Coast Foods. Defendant Hudson was the president of both East Coast Foods and Shoreline Foods and had the authority to hire and fire employees and to prevent acts from appearing at Sea Bird Jazz Lounge. The fact that Hudson had the legal and practical right to stop the infringing conduct played a factor in establishing vicarious liability.
The Court also noted that the Defendants could have purchased an ASCAP license as ASCAP had urged them to over the last 7 years.
Showing posts with label Ninth Circuit. Show all posts
Showing posts with label Ninth Circuit. Show all posts
Friday, January 13, 2012
Thursday, October 20, 2011
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.
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.
Wednesday, December 22, 2010
More First Sale News
Last week the Ninth Circuit ruled on the second of three first sale cases - MDY v. Blizzard. The opinion can be found here.
The case is about the use of bots (made by MDY) to assist in advancing in the World of Warcraft video game owned by Blizzard. For more facts about the case, see my previous blog entry.
Relying on the earlier decision in Vernor v. Autodesk, the first decision in the trio of first sale cases before the Ninth Circuit this term, the Court finds that the players of Blizzard are licensees and not owners of the World of Warcraft software. Blizzard’s World of Warcraft End User License Agreement specifically prohibits users from creating or using third party software to modify Worlds of Warcraft including bots.
However, the Ninth Circuit differentiates between a contract covenant which is a breach of the license agreement and not copyright enforceable conditions. Because the Ninth Circuit reversed the district court decision and determined that the MDY bot did not alter or copy any of Blizzard’s software, it was not a copyright enforceable condition and thus no copyright infringement occurred.
Next the Ninth Circuit had to decide whether MDY committed copyright infringement under the DMCA when it modified its bot to circumvent Blizzard’s Warden technology to prevent bots from connecting to the World of Warcraft servers.
In its interpretation of the DMCA (17 U.S.C. Section 1201(a)), the Court finds that the statute is meant to protect from circumvention of access controls to copyrighted works including decrypting and descrambling works. This does not necessarily affect the exclusive rights under Section 106 of the Copyright Act. The Court notes that this is a departure and differing view from the Chamberlain decision in the Federal Circuit requiring that the circumvention interfere with one of the exclusive rights under Section 106.
Based on this interpretation, the Court finds that MDY does not violate Section 1201(a)(2) for the literal elements and individual non-literal elements of Worlds of Warcraft because the Warden technology does not control access to the Worlds of Warcraft elements. The Warden technology does not prevent access to Worlds of Warcraft on an individual user’s computer but only to the Worlds of Warcraft servers.
However, the Court finds that MDY violates Section 1201(a) for the dynamic non-literal elements of Worlds of Warcraft. The Ninth Circuit explains the dynamic non-literal elements as analogous to the audiovisual display of a computer game which is independently copyrightable from the software program code. Because Warden does prevent access to the audiovisual display of the Worlds of Warcraft from its servers, MDY’s efforts to restructure its bots to circumvent the Warden technology is an infringement.
The Court reversed summary judgment for Blizzard for tortuous interference with contract because there were triable issues of fact.
The case is about the use of bots (made by MDY) to assist in advancing in the World of Warcraft video game owned by Blizzard. For more facts about the case, see my previous blog entry.
Relying on the earlier decision in Vernor v. Autodesk, the first decision in the trio of first sale cases before the Ninth Circuit this term, the Court finds that the players of Blizzard are licensees and not owners of the World of Warcraft software. Blizzard’s World of Warcraft End User License Agreement specifically prohibits users from creating or using third party software to modify Worlds of Warcraft including bots.
However, the Ninth Circuit differentiates between a contract covenant which is a breach of the license agreement and not copyright enforceable conditions. Because the Ninth Circuit reversed the district court decision and determined that the MDY bot did not alter or copy any of Blizzard’s software, it was not a copyright enforceable condition and thus no copyright infringement occurred.
Next the Ninth Circuit had to decide whether MDY committed copyright infringement under the DMCA when it modified its bot to circumvent Blizzard’s Warden technology to prevent bots from connecting to the World of Warcraft servers.
In its interpretation of the DMCA (17 U.S.C. Section 1201(a)), the Court finds that the statute is meant to protect from circumvention of access controls to copyrighted works including decrypting and descrambling works. This does not necessarily affect the exclusive rights under Section 106 of the Copyright Act. The Court notes that this is a departure and differing view from the Chamberlain decision in the Federal Circuit requiring that the circumvention interfere with one of the exclusive rights under Section 106.
Based on this interpretation, the Court finds that MDY does not violate Section 1201(a)(2) for the literal elements and individual non-literal elements of Worlds of Warcraft because the Warden technology does not control access to the Worlds of Warcraft elements. The Warden technology does not prevent access to Worlds of Warcraft on an individual user’s computer but only to the Worlds of Warcraft servers.
However, the Court finds that MDY violates Section 1201(a) for the dynamic non-literal elements of Worlds of Warcraft. The Ninth Circuit explains the dynamic non-literal elements as analogous to the audiovisual display of a computer game which is independently copyrightable from the software program code. Because Warden does prevent access to the audiovisual display of the Worlds of Warcraft from its servers, MDY’s efforts to restructure its bots to circumvent the Warden technology is an infringement.
The Court reversed summary judgment for Blizzard for tortuous interference with contract because there were triable issues of fact.
Wednesday, September 29, 2010
BATTLES IN SEATTLE - Vernor v. Autodesk, Inc. Decision
A couple of months ago, Copyright Chronicle covered the 3 cases (UMG Recordings v. Augusto, Vernor v. Autodesk, Inc., and MDY Indus. v. Blizzard Entertainment) involving the first sale defense heard in Seattle by the Ninth Circuit in our First Sale Frenzy: Battles in Seattle series of posts.
The first decision has been made in the Ninth Circuit in the Vernor v. Autodesk case.
Procedural History/Summary: Vernor sold copies of Autodesk’s software on eBay. Autodesk filed several DMCA takedown notices with eBay. After several notices, Vernor’s account was suspended. Vernor filed a declaratory judgment action against Autodesk.
Autodesk alleged that it had licensed its software to CTA. Part of the license included that when updates were provided to its customers, they were to destroy the previous versions. However, CTA sold Version 14 to Vernor.
Autodesk was able to trace the software available on eBay to CTA. Autodesk maintained activation codes and serial numbers to verify registrations of its software. Portions of Autodesk’s agreements with its customers include use restrictions associated with the software.
The district court granted Vernor summary judgment finding that Vernor did not infringe on Autodesk’s software because Vernor was protected by the first sale defense under Section 109 and the essential step defense. The primary issue and question in the case was whether the transaction between Autodesk and CTA was a license or a sale. The first sale under Section 109 and the essential step defense do not apply to licenses but only to sales. The district court found that the transaction between Autodesk and CTA was a sale and therefore, Vernor was free to sell Version 14 on eBay. Vernor v. Autodesk, Inc., 2009 U.S. Dist. LEXIS 90906, *42-44 (W.D. Wash. 2009).
The case was appealed to the Ninth Circuit. The Court found the following factors relevant to the inquiry of whether a transaction is a license or a sale: (1) whether the copyright owner specifies that the user has a license; (2) whether the copyright owner significantly restricts the user’s ability to transfer the software; (3) whether the copyright owner places restrictions on use by the user. The Court found that the district court erred in finding that a sale occurs when a transferee is entitled to keep the work. Because Autodesk did not require a return of its work, the district court found there was a sale. Vernor v. Autodesk, Inc., 2010 U.S. App. LEXIS 18957, *25-26 (9th Cir. Wash., Sept. 10, 2010).
The Ninth Circuit reversed and remanded, holding that a software user is a licensee where the copyright owner: (1) specifies that the user is granted a license; (2) significantly restricts that user’s right to transfer the work; and (3) imposes restrictions on use. As these criteria were met in the transaction between Autodesk and CTA, Vernor was in the same position as CTA and had no right to sell Autodesk’s software. (CTA has previously settled with Autodesk.)
There were several amici involved in the case who had indicated that there were significant policy considerations; however, the Court found its ruling based on its precedent and Congress was free to amend or modify the law based on policy considerations. Vernor at *37.
The first decision has been made in the Ninth Circuit in the Vernor v. Autodesk case.
Procedural History/Summary: Vernor sold copies of Autodesk’s software on eBay. Autodesk filed several DMCA takedown notices with eBay. After several notices, Vernor’s account was suspended. Vernor filed a declaratory judgment action against Autodesk.
Autodesk alleged that it had licensed its software to CTA. Part of the license included that when updates were provided to its customers, they were to destroy the previous versions. However, CTA sold Version 14 to Vernor.
Autodesk was able to trace the software available on eBay to CTA. Autodesk maintained activation codes and serial numbers to verify registrations of its software. Portions of Autodesk’s agreements with its customers include use restrictions associated with the software.
The district court granted Vernor summary judgment finding that Vernor did not infringe on Autodesk’s software because Vernor was protected by the first sale defense under Section 109 and the essential step defense. The primary issue and question in the case was whether the transaction between Autodesk and CTA was a license or a sale. The first sale under Section 109 and the essential step defense do not apply to licenses but only to sales. The district court found that the transaction between Autodesk and CTA was a sale and therefore, Vernor was free to sell Version 14 on eBay. Vernor v. Autodesk, Inc., 2009 U.S. Dist. LEXIS 90906, *42-44 (W.D. Wash. 2009).
The case was appealed to the Ninth Circuit. The Court found the following factors relevant to the inquiry of whether a transaction is a license or a sale: (1) whether the copyright owner specifies that the user has a license; (2) whether the copyright owner significantly restricts the user’s ability to transfer the software; (3) whether the copyright owner places restrictions on use by the user. The Court found that the district court erred in finding that a sale occurs when a transferee is entitled to keep the work. Because Autodesk did not require a return of its work, the district court found there was a sale. Vernor v. Autodesk, Inc., 2010 U.S. App. LEXIS 18957, *25-26 (9th Cir. Wash., Sept. 10, 2010).
The Ninth Circuit reversed and remanded, holding that a software user is a licensee where the copyright owner: (1) specifies that the user is granted a license; (2) significantly restricts that user’s right to transfer the work; and (3) imposes restrictions on use. As these criteria were met in the transaction between Autodesk and CTA, Vernor was in the same position as CTA and had no right to sell Autodesk’s software. (CTA has previously settled with Autodesk.)
There were several amici involved in the case who had indicated that there were significant policy considerations; however, the Court found its ruling based on its precedent and Congress was free to amend or modify the law based on policy considerations. Vernor at *37.
Thursday, June 17, 2010
BATTLES IN SEATTLE (Part 2 of 3)
Today is the second part of our three part series discussing the oral arguments in a trio of copyright cases presented to the Ninth Circuit on June 7, 2010.
Round 2 - Vernor v. Autodesk, Inc.
Autodesk holds the copyright in AutoCAD, a 3-D modeling software program that sells for approximately $4,000. AutoCAD is sold with a shrinkwrap license which prohibits, among other things, resale of the software. In addition, AutoCAD is sold in sealed boxes for a fixed price with no-recurring fees or expirations for use.
Craig Vernor purchased several copies of AutoCAD from an architecture firm and listed those copies on Ebay and ultimately sold two copies for approximately $400 per copy. Autodesk sent Ebay a takedown notice claiming copyright infringement. Vernor responded with a counter-notice stating that he was reselling legitimate software. As a result of additional complaints from Autodesk, Ebay suspended Vernor’s account for a month.
Vernor then filed a declaratory judgment lawsuit in Federal District Court seeking a holding that he did not infringe upon Autodesk’s copyright. The District Court held in Vernor’s favor, finding that his actions were protected by the first sale doctrine and that his resale of legitimate copies of AutoCAD did not infringe Autodesk’s copyright. Autodesk counter-claimed for copyright infringement and contributory copyright infringement
Autodesk argued that it retained ownership of the copy of the software by virtue of the license agreement, and that the copy was merely licensed and not owned by the original purchaser. Therefore, Autodesk products could not be resold to third parties because only an "owner of a copy" has rights under the first-sale doctrine, as codified 17 U.S.C. § 109(a). Vernor was thus infringing Autodesk's copyright and Autodesk was within their rights to block such sales. Autodesk further claimed that, because the CD was a mechanism for making a copy of the software, Vernor enabled his clients to make unlicensed copies of Autodesk software and Vernor was liable for contributory copyright infringement.
The District Court noted a conflict in the precedent. The Court noted that the transfer of software from Autodesk accompanied by a restrictive license under the MAI Sys. Corp. v. Peak Computer, Inc., 991 F.2d 511 (9th Cir. 1993), Triad Sys. Corp. v. Southeastern Express Co., 64 F.3d 1330 (9th Cir. 1994), and Wall Data, Inc., v. Los Angeles County Sheriff's Dept., 447 F.3d 769 (9th Cir. 2006) cases would not be a sale and the first-sale doctrine would not apply, and thus Vernor would not be permitted to redistribute the software. However, under United States v. Wise, 550 F.2d 1180 (9th Cir. 1977), Vernor would be protected under the first-sale doctrine because the transfer of copies of Autodesk's software implies a right of perpetual possession of the copy. Given the conflicting precedents, the court felt compelled to rely on the earliest precedent, Wise, and thus found in Vernor's favor.
The oral arguments in Vernor v. Autodesk, Inc. centered on whether or not the sale of a software CD was a sale or a license. Counsel for Vernor likened this situation to that of Bobbs-Merrill Co. v. Straus (the 1908 Supreme Court case where Bobbs-Merrill sued Macy’s for selling copies of a book for 89 cents when the book publisher printed a "license agreement" in the front flap of the book, stating that any book dealer who sold the book for less than one dollar would be liable for infringing the publisher's copyright. The Supreme Court ultimately ruled that merely labeling something a "license” does not make it a license, and that resellers could sell the book at 89 cents.). When a justice challenged this analogy, counsel for Vernor noted that Autodesk had no expectation of getting the CD back once it was sold, thus the realities of the transaction are inconsistent with Autodesk’s assertions that they retain ownership in the copy. Autodesk’s counsel, meanwhile, focused upon the impact on the software licensing system and the industry as a whole. Autodesk also noted that the significant restrictions, enumerated in the shrinkwrap license, attendant to the use of the AutoCAD software indicate that users are truly licensees, rather than “owners”. Autodesk’s attorney argued that it does own the individual copies of its software that users purchase, Autodesk just doesn’t have any interest in getting them back. (This statement in particular might prove troublesome for Autodesk).
Implications: If the District Court’s ruling in Vernor v. Autodesk is upheld it may harmonize the application of the first-sale doctrine by treating used copies of software like used books, music CDs, and movie DVDs. On the other hand, the foundation of the software industry’s business model may be damaged, requiring a restructuring of software sales going forward and potentially raising software prices.
Listen to the oral argument in its entirety here.
Stay tuned...The third and final round of our "Battles in Seattle" series takes place tomorrow!
Round 2 - Vernor v. Autodesk, Inc.
Autodesk holds the copyright in AutoCAD, a 3-D modeling software program that sells for approximately $4,000. AutoCAD is sold with a shrinkwrap license which prohibits, among other things, resale of the software. In addition, AutoCAD is sold in sealed boxes for a fixed price with no-recurring fees or expirations for use.
Craig Vernor purchased several copies of AutoCAD from an architecture firm and listed those copies on Ebay and ultimately sold two copies for approximately $400 per copy. Autodesk sent Ebay a takedown notice claiming copyright infringement. Vernor responded with a counter-notice stating that he was reselling legitimate software. As a result of additional complaints from Autodesk, Ebay suspended Vernor’s account for a month.
Vernor then filed a declaratory judgment lawsuit in Federal District Court seeking a holding that he did not infringe upon Autodesk’s copyright. The District Court held in Vernor’s favor, finding that his actions were protected by the first sale doctrine and that his resale of legitimate copies of AutoCAD did not infringe Autodesk’s copyright. Autodesk counter-claimed for copyright infringement and contributory copyright infringement
Autodesk argued that it retained ownership of the copy of the software by virtue of the license agreement, and that the copy was merely licensed and not owned by the original purchaser. Therefore, Autodesk products could not be resold to third parties because only an "owner of a copy" has rights under the first-sale doctrine, as codified 17 U.S.C. § 109(a). Vernor was thus infringing Autodesk's copyright and Autodesk was within their rights to block such sales. Autodesk further claimed that, because the CD was a mechanism for making a copy of the software, Vernor enabled his clients to make unlicensed copies of Autodesk software and Vernor was liable for contributory copyright infringement.
The District Court noted a conflict in the precedent. The Court noted that the transfer of software from Autodesk accompanied by a restrictive license under the MAI Sys. Corp. v. Peak Computer, Inc., 991 F.2d 511 (9th Cir. 1993), Triad Sys. Corp. v. Southeastern Express Co., 64 F.3d 1330 (9th Cir. 1994), and Wall Data, Inc., v. Los Angeles County Sheriff's Dept., 447 F.3d 769 (9th Cir. 2006) cases would not be a sale and the first-sale doctrine would not apply, and thus Vernor would not be permitted to redistribute the software. However, under United States v. Wise, 550 F.2d 1180 (9th Cir. 1977), Vernor would be protected under the first-sale doctrine because the transfer of copies of Autodesk's software implies a right of perpetual possession of the copy. Given the conflicting precedents, the court felt compelled to rely on the earliest precedent, Wise, and thus found in Vernor's favor.
The oral arguments in Vernor v. Autodesk, Inc. centered on whether or not the sale of a software CD was a sale or a license. Counsel for Vernor likened this situation to that of Bobbs-Merrill Co. v. Straus (the 1908 Supreme Court case where Bobbs-Merrill sued Macy’s for selling copies of a book for 89 cents when the book publisher printed a "license agreement" in the front flap of the book, stating that any book dealer who sold the book for less than one dollar would be liable for infringing the publisher's copyright. The Supreme Court ultimately ruled that merely labeling something a "license” does not make it a license, and that resellers could sell the book at 89 cents.). When a justice challenged this analogy, counsel for Vernor noted that Autodesk had no expectation of getting the CD back once it was sold, thus the realities of the transaction are inconsistent with Autodesk’s assertions that they retain ownership in the copy. Autodesk’s counsel, meanwhile, focused upon the impact on the software licensing system and the industry as a whole. Autodesk also noted that the significant restrictions, enumerated in the shrinkwrap license, attendant to the use of the AutoCAD software indicate that users are truly licensees, rather than “owners”. Autodesk’s attorney argued that it does own the individual copies of its software that users purchase, Autodesk just doesn’t have any interest in getting them back. (This statement in particular might prove troublesome for Autodesk).
Implications: If the District Court’s ruling in Vernor v. Autodesk is upheld it may harmonize the application of the first-sale doctrine by treating used copies of software like used books, music CDs, and movie DVDs. On the other hand, the foundation of the software industry’s business model may be damaged, requiring a restructuring of software sales going forward and potentially raising software prices.
Listen to the oral argument in its entirety here.
Stay tuned...The third and final round of our "Battles in Seattle" series takes place tomorrow!
Wednesday, June 16, 2010
BATTLES IN SEATTLE (Part 1 of 3)
In the copyright context, the determination of whether an individual or entity is a licensee rather than an owner of the copy can depend on the actions of the parties, despite contractual writings and notices. Whether an individual is an owner or a licensee can have an impact on the application of the copyright first sale doctrine.
On June 7, 2010, the Ninth Circuit panel sitting in Seattle, Washington heard oral arguments in UMG Recordings Inc. v. Augusto (a copyright first sale case about promotional sound recordings purchased at used music stores), Vernor v. Autodesk, Inc. (a copyright first sale case involving the sale of software on Ebay), and MDY Indus. v. Blizzard Entertainment (a copyright case related to software code in the computer game World of Warcraft).
With this trio of cases, the Ninth Circuit is presented with three different fact patterns. When considering these cases, the Court must determine, among other things, under what set of circumstances can a transaction be deemed a license and what constitutes a sale.
Copyright Chronicle will be covering each of these cases in a three part series over the next three days.
The parties are in their corners. Let’s get ready to RUMBLE!
Round 1 - UMG Recordings Inc. v. Augusto
On June 7, 2010, the Ninth Circuit panel sitting in Seattle, Washington heard oral arguments in UMG Recordings Inc. v. Augusto (a copyright first sale case about promotional sound recordings purchased at used music stores), Vernor v. Autodesk, Inc. (a copyright first sale case involving the sale of software on Ebay), and MDY Indus. v. Blizzard Entertainment (a copyright case related to software code in the computer game World of Warcraft).
With this trio of cases, the Ninth Circuit is presented with three different fact patterns. When considering these cases, the Court must determine, among other things, under what set of circumstances can a transaction be deemed a license and what constitutes a sale.
Copyright Chronicle will be covering each of these cases in a three part series over the next three days.
The parties are in their corners. Let’s get ready to RUMBLE!
Round 1 - UMG Recordings Inc. v. Augusto
Wednesday, May 12, 2010
Weekly Wednesday Wrapup - May 12, 2010
- FIRST SALE FRENZY: On June 7, 2010 the Ninth Circuit will hear appeals in UMG Recordings Inc. v. Augusto, a first sale case involving promotional sound recordings sold on Ebay; Vernor v. Autodesk, Inc., a first sale case involving software; and MDY Indus. V. Blizzard Entertainment, a first sale case involving software code in World of Warcraft video game.
- Google filed for declaratory judgment claiming DMCA protection claiming that Google timely removed and/or disabled links to Plaintiff’s DMCA takedown notice where Plaintiff, a record company alleged and filed a previous suit for contributory and vicarious copyright infringement when RapidShare links appeared in internet searches on Google and Microsoft search engines. Plaintiff previously contested that Google and Microsoft responded to the DMCA takedown letter. The case raises issues about responses to DMCA takedown notices as well as the boundaries of contributory and vicarious copyright infringement.
- In a case initially filed in the Southern District of New York and recently transferred to Central District of California, over 40 photographers, owners of photography copyrights and the organization that operates the San Diego Zoo are seeking more than $11 million in damages from the fast-food chain Taco Bell for copyright infringement.
Not one oral hearing on first sale doctrine but 3 – in the same day in the Ninth Circuit.
The Plaintiffs claim that 4 ecology-themed DVDs distributed along with Taco Bell’s “Kid’s Meal” menu items contained over 100 images that were used without authorization or compensation to the copyright owners. The subject images were licensed to SNAP TV Inc. by the wildlife-specialty stock photo agency Minden Pictures. The Complaint alleges that Minden has been unable to get SNAP TV to pay for its license and thus SNAP TV’s use of the images and by extension Taco Bell’s distribution of over 2 million DVDs containing these images constitutes copyright infringement.
Plaintiffs are seeking monetary damages as well as Taco Bell’s profits attributable to the alleged infringement. However, as the Complaint points out, these DVDs are promotional items which were distributed along with Taco Bell’s “Kid’s Meals” menu items. If the DVDs were given away for free, as is done with most Kid’s Meals at fast food chains, then there is not basis for computing profits attributable to their distribution—because there are none. Should they prevail upon their copyright claims, Plaintiffs may be better served by seeking statutory damages.
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