Remember when several courts held that the existence of copyrighted materials on the Internet cannot by itself justify an inference that an accused infringer accessed the copyrighted work? Many copyright attorneys remember these cases, but apparently a songwriter and his attorneys in North Carolina do not—or at least they thought they had more valid “access” evidence than the court held they did.
Songwriter Timothy Arnett alleged Alan Jackson infringed Arnett’s copyrighted composition “Remember Me,” claiming Jackson’s hit “Remember When” was an unauthorized derivative work based on Arnett’s song. To prove copyright infringement, a plaintiff must prove that he owns a copyrighted original work registered with the U.S. Copyright Office and that the infringer copied his work without authorization. To prove copying, a plaintiff can provide evidence of direct access to the work (“I handed him a CD at my showcase.”). In the absence of direct evidence, an inference can be made that the infringer had access to the work. (“My song was played on the radio in high rotation and charted in the top 20.”) Finally, a plaintiff could show that the two works are strikingly similar, i.e., the works are so similar that there is a huge probability of copying instead of independent creation. If the works are strikingly similar, there could an inference of copying.
Like many songwriters, Arnett just did not have enough valid evidence from which any inferences could be drawn that Alan Jackson copied his song. A possibility of access because the song is on a website or available on the Internet is simply not enough to state a claim for infringement. Further, public distribution is not enough without some evidence that the alleged infringer actually obtained a copy of or was exposed to the work. Considerable commercial success could be evidence of access, but several cases have held that selling thousands of copies is not, in and of itself, enough. Arnett did not show that his work was a commercial success or that he had sold enough copies for it to be reasonable to believe Jackson heard it. Further, simply showing that people who knew or might know Jackson had a copy of Arnett’s song is not enough. There has to be a close relationship between the intermediary and the infringer and that their dealings involved some overlap in the song. (e.g., a manager pitched the song to the artist) Just knowing the alleged infringer or having a business relationship cannot support an infringement claim.
Arnett also could not show the court that the two songs were strikingly similar, which similarity could result in an inference of copying. The best Arnett alleged was that the two songs were similar conceptually and had harmonic similarities. Instead, the court found that Arnett merely had recited the legal standard without alleging sufficient supporting facts. A credible, knowledge musicologist would be a key asset to establish striking similarity; however, it does not per se relieve a plaintiff of his burden to prove access (in the Fourth Circuit). Because Arnett could not allege access in a sufficiently plausible manner, his case was dismissed.
If you did not do it before, remember when this court ruled that a suspicion or some possibility is not enough to show that someone infringed your work. “But he had to have heard it” does not fly in federal court. Other courts have ruled in a manner similar to the North Carolina judge, so carefully consider whether you have an actionable infringement case before filing suit.
A Massachusetts cartoonist’s brilliant plan boomeranged. In 2011, Jayme Gordon sued Dreamworks Animation for copyright infringement, alleging that Dreamworks stole Gordon’s characters and story for their 2008 movie, Kung Fu Panda. (N.B. Kung Fu Panda is unrelated to DeSalvo Law Firm’s Kung Fu Kitty featured in our previous blogs.)
Gordon then entered into settlement negotiations with Dreamworks and demanded $12 million in damages. Dreamworks refused to settle, and the case continued for two more years. Dreamworks incurred some $3 million in attorney fees to defend itself in the action.
Upon further investigation, it was discovered that Gordon had some drawings and a story that were dissimilar to Kung Fu Panda, but that he altered them after he viewed the Kung Fu Panda movie trailer. It also was discovered that he had copied the drawings from a 1996 Lion King coloring book. Gordon first registered copyrights for these copied sketches (entitled Kung Fu Panda Power) in 2000, claiming he created them in 1992. Gordon then filed registrations again in 2008 after he altered his drawings to more closely resemble Dreamworks’ Kung Fu Panda. When he was questioned about it, he deleted files from his computer and lied under oath about his actions. Gordon had installed a program, “Permanent Eraser,” on his computer in order to hide the origin of his sketches. Gordon’s copyrights were filed in bad faith as he claimed authorship of works he had not created.
Instead of a big, fat payday, Gordon was convicted of wire fraud and perjury, and recently was sentenced to two years in prison and ordered to pay $3 million restitution to Dreamworks. The cybercrime unit of the U.S. Attorney’s Office in Boston charged Gordon with wire fraud because his attorneys had emailed his demands and discovery requests to Dreamworks across state lines in violation of federal law.
Everybody was Kung Fu fighting, and Gordon lost. He now has two years to heal his wounds, and it is going take some real effort to make enough license plates in prison to pay for Dreamworks’ legal fees. We sure hope our Kung Fu Kitty does not get involved in crimes like the fake Kung Fu Panda did.
To use an Oxford comma or not— that is the question. We asked you to “tune in next week” as we discuss cases that turn on the language used by the parties. Most people believe they can write down their agreement without bothering with a pesky lawyer, but when a dispute arises, they often learn how costly that initial “money-saving” step of writing one’s own contract can be. Even with attorneys involved, disputes arise when each party believes the contract means something different, despite each party reading the same words.
A recent court case involving a Maine dairy was decided based upon the lack of the serial (Oxford) comma in a sentence. Although the case is factually unrelated to entertainment or intellectual property law, it highlights the significance of proper contract drafting. The issue the Federal Court of Appeals in the First Circuit decided was whether the lower court had properly ruled in favor of the dairy, finding that the drivers were not eligible for overtime pay. The dairy delivery drivers argued they were entitled to overtime, while the dairy argued that the drivers were exempt from the law’s provisions, saving the dairy the cost.
The overtime law does not apply to:
The canning, processing, preserving, freezing, drying, marketing, storing, packing for shipment or distribution of: (1) Agricultural produce; (2) Meat and fish products; and (3) Perishable foods.
The disagreement stemmed from the language “packing for shipment or distribution of.” The drivers argued that they handled perishable foods, but they did not engage in packing them. Since the drivers fell outside the exemption, they submitted they were entitled to overtime pay. The dairy argued that the terms “packing for shipment” and “distribution” were two separate categories, and since the drivers distributed perishable foods, the drivers were exempt from overtime pay. The dilemma required federal court intervention.
The court carefully reviewed the statutory intent and construction. The bottom line is that the absence of the Oxford comma led the court to find there was an ambiguity and that both sides had a reasonable argument that needed to be reconsidered by the lower court. Before it returned the case, the appeals court engaged in a careful analysis that included not only the law, but grammar and those dreaded parts of speech some of us had to “diagram” in English class.
The dairy argued that Maine law specifically mentioned that no serial comma should be used before the last item in a series, a drafting convention as old as the wage and hour law itself. The drivers made a cogent argument about gerunds and non-gerund phrases (you know, those “ing” words you learned in English), arguing that “distribution” was not a gerund like “packing for shipment” and “packing for shipping and distribution” should be read as a single phrase. The dairy pointed out no conjunction precedes “packing” and the only conjunction in the exemption —“or”—appears before “distribution,” so “distribution” is intended to be a separate exempt category since it does not function as the object of a preposition like “packing for shipping” does. The appeals court set up the problem and then sent it back to the lower court for it to solve the grammatical dilemma based on the interpretation of Maine law.
Why are we talking about this issue? Language matters. A contracting party may choose not to consult with an attorney in order to save money or a client may bristle at the several “review and revise contract” time entries on their latest invoice from their attorneys, but there is a good reason attorneys spend time attempting to perfect language in all legal documents. In the case of the dairy, millions of dollars in overtime turned on the absence of a serial comma. Not only must we “mind our Ps & Qs,” we must watch our commas and semicolons.
Genericide sounds like some terrible act of violence (like patricide, homicide or genocide). It is not as horrific as these crime, but it can result in the devastating economic loss of a trademark if the mark’s owner does not police and protect its mark. A mark owner may lose rights to enforce protection of the mark if it becomes generic. “Genericide” is when a trademark becomes so commonly used that it becomes the generic name for certain types of goods or services. At one time, cellophane, x-ray, escalator, kerosene, and thermos were trademarks. Due to the common usage, the mark became the generically used word to the point that the mark lost its protection. What else do you call that endlessly circling set of stairs that moves people between floors in a building? It is much easier to say “escalator” than endlessly circling set of stairs.
Recently, the Ninth Circuit Court of Appeals had to decide if Google® had become generic. Two men bought over 750 domain names using “google” and another name, such as googledisney.com and googlebarackobama. Google® filed a cybersquatting complaint with the National Arbitration Forum that the men violated the Uniform Domain Name Dispute Resolution Policy because their domain names were confusingly similar to Google®. The Forum agreed and transferred the domain names to Google®. The men filed an action in Arizona District Court to cancel two Google® trademarks on the grounds that they had become generic because to google means the act of searching on the internet regardless of the search engine used. (Typically, one does not “Yahoo” a name or “Bing” a topic.)
The men argued that since “google” had become a verb, it had become generic as a matter of law. The district court disagreed, finding that the men failed to present sufficient evidence that the public understood that “google” is the generic name for an internet search engine. A trademark is intended to designate the origin of a product or service, and the quality of such product or service. The test for genericide is whether the primary significance of the term “google” in the minds of the consuming public is now the product and not the producer of the product. If the public understands a mark as describing “who” a product or service is or “where” it comes from, then the mark remains valid. On the other hand, if the public understands the mark as describing “what” the product or service is, the mark has become generic.
The men appealed, arguing that the court misapplied the “primary significance” test. They submitted that the use of “google” as a verb automatically made it generic, and that the mark could only serve as a source-identifying function if it was an adjective. The appellate court disagreed, finding that a mark is generic only when it becomes the generic name for the goods or services. (What else do you call a thermos or a laundromat?) The court found that the men’s semantics were not well-rooted in trademark law. For example, a mark could be a noun, which not only named the product but identified the source as well. When restaurant customers order a coke, does it mean any soda product or does it mean a Coca-Cola®? Without knowing what is in the customer’s mind, one cannot tell if the customer had a particular source in mind. The court found that the “coke” case demonstrated the flaw in the men’s “adjective only” argument in that it would be unnecessary to present evidence on the consumer’s thought process if a trademark only can be source-identifying if it is an adjective. The court acknowledged it is easier to prove an adjective is source-identifying, but that is not the end of the inquiry. One could say “I need a Band-Aid® brand bandage,” and it would be understood what bandage the person requested. If one says, “Please give me a band-aid,” further inquiry would be needed to determine if the person meant any brand would work or if she specifically wanted the Band-Aid® brand.
In the same manner, the court held that it was assumed that the public uses the verb “google” in the generic and indiscriminate sense (à la “coke” or “band-aid”), but that does not mean as a matter of law that the “primary significance test” would result in a finding of genericide. The men’s arguments failed because their evidence was based upon the use of “google” as a verb. The court held that the evidence did not show that there was no efficient alternative for “google.” Since the generic terms must supplant the name for the goods or services, the court found that the men failed to show that there is no way to describe “internet search engines” without calling them “googles.” Aren’t you glad now that you learned the parts of speech in English class? Tune in next week when we will discuss the case finding that the Oxford comma was necessary after all.
This week the Copyright Office announced the launch of an online database of decisions by the U.S. Copyright Office Review Board that hears final administrative appeals of the office’s refusal to register a copyright. The online records begin with decisions in April 2016.
Typically, a work is not considered registered for purposes of filing an infringement action until the U.S. Copyright Office actually registers the work. In some jurisdictions (e.g., 9th Circuit), an application with the proper fee and deposit copy is sufficient to allow the court to hear the infringement action. (See May 24, 2017 Blog – “Copyright Application or Registration – Courts Want to Know”) Once these “application” courts review the many cases in which a copyright application is denied, they may wish to reconsider their application versus registration position. For example, a work must be authored by a human. A registration in Jesus’s name can be refused for divinely inspired work allegedly authored by Jesus. But see, Penguin Books U.S.A., Inc. v. New Christian Church of Full Endeavor, Ltd., 55 U.S.P.Q.2d 1680, 1686 (S.D.N.Y. 2000). (Divine origin notwithstanding, human beings put the work in a tangible, protectable form.) Had the applicant declined to name an author other than Jesus, the Copyright Office could refuse registration.
There are many reasons an application can be denied registration, such as the work lacks originality, it is an unauthorized derivative work, short musical phrases, procedures or methods are not protectable, insufficient choreography to warrant registration, not enough creative artwork to constitute two-dimensional artwork, and similar grounds for denying registration. If you want to learn more about how the U.S. Copyright Office assesses registrability, search the publicly available index here.
Freelance writer Robert Kaseberg knew he heard certain jokes before because he had written them. He contacted the Conan O’Brien show to let them know five jokes on the Conan show appeared on Kaseberg’s blog between late 2014 and mid-2015, and asked if he could submit jokes to Conan as a freelance writer. Kaseberg first was ignored and then berated by a Conan writer as a “no-name failure” with a “pathetic blog.” A copyright infringement action followed.
Conan sought a summary judgment on the grounds that Kaseberg did not produce valid copyright registrations for two jokes, that Conan writers wrote two jokes before Kaseberg posted his jokes to his blog, that the Conan crew did not have access to Kaseberg’s jokes, that because Kaseberg’s jokes were entitled only to “thin copyright protection,” he could not show that the jokes are virtually identical, and that the Conan crew independently created their own jokes.
The court found that Kaseberg’s failure to timely produce the copyright registrations (or applications) was harmless in that Conan’s crew could reopen discovery to neutralize any potential harm from not receiving the documents earlier. Next, the court found two Conan jokes were submitted before Kaseberg posted his very similar jokes to his blog. The court then decided whether a jury could hear the issue of Conan’s access to the jokes and the substantial similarity between the jokes. The court looked to determine if there was a genuine issue of material fact as to whether the Conan crew had reasonable possibility of viewing Kaseberg’s works. The court found the probability of independent creation during the specific time period to be very slim, with less than a 1% chance of independent creation. Also, because Kaseberg tweeted the Conan writers to tell them Conan was using Kaseberg’s jokes and because a writer told Kaseberg he had been to the blog and saw the jokes, the court found there were disputed factual issues sufficient for a jury to decide. Yes, they were two-line, current event jokes, but there were five alleged close-in-time infringements of which Kaseberg had given notice. Based on all the disputed facts, summary judgment was not appropriate on the issue of access.
Next, the court decided that Kaseberg’s jokes were only entitled to “thin copyright protection.” If a work is comprised of largely unprotectable elements, it is not entitled to the broad scope of protection. In other words, when the protectable expression is narrow, then the standard for copying is that the two works must be virtually identical to claim infringement. Because there were a limited number of variations in the punchlines that would be funny as applied to the facts in the preceding sentence, and also have widespread appeal, Kaseberg’s two-line jokes only had “thin” protection. Using that standard, the court then decided that the protectable elements of three of the five jokes were virtually identical (with one joke having been created before Kaseberg’s was published on his blog).
It will be up to a jury to decide if the Conan crew infringed Kaseberg’s jokes. They will hear the one about the Washington Monument’s 10-foot shrinkage due to winter weather, Tom Brady giving his Super Bowl MVP truck to the guy who won the Super Bowl for the Patriots (Seattle Seahawks’ coach, Peter Carroll), streets being renamed due to Bruce Jenner’s sex change (Cul-de-Sackless), and UAB shutting down its football program causing the Oakland Raiders’ surprise that it could be done. (“Wait, you can do that?") By the time a trial occurs and the money is spent on experts and attorneys, no one will think these jokes are funny anymore.
There is a split of authority in federal courts across the U.S. about when a copyright registration is actually registered. One would think the answer is obvious, but it seems courts and the lawyers arguing the cases seem to disagree as to when the “registration” occurs. Is it when each of the elements of registration is filed with the U.S. Copyright Office? Is it the effective date when the U.S. Copyright Office registers the copyright?
Since “registration” is required before filing a copyright infringement suit, the answer to this question is quite important. The U.S. Supreme Court already has determined that a registration is not a jurisdictional requirement (as some courts once held) because federal courts have subject matter jurisdiction over copyright matters whether or not a registration is made before an infringement suit is filed. To register a work, an applicant must submit the application, the proper filing fee, and the proper deposit copies. The Eleventh Circuit Court of Appeals in Atlanta, Georgia recently weighed in on the issue of whether the application is sufficient, and enumerated the varying manners in which other circuits decided cases. Some circuits hold that registration is complete upon application, and other courts hold that it is complete when the Register of Copyright approves the application.
The appellate court reasoned that registration occurs when the Register of Copyright approves the application since that is what the language of the Copyright Act states. A registration has not been made in accordance with the Copyright Act until “the Register …register[s] the claim.” 17 U.S.C. § 410(a). In reading the statute, the court found that the Register must examine the application, and if the deposited materials meet the requirements of copyrightable subject matter (original expression with a slight modicum of creativity) and if the other legal and formal requirements have been met (completed application, filing fee and deposit copies), the work then can be registered. It is not until the Register makes this determination that a work is considered registered. If it does not meet the requirements, it is merely an application.
Why would a court hold otherwise if the language is so clear? The “application approach” rests upon statutory language, providing that a copyright owner may obtain registration by delivering to the Copyright Office the application, the deposit copies, and the fee. The appeals court found that this statute only describes what the copyright owner must do to apply for a copyright, but that registration requires action by both the copyright owner and the U.S. Copyright Office. The second statutory step obligates the Register to complete the examination and approve the application before the work is considered registered. The appellate court upheld the dismissal of the complaint by the lower court on the grounds that the plaintiff (the party filing suit) alleged that it merely applied for registration, but failed to allege that a registered work had been infringed. Since a registration is a pre-condition to filing an infringement suit, the case was dismissed because the allegedly infringed work had not been registered.
Due to the split of authority on the application versus registration issue, it seems inevitable that the U.S. Supreme Court will have to decide the issue, absent legislative action by Congress.
No divorce is without intrigue, especially when spouses become suspicious of each other. The extent to which spouses will misbehave can be both entertaining and occasionally illegal. Most divorce lawyers have advised their clients at some point to avoid violating the wiretap laws, yet many potential divorcers insist on doing so, and have even ventured so far as to install computer software to intercept their spouses’ electronic communications. Can such use violate the federal wiretap law? You bet it can. But can the manufacturer of the secret spying software violate federal wiretap law?
In Luis v. Zang, the Sixth Circuit Court of Appeals answered this issue in the affirmative. Florida resident Joseph Zang became suspicious of his wife and decided to purchase and install Awareness Technologies’ program WebWatcher on the family computer. WebWatcher was purportedly designed to secretly capture electronic communications on a computer “in near-real time” and transmit these communications to a user account on WebWatcher’s servers. Zang hit pay dirt when WebWatcher revealed Mrs. Zang was having online relations with Ohio resident Javier Luis, and Zang used these stored communications to secure a favorable outcome in a subsequent divorce.
Luis sued Zang and Awareness in federal court, alleging violations of the federal Wiretap Act. Zang settled with Luis, but Awareness filed a motion to dismiss, arguing it could not have violated the Wiretap Act because Zang, not Awareness, initiated the wiretapping. The district court agreed and dismissed the case. Luis appealed. The Court of Appeals reversed, returning the case to the lower court for trial.
The federal Wiretap Act renders civil liability where someone intercepts, discloses or intentionally uses a third-party’s wire, oral, or electronic communications. Interception requires that the acquisition occur contemporaneously with the transmission of the communication, i.e. catching the communication “in flight before the communication comes to rest and ceases to be a communication.” The Act also renders additional liability where someone intentionally “manufactures, assembles, possesses or sells any electronic, mechanical, or other device, knowing or having reason to know that the design of such device renders it primarily useful for the purpose of the surreptitious interception of wire, oral, or electronic communication.” Under this second mode of liability, the court stated a manufacturer/possessor must play an active role in the use of the device to intercept the electronic communications.
The court found Awareness potentially liable under either theory, emphasizing three critical parts of Luis’s allegations: 1) Awareness specifically targeted the software to spousal spies, 2) Awareness captured communications in “near-real time,” without any active input from the user, and 3) Awareness immediately and specifically stored these communications on its own servers. Zang’s initiation of the interception did not extinguish Awareness’s intent and active involvement. Nor did this initiation exonerate Awareness from liability for manufacturing the software since Awareness ostensibly intended for WebWatcher customers to violate the Wiretap Act. The court found Luis’s allegations were sufficient to avoid an outright dismissal.
The Zang case is still in litigation, but it serves as a warning for software manufacturers: the intended audience and purpose can create liability.
One of the most exciting parts of practicing law is researching legislative history. Okay, it is really the most boring and frustrating part of practicing law. Legislators are notoriously vague and do not realize the impact of their polysemous lingo. Ascertaining a statute’s meaning frequently involves scrutinizing dozens of versions of the same statute, reading countless legislative commentaries, and/or poring through endless hearings replete with banter and political posturing. We attorneys brave the quagmire of rhetoric because the benefit to our clients can be very real.
Last week the Court of Appeals for the D.C. Circuit tackled an important ambiguity in the Digital Millennium Copyright Act. Passed by Congress in 1998, the DMCA contained a grandfather clause allowing digital music-only “preexisting subscription services” to use the pre-1998 license rate scheme. Muzak® LLC supplied digital music channels to Dish® Network using the pre-1998 scheme because the license rates were effectively lower. By 2012, a company named Mood Media® purchased both Muzak and Muzak’s competitor, DMX, which supplied digital music channels to DirecTV® under the higher post-1998 rates. During corporate restructuring, DMX transferred to Muzak its rights to transmit digital music to DirecTV. Muzak continued DMX’s digital music channels, but applied the lower pre-1998 license rate. SoundExchange, who collects digital performance royalties for artists, sued Muzak under the Copyright Act for failing to use the proper rates. The district court dismissed SoundExchange’s lawsuit against Muzak, holding Muzak’s acquisition of DMX’s transmission services were a “preexisting subscription service.” SoundExchange appealed.
The central issue on appeal was the meaning of the word “services.” Was the business entity Muzak a “service” or was Muzak’s program a “service?” The court first looked at the entire Copyright Act and found the Act to be “dreadfully ambiguous.” Some provisions speak of services filing petitions and submitting licenses to judges (the business entity Muzak), whereas others refer to services being provided pursuant to a license (Muzak’s program). Finding little help from the Act, the court turned to the legislative history and found it “no more pellucid,” as some parts of the history used “service” as both an entity and a program. The court tried one more source of guidance, the Register of Copyrights, who is statutorily allowed to author opinions which appellate courts may consider. Unfortunately, the Register visited the issue but did not resolve it, offering only that the grandfather clause should be narrowly interpreted.
In statutory construction, a pebble can cause an avalanche. The court wielded the Register’s mighty fragment of guidance to tip the scales in SoundExchange’s favor, reasoning that the new rate scheme was designed to “move the industry to market rates,” and Muzak could bypass Congress’s intent simply by acquiring multitudes of digital transmissions to any recipient. In narrowly construing the Act, the court declared the term “services” refers to both entities and programs. Dreadfully ambiguous for Muzak, indeed.
The adverse impact of the court’s decision on Muzak is sure to be substantial. Yet, Muzak’s loss arose mainly from Congress’s failure to artfully draft a statute. The Muzak case is a stark reminder that word choice and term definitions matter. Spending time and money to have a knowledgeable attorney scrutinize drafts of a statute or agreement is well worth the future cost of misinterpretation.
The only thing I liked better than the smell of Crayola® Crayons was the distinctive smell of PLAY DOH®. In fact, as a young adult, I believed all small, sweaty children actually smelled like one or the other. Can either of these smells be trademarked? On Valentine’s Day 2017, Hasbro obtained a “non-visual scent mark” for the distinctive PLAY DOH® smell. Even though I think it smells like children furiously playing with the modeling compound, your recall may more closely match Hasbro’s description of PLAY DOH® as “a unique scent formed through the combination of a sweet, slightly musky, vanilla-like fragrance, with slight overtones of cherry, and the natural smell of a salted, wheat-based dough.” I never thought to give PLAY DOH® a smell analysis equal to a high-end cologne or fine wine.
A trademark can be a word, slogan, symbol, design, color (think Owens Corning’s pink insulation), a sound (NBC chimes), a smell, a taste, or a combination thereof. A trademark can be anything that identifies the source of goods or services and distinguishes them from other goods or services. Unregistrable components of an otherwise proper mark include the generic term for the goods or services or matter that is merely descriptive but does not indicate source, or is primarily geographically descriptive. These unregistrable components must be disclaimed by the mark’s applicant, meaning no claim is made for the exclusive right to use the generic or descriptive components apart from the mark itself. How does one go about registering a trademark for a smell? The smell (or fragrance) cannot be one that arises naturally from the manufacturing process or all other manufacturers would be precluded from using such a process absent a license. PLAY DOH's® smell was registrable because it is the smell added to the modeling compound by the manufacturer, and it does not arise naturally in the process of making PLAY DOH.®
Could Hasbro register a banana or lemon smell for yellow PLAY DOH® or grape smell for purple PLAY DOH®? Hasbro could not unless PLAYDOH® had a different name for a mark associated with “flavors” of PLAY DOH® such as PLAY DOH SCENTS or PLAY DOH FOOD. Once the smell is registered in association with a particular mark, the smell cannot be changed for the duration of the mark’s life lest the owner lose trademark protection due to abandonment of the registered mark.
PLAY DOH® was first made in the 1950s in Cincinnati, Ohio by Rainbow Crafts Co. after it initially was used as wallpaper cleaner. Hasbro acquired it in 1991 but has not manufactured the modeling clay in the U.S. since 2004. Hasbro distributes over 100 million cans of PLAY DOH® per year, but it is manufactured by Chinese and Turkish factories. Hasbro is expected to return manufacturing to the U.S. in 2018 due to increased sales worldwide. It seems everyone globally loves a whiff of PLAY DOH®—likely because it reminds her of a time she was a small, sweaty child imagining the monsters, animals, or castles to be made from the moldable mixture of water, salt, flour, and a few secret ingredients that give it the trademark smell.
A recent decision from the 9th Circuit Court of Appeals illustrates how testing the boundaries of the DMCA can be risky. Social media platform LiveJournal hosts a celebrity gossip page called “Oh No They Didn’t!” ONTD posts user-submitted celebrity gossip and pictures. These submissions are screened by a team of volunteer moderators, led by a LiveJournal employee, who has significant discretion over whether a submission is posted.
Mavrix Photographs specializes in “candid photographs of celebrities in tropical locations.” Mavrix sued LiveJournal for posting 20 of Mavrix’s pictures on ONTD without permission. LiveJournal claimed protection under the DMCA’s safe harbor provision, and the district court agreed. On appeal, the court reversed, holding LiveJournal is only protected by the DMCA if the moderators are considered “users.”
The DMCA provides liability protection for online service providers whose content is posted at users’ direction. As service providers become more involved with the content of posts, they potentially expose themselves to liability if the content is infringing. Service provider involvement may include controlling or altering user submissions by moderators. Thus, content moderators are analyzed under traditional rules of agency to determine if the service provider is liable. Agency occurs when the principal allows an agent to voluntarily act on the principal’s behalf and under the principal’s control.
Since LiveJournal hired an employee to lead the team of volunteer moderators and control the posting of user submissions, the court held that a jury could find that LiveJournal’s moderators were agents acting on behalf of their principal rather than merely being LiveJournal users. The case was reversed and sent back to the trial court. However,in another case, the 10th Circuit Court of Appeals applied agency rules, but arrived at a different conclusion where a site used independent contractors to author the site’s content. The two cases are similar and are distinguished mainly by the contract language used.
Resolving this critical designation is ultimately for the trier of fact to decide. The outcome of this case remains uncertain as a trial has not, and may not, occur. Nevertheless, providers who wish to screen user submissions prior to posting—even to exclude offensive content—may want to revisit whether their conduct complies with the DMCA’s safe harbor requirements.
Trademark and First Amendment fanatics eagerly await the Supreme Court’s ruling in a case where political speech clashes with government trademark restrictions. Simon Shiao Tam, leader of the Asian-American rock band The Slants, attempted to register a federal trademark using “The Slants.” The USPTO rejected the trademark under the anti-disparagement section of the Lanham Act, because the term “slant” is widely understood as a derogatory term for people of Asian descent. In trademark law, a disparaging mark is one which “dishonors by comparison with what is inferior, slights, deprecates, degrades, or affects or injures by unjust comparison.”
Tam appealed the rejection, arguing the mark was protected political speech: the band’s lyrics tackle cultural and political issues, and his use of “The Slants” attempted to recapture the term and remove its derogatory meaning. The U.S. Court of Appeals for the Federal Circuit initially ruled against Tam, but in a full panel rehearing, the court reversed itself, holding the anti-disparagement section violates the First Amendment.1 The USPTO appealed.
The U.S. Supreme Court heard oral argument on January 18, 2017. A decision is expected by June 2017, the end of the Court’s current term. Unfortunately for The Slants, they are without a registered trademark because the USPTO refused to register the mark until the Supreme Court rules.
No matter how it is resolved, In re Tam (now Lee v. Tam on appeal) will be a landmark case. Scores of trademark registrations have been rejected on disparagement grounds, including the Washington Redskins logo (that case is still on appeal).2 Should the Court rule in Tam’s favor, expect a wave of trademark registrations which would have been rejected on disparagement grounds. Otherwise, the Court must reconcile political speech in trademark law from prior First Amendment decisions.
In the meantime, The Slants are coming to Nashville! They will speak about In re Tam on April 14 at 4:00, at an event sponsored in part by DeSalvo Law Firm PLLC. The event will be held at the law firm Bradley, Arant, Boult and Cummings LLP at 1600 Division Street, Suite 700, Nashville, TN 37203. After their presentation, The Slants will perform their music. More details may be found in the announcement on our Facebook page.
1. For the complete, 110-page opinion with various dissenting opinions, see http://www.scotusblog.com/wp-content/uploads/2016/04/tam.pdf.↩
2. For examples of other marks rejected on disparagement grounds, see page nine of the Federal Circuit opinion listed in Footnote 1. Warning: they are disparaging.↩
Those of us blessed with the company of children know well the implausible, yet charming, excuses children make when they do something wrong. For example, when the teacher catches a child stealing his classmate’s ball, the child will claim “it wasn’t me” or “he did it!” We snicker at the adorably brazen deceit, knowing that children occasionally get away with malfeasance because the evidence is not…quite…there. Children’s ability to dodge culpability for lack of evidence also was shared by cyber-squatters in two cases from the World Intellectual Property Organization (“WIPO”) that illustrate a theme familiar to childish disputes: some excuses may help you escape trouble, but do not blame your misconduct on your dog.
Andretta v. Zecchetto: All the Typical Excuses
Mr. Andretta produced cycling apparel using his registered trademark “Giordana.” In 1999, Andretta entered into an agreement with Mr. Zecchetto, CEO of A.P.G. SRL, to sell Giordana clothing using the domain giordana.com that Zecchetto had registered. The parties played well together for 15 years and then parted ways. Zecchetto refused to give the giordana.com domain to Andretta, and redirected giordana.com to APG’s own website, apgcycling.com, that sells only APG cycling apparel. Andretta filed a complaint with WIPO alleging Zecchetto lacked a legitimate interest in the domain and damaged Andretta’s trademark usage by registering the domain in bad faith. Zecchetto immediately stopped the domain redirection upon receiving the complaint, but refused to transfer the domain to Andretta. Like many children’s disputes involving domain registration, the adult in the room, WIPO, suffered through the many excuses.
Zecchetto first shifted blame by arguing it was APG, not Zecchetto, who controlled the domain (“It wasn’t me!”). WIPO rejected this argument because multiple databases listed Zecchetto’s name as the “registrant name.” Zecchetto then argued he was authorized to use the domain by distribution agreements the parties signed in 2013 (“You said I could have your ball!”). WIPO rejected this argument because establishing legitimate interests in a domain under WIPO policy requires at least a bona fide offering of the targeted goods on the site and accurately disclose the registrant’s relationship with the trademark owner. APG offered no Giordana products on its site. Zecchetto next downplayed his halting of the domain redirection as part of an already existing business plan (“I did not stop because I got caught; I stopped because I meant to”). WIPO found a legitimate interest in the domain name would not lead to the phasing out of the domain. Finally, Zecchetto challenged WIPO’s authority to resolve the dispute at all (“You’re not the boss of me!”), and that the dispute was contractual and was not clear abuse under WIPO rules (“We’re not fighting; we’re just playing!”).
Essentially, Andretta and Zecchetto became competitors and Zecchetto hijacked Andretta’s interest in what would likely be Andretta’s domain. Unfortunately for Andretta, a cybersquatting complaint under WIPO policy also requires a showing of bad faith. At the time of the domain renewal, APG had legitimate rights to the Giordana trademark under a distribution contract, and thus, APG did not renew the domain in bad faith, even if it currently lacked a legitimate interest in it. WIPO held that APG was not required to transfer the domain to Andretta. Score one for the cyber-squatter.
Wait! There’s More: The Dog Ate Your Domain
The Zecchetto case parallels the typical child dispute: one child infracts, the other child tells, the adult queries and receives a host of implausible excuses, and the evidence is often insufficient to convict—unless the child’s excuse for not returning his playmate’s ball is “my dog ate it.”
Three months after WIPO decided the case, Zecchetto transferred the giordana.com domain to Mr. Giubertoni. Giubertoni was a cyclist and member of the Alé Cycling Team, a competitive cycling team sponsored by APG and user of APG’s brand of cycling apparel, Alé. APG also employed Giubertoni’s wife, and his sister-in-law was APG’s General Manager.
Like a child hiding his recently stolen loot, Giubertoni quickly pointed the domain to a website dedicated to a dog named “Giordana.” The site contained a few images about the dog, general information about the Alano breed, and text regarding the website’s purpose.
Andretta filed a second complaint with WIPO, challenging Giubertoni’s legitimate interests in the domain and alleging bad faith in its registration. Giubertoni provided several explanations for why his site was not a ruse to degrade his sponsor’s competitor. His first excuse was that Andretta only trademarked the stylized characters of Giordana, not the word itself. (“The ball isn’t yours; it only looks like your ball.”) He then argued that the website was a non-commercial, fair use of the word “Giordana” because the site provides information about the Alano breed (“I didn’t take your ball; I used it to study.”), and because he did not try to sell anything on the site (“Why would I take your ball?”). To complete his set of excuses, Giubertoni argued the website does not disrupt business in Giordana apparel, and did not tarnish the Giordana brand because of the “nice feeling” a dog engenders (“I didn’t take your ball. I presented it to the world to make everyone happier.”).
These excuses may have been plausible, but WIPO found that Giubertoni provided no evidence that this dog was named (or had always been named) Giordana, or that Giubertoni actually owned the dog. Giubertoni’s sole evidence of the dog’s ownership was a picture of the dog lying next to copies of Andretta’s complaint. (Nice touch!) WIPO held that Giubertoni acted in bad faith because his domain registration occurred contemporaneously with his economic ties to APG, the mark’s acquisition from Zecchetto, and Giubertoni’s admitted knowledge of the Giordana trademark, in existence long before the birth of the canine Giordana. WIPO ordered the domain transferred to Andretta, proving once again that the “dog ate my homework” excuse never, ever works.
Never underestimate the power of a footnote. After all, who could forget such memorable U.S. Supreme Court footnotes as “see generally”1 and “Id.”2? But in landmark cases like Star Athletica, LLC v. Varsity Brands, Inc., recently decided by the Supreme Court, neglected footnotes can contain hidden and valuable treasures.
Varsity Brands makes and sells cheerleader uniforms with features such as colors, lines and chevrons (see above for samples from this case). Varsity copyrighted the uniforms by registering drawings of the uniforms’ designs with the Copyright Office. When Varsity discovered that Star Athletica's cheerleader uniforms contained similar features, Varsity sued Star for copyright infringement.
The Supreme Court was tasked with deciding how the Copyright Act delineates form and function. In general, copyright protection does not extend to functional components of a device. The switch on a lamp, for example, is entirely functional and would not be considered a copyrightable work of art.3 But the Copyright Act does grant copyright eligibility to artistic features of a device if they can be perceived as separate works of art protectable on their own.4 The challenge lies in how to decide when a feature is a work of art or whether it is a functional component. The Court answered this conundrum with the following scientific formula as to copyright eligibility: 1) find in the article some two- or three-dimensional elements with pictorial, graphic or sculptural qualities, and 2) determine if they could stand alone (or on another medium) as a picture, graphic or sculpture.5
If the simplicity of that formula seems complicated to you, you are not alone, and your initial reaction to its broad scope may have been similar to mine: can I now sue anyone who copies my toga at toga parties? Will my shovel manufacturer sue me because my dirty shovel is an unauthorized derivative work? Has Kung Fu Kitty created a monopoly with his line of solid tangerine ping-pong martial arts dental floss? Oh, the copyright troll-manity!
The possibilities seem endless, but buried deep within the Court's opinion lies Footnote 1, the marrow of the Court's opinion. “We do not today hold that the surface decorations are copyrightable. We express no opinion on whether these works are sufficiently original to qualify for copyright protection.” Allow me to unwind your now-twisted brain. An artistic feature may be able to stand on its own as a work of art, but like all copyright-eligible works, originality6 is still a pre-requisite to copyright protection. In other words, Varsity’s uniforms are eligible to be considered for copyright protection, but Varsity has yet to overcome the originality hurdle.7 So you may rest easy about your dirty shovel; however, your toga will not help you retire early (and Kung Fu Kitty has not decimated the orange-floss dreams of the world’s dental floss makers).
The Star Athletica case may have far reaching ramifications. Clothing has traditionally been excluded from copyright protection because of its strong utility. While Varsity appears to have won this battle, one wonders whether the simplicity of Varsity’s designs and the Court’s ruling and powerful footnote might expose Varsity to liability for pre-existing patterns in use by other apparel manufacturers. One prediction appears certain: expect a great deal of apparel-related copyright litigation down the road.
1. California v. Carney 471 U.S. 386, 399 n. 9 (1985)↩
3. Although a perfectly working donut is a work of art, am I right?↩
4. The most famous example is a statuette of a male and female dancing, made specifically for use in lamps. The statuette was copyrightable because, on its own, it was a sculpture regardless of its utilitarian function.↩
5. The Court further noted that 1) the subjective purpose of the feature does not change the test, 2) the fact that the artistic feature conformed to a cheerleader uniform outline is irrelevant, as many works of art conform to their media, and 3) the fact that the artistic feature advanced the utilitarian function (or was even critical to the function) is not relevant as to whether it is a copyrightable work of art.↩
6. Do not confuse originality with novelty. Novelty is for patent folk. Copyright requires only a minimal degree of creativity.↩
7. The trial court found in favor of Star Athletica without ruling on the originality of Varsity’s designs.↩
A recent ruling by the Trademark Trial and Appeal Board (TTAB) reminds us that brand protection can be multi-lingual. Big Heart Wine LLC launched a wine called “100 Percent” and attempted to register the name as a trademark. The U.S. Patent and Trademark Office rejected the trademark because of its similarity to another wine called “Cento Per Cento” which, in Italian, translates to “100 Percent.” On appeal, the TTAB upheld the rejection based in part on the doctrine of foreign equivalents.
The trademark law doctrine of foreign equivalents translates foreign words from common languages into English and compares this translation to the trademark being sought. The doctrine is triggered when it appears that an ordinary American buyer would “stop and translate” the foreign word into its English counterpart. As with all trademark law, the doctrine’s goal is to avoid confusingly similar marks in the market.
Before you log into Amazon® and order 7,099 “For Dummies” books on languages,1 note the doctrine applies to words from common and modern languages used by the ordinary American purchaser who is knowledgeable in the language. Languages like Spanish, Italian and Russian have traditionally been deemed “common” under the doctrine. Trademark searches in 5th Century Aramaic or Bumthangkha2 are probably unnecessary.
Should last week’s Kung Fu Kitty learn Chinese to protect his line of ping-pong-martial-arts-wear? Well, that depends. The doctrine of foreign equivalents does not definitively establish confusing similarity under trademark law. Like traditional trademark analysis, the doctrine is merely a factor. Other factors include the strength of the existing mark and the differences in the goods being analyzed. If Kung Fu Kitty discovered a trademarked tax accountant company named Gōngfu Xiǎo Māo3 (GXM), he might successfully argue that an ordinary American would not confuse his Ping Pong Kung Fu action socks with GXM’s itemized deductions service. On the other hand, his “Prepare to Pay” tax calculator might be confused with GXM because they are similar services.
1. As of this writing, Ethnologue reports there being 7,099 languages worldwide. https://www.ethnologue.com/↩
2. I had to Google® it too.↩
3. Translation credit to Google® Translate↩
You videotaped your favorite pet and posted the video on your website (you know, the video where your cat stands on its hind legs, plays ping pong with a Chinese Master, and after his victory engages in a Kung Fu battle? We’ve all done this.) This was no ordinary feline Kung Fu clip. You spent hours applying dramatic slow-motion effects. You painstakingly edited the video for maximum Kung Fu impact. You even performed your own Kung Fu voiceovers and intentionally kept them out of sync with the visuals to make the movie authentic. It was a cinematic masterpiece created by the artistic genius living in your head. Now someone has stolen the video, posted it on YouTube®, and is reaping benefit from the video having gone viral. How do you put a stop to this villain?
Enter the Dragon, er, the “takedown notice.” Under the Digital Millennium Copyright Act (the “DMCA”), online service providers who allow third-party users to upload content can be held liable if their users commit copyright infringement. The DMCA’s safe harbor provision shields service providers from this potential liability provided certain conditions are met. A copyright holder (your video is copyrighted even if you did not register it with the U.S. Copyright Office) can notify service providers of potential copyright infringement on their site and demand its removal. This takedown notice must be sent to the provider’s “designated agent” for copyright infringement notices. If the provider fails to comply with a properly worded takedown notice, the provider may be liable for the alleged copyright infringement.
Do not waste time tediously searching the web for this agent, Grasshopper, for there is an easier way. As of December 2016 the DMCA requires service providers to electronically register their designated agents with the Copyright Office. Even if the provider previously registered via paper, all providers have until December 31, 2017 to register electronically or risk losing liability protection. The Copyright Office stores these designated agents in an online searchable database.
Whether an online presence qualifies its owner or operator as a service provider under the DMCA’s safe harbor rule is debatable. A “service provider” is a “provider of online services or network access, or the operator of facilities therefor.” While this definition appears broad, consider that the rule shields providers from infringement based on third-party transactions. Service providers include “conduit services,” meaning the provider merely passes along a third-party transaction without any storage or involvement in the content. Recent cases also include more involved services like YouTube®, Amazon®, PhotoBucket® and other websites allowing digital uploads for display. The shield does not apply to service providers or users who directly infringe copyrights by their own conduct, like our Kung Fu Kitty video thief.
More information on designated agents as well as how to search for them may be found at the Copyright Office's designated agent directory.
A new year and new laws abound. For businesses with online reviews and for all the social media warriors who share their opinions online, this new law may be of interest. The Consumer Review Fairness Act of 2016 was enacted in December 2016. The law prohibits the use of certain clauses in form contracts that restrict the consumer’s ability to communicate about the goods and services offered in interstate commerce that were the subject of the contract and for other purposes. What does that mean to you? If you want to write a review on Yelp, the business cannot include language in a form contract (such as a user agreement) that prohibits you from leaving a bona fide negative review or comments about the product or service online. The act takes effect on March 14, 2017, 90-days after it was signed by the President.
Since online reviews became accessible, consumers have felt free to unleash their opinions about the rotten service, terrible food, or poor warranty service they obtained from a business. While many are genuine complaints, some comments or reviews are done maliciously and unfairly to damage a business. As we all know, once it is online, it is almost irretrievable and the damage to the business is done. To protect themselves, some businesses inserted clauses into the contracts and/or online user agreements that prohibited the consumer from complaining online. If the consumer complained, he or she could be sued. Often, these clauses would have a liquidated damages and/or attorney’s fees provision. If the contract was violated, the business would be entitled to recover an identified sum of money and their attorney fees because the consumer was forced to agree to these terms before obtaining the service or product.
This 2016 law prevents a business from (a) including a blanket prohibition against genuine negative reviews, (b) imposing a penalty for such genuine negative comments, and (c) requiring a consumer to assign its copyright in the review/comments to the business. A consumer’s right to gripe is not unlimited. If a consumer chooses to say inappropriate things about a business to get revenge for perceived mistreatment or for a poor product, the business retains its civil remedies for libel (if in print), slander (if spoken), or other civil wrongs such as intentional interference with business relations. A website still may remove or not post abusive, obscene, or vulgar content, including harassing comments (such as repeated negative comments). Businesses retain the right to have such a provision in their contracts if the parties negotiated the contract. It just cannot be a form contract for which the consumer has no meaningful right to negotiate the terms.
The Consumer Review Fairness Act will be enforced by the Federal Trade Commission and also by state attorneys general on behalf of the citizens of their respective states.
Remember seeing the Christmas classic “It’s a Wonderful Life” run non-stop over the Christmas holidays? Watching guardian angel (second class) Clarence teaching George Bailey about the true value of his life is as much a part of the Christmas season as Santa, chestnuts roasting on an open fire, and snowmen. Much like George Bailey had a renewed life after his encounter with Clarence, the copyright in “It’s a Wonderful Life” also had a renewal of sorts as well.
“It’s a Wonderful Life” became a classic because the film’s copyright had fallen into the public domain due to a clerical error (or so the story goes). The copyright in the film was not timely renewed in 1974 after the end of the first 28-year term, and thus, was publicly available for anyone to use. Once in the public domain, television aired the film as often as possible because there were no royalties required to be paid. We all got to love this movie over the years because of its great over-exposure; however, the movie did not meet with box office success when it was first released in 1946. Jimmy Stewart (“George Bailey”) had just returned from flying combat missions in WWII in the U.S. Air Force. (Actor Stewart rose to the rank of Brigadier General in the U.S. Air Force Reserve, returning from the war a rather different man than the young actor who left to fight.) The first film he made upon his return was “It’s a Wonderful Life.” Disappointed when the film was not a box office success, Stewart did not care for the movie. He and the director, Frank Capra, never worked together again.
Much like George Bailey got a new lease on life, the copyright received a new life after the U.S. Supreme Court rendered a 1990 decision in Stewart v. Abend, concerning the movie, “Rear Window,” starring James Stewart. That case involved the renewal term to the copyright in a derivative work (the film) based upon the copyrighted story “It had to Murder.” As a result of that case, Republic Pictures, the owner to the copyright in the film “It’s a Wonderful Life” reviewed what rights it had acquired when it first made the movie. The movie was based upon a short story, “The Greatest Gift” by Philip Van Doren Stern. What Republic discovered was that it still owned the copyright in the story. Republic also acquired the rights to all of the music in the movie. Since Republic’s movie (which is in the public domain) cannot be shown without the copyrighted story and the music, “George Bailey” was back in business. Republic then entered into license agreements for the music and story, thus limiting the film’s TV showings due to the royalties now required to be paid. Even though the movie is shown less often during the holidays, “George” is making money again on the copyright, and your DVR will offer it as many times as you want to watch it. By the way, once the film became a classic, Mr. Stewart is reported to say that “It’s a Wonderful Life” was one of his favorite movies. It is mine, too, George Bailey. I am still happy that Clarence got his wings!
Most IP attorneys will hear from their trademark clients about a letter the client received, asking the trademark owner to pay fees for registering the trademark or to pay an annual renewal fee for the trademark. The letters “look official” and often begin arriving shortly after the client has applied for a trademark registration and already paid the fee to the U.S. Patent and Trademark Office. Since the letter looks like a communication from the trademark office, the client mistakenly may believe it is obligated to pay the fee to properly register or complete registration of the mark. The “registry” the letter refers to is not an official trademark registry, and of course, the payment goes to the person running the scam. Other illegitimate letters appear to be a trademark office invoice requesting payment of the annual fee to keep the mark current. There are no annual fees required by the U.S.P.T.O., but a payment to the scam company may result in the client inadvertently entering into a long-term agreement for some unwanted services not required under law.
If you have registered a trademark, be wary of any such unofficial, scam correspondence related to your mark, particularly the ones that offer you a special prize for responding quickly. If you have had an attorney register your mark, the attorney will communicate with you since the attorney is typically listed as the correspondent with the U.S.P.T.O. If any communication is sent by the U.S.P.T.O, it will be sent to your attorney, who, in turn, will contact you. Statements or letters from third parties related to your trademark generally are a scam or a trick to get you to enter into a service contract. Beware! Do not pay these companies or give them any of your personal information.
An Alabama district court recently provided some clarity on works for hire in the employment setting. In 2007, Michael Mohr developed an efficient system to manually input to an Excel spreadsheet the parts of Apache helicopters removed during the “depopulation” process. Depopulation is where an aircraft is taken apart and the parts are either recycled or scrapped. In 2008, while working at DynCorp, Mohr and a co-worker developed a web-based computer program to help automate the process of tracking and labeling the depopulation process even more efficiently. In January 2010, Mohr began working for defendants, Science and Engineering Services, Inc. (SES).
Mohr registered a copyright in his name for the 2010 program and granted SES a license to use it. Later, Mohr believed SES exceeded the scope of the license and sued SES for copyright infringement. The parties filed cross-motions on Mohr’s infringement claims. The district court held that the program was a work for hire and that DynCorp, Mohr’s employer at the time of the program’s creation, was the author under the Copyright Act, rather than Mohr. Since ownership is an essential element to prove infringement, the court granted SES’s motion as Mohr could not prevail.
An accused infringer may assert “work for hire” as an affirmative defense with the burden of proving that the work is owned by the employer and not the party asserting he created the work. There are two types of authors recognized under the Copyright Act: creative authors and economic authors. An employer or other person for whom the work was prepared may be considered the author unless there is a signed agreement expressly stating otherwise. One type of work for hire is a work prepared by an employee within the scope of employment. An employee acts within the scope of employment if his conduct (1) is of the kind he is employed to perform; (2) occurs substantially within the authorized time and space limits; (3) is actuated, at least in part, by a purpose to serve the employer; and (4) is assigned by the employer or the employee is engaging in a course of conduct subject to the employer’s control.
The district court determined that Mohr’s work on the protected program at DynCorp was within the scope of his employment. Mohr was a computer programmer once lauded by DynCorp for the ability to be “given the end product desire[d] and he [would] design a program to do it.” DynCorp’s military clients did not have to hire a programmer because Mohr performed all such work. Mohr testified that working on the program was one of the things he did for DynCorp. He shared an office with the program’s co-creator where they coordinated efforts in the program’s development. Mohr worked on the program at the office and his home and the co-creator only worked on it at the office. The program was created using DynCorp servers and a new computer provided by DynCorp with sufficient memory to run the program. Mohr consulted with DynCorp personnel and tailored his work to DynCorp’s needs. DynCorp controlled the work he was doing, and Mohr confirmed by email that DynCorp’s requested changes had been made. Finally, Mohr’s employment agreement stated Mohr would assign any ideas, discoveries, inventions, developments or improvements conceived or made during his employment to DynCorp relating to the company’s business, development programs or contemplated interests.
The factors weighed in favor of the program being a work for hire. The district court’s well-reasoned decision provides clear guidance regarding a work for hire in an employment setting.
A California federal appeals court recently reversed a lower court’s decision that Live Nation Merchandise could not be held liable for willfully infringing photographs of Run-DMC taken by photographer Glen Friedman. The appeals court upheld the manner in which the district court determined the number of statutory damage awards for which Live Nation would be jointly and severally liable with the “downstream” infringers while reserving other fact issues for a jury.
Live Nation admittedly reproduced Friedman’s photographs on a calendar and on T-shirts without Friedman’s authorization. On appeal, Live Nation argued it infringed, but it did not do so willfully. Live Nation then submitted that Friedman failed to produce any direct evidence that it had removed the copyright management information (“CMI”) from the photographs before using them. Live Nation also argued that the 104 “downstream” infringers who copied the unauthorized photos from Live Nation could not subject Live Nation to 104 separate awards of statutory damages where they had not been joined as defendants in the action.
To find that infringement was willful, Friedman had to prove Live Nation intentionally infringed or recklessly disregarded Friedman’s rights. The appeals court reversed the lower court’s finding that Friedman produced no evidence of Live Nation’s intent or reckless disregard of his rights. To the contrary, the appeals court found a jury could draw the conclusion that Live Nation was willfully blind to Friedman’s ownership rights in that Live Nation’s product submission forms sought no information about copyright ownership and instead relied on the artists to clear rights before submitting merchandise to Live Nation to sell. Of particular importance was a Live Nation email after the infringement occurred (but before Friedman sued) specifically stating it did not want to use Friedman’s photos of Run-DMC because they were too expensive to license. While Live Nation said it was evidence that they intentionally avoided using Friedman’s photos, the court found a jury could reasonably conclude that there was a risk of using Friedman’s photos and Live Nation took no steps to avoid such use.
Next, the appeals court held a jury also could find that Live Nation distributed the photos with knowledge that copyright management information had been removed from them. It was not required that Friedman prove by direct evidence that Live Nation actually removed the CMI itself, but only that it knew the protection measures had been removed by someone. Circumstantial evidence is sufficient, and since Friedman presented enough evidence of the missing CMI, Live Nation was required to prove how it came to possess Friedman’s photos with the missing CMI. Reversing the lower court, the appellate court held that a determination of these disputed facts was properly left to a jury to decide.
The court then resolved a disputed interpretation of case law regarding the application of statutory damages to the number of works infringed. When parties jointly participate in infringing a work, the parties may be liable for one award of statutory damages for each work infringed. Statutory damages are available when a copyright owner cannot or it is too difficult to prove the amount of the infringer’s profits, if any. On the other hand, if five unrelated parties each infringe the same work, each party may be liable to the copyright owners for an award of statutory damages. Friedman argued that because 104 “downstream” infringers copied his photos from Live Nation, Live Nation was liable for 104 awards of statutory damages. The appeals court upheld the district court’s decision that such an award only would be proper if all 104 infringers had been sued (“joined”) in the same lawsuit with Live Nation. Here, once Live Nation was found liable, Friedman raised the downstream infringement by 104 parties, but did not join them in the action. As a result, Live Nation was not jointly and severally liable for the 104 downstream infringements.
The issues on which this case was reversed were returned to the lower court for trial by jury.
Robert Fletcher, an owner of a piece of artwork, sued Peter Doig, a well-known artist, for tortious interference with advantageous business relationships, claiming that because Doig claimed the painting was not his, Fletcher’s artwork lost all value. A federal judge in Chicago ruled that the painting could not have been painted by Doig.
Under the Visual Artists Rights Act of the U.S. Copyright Act, authors of a work of visual art have the “right to claim authorship of that work, and to prevent the use of his or her name as the author of any work of visual art which he or she did not create.” In 2007, Doig’s White Canoe sold for $11.3 million and The Architect's House in the Ravine sold for $12 million. If Fletcher sold his piece as an authentic Doig, its value likely would be over $10 million.
Fletcher claimed that he first met “Peter Doige,” a classmate, in the 1970s while taking classes at Lakehead University in Thunder Bay, Ontario. At the time, Fletcher was working as a correctional officer at Thunder Bay Correctional Facility. According to Fletcher, Doige was sent to Thunder Bay Correctional Facility for LSD possession where Fletcher allegedly witnessed Doige complete the work. After being assigned as Doige’s parole officer, Fletcher helped Doige find employment, and in return, Doige sold the painting to Fletcher for $100.00. The painting is signed “Pete Doige 76.”
Peter Doig claims he is not the same Peter Doige that Fletcher saw create the painting. Because Peter Doige passed in 2012, Doig offered the testimony of one of Doige’s sisters that Doige attended Lakehead University, that he was an inmate at Thunder Bay Correctional Facility, that he took art and music classes while there, and that the signature on the painting was that of her brother. Peter Doig never attended Lakehead University and was never incarcerated. He presented a yearbook photo proving that he could not have possibly been in prison at the time the painting was created.
Typical cases of art authentication involve proving that the work of visual art is authentic. Fortunately, Peter Doig was still living when he was required to prove he did not create the work Fletcher owned; however, such a burden of proof may be difficult for the heirs or estates of artists who have passed away.
Recently, a California federal court ruled that a re-mastered sound recording is eligible for independent copyright protection as a derivative work. Under the Copyright Act, terrestrial radio does not have to pay public performance royalties to copyright owners for sound recordings created after February 15, 1972. Sound recordings created before February 15, 1972 are not covered by federal copyright law; however, under California law, terrestrial radio is required to pay public performance royalties to sound recording owners. ABS Entertainment sued CBS Radio for infringing use of pre-1972 sound recordings. CBS Radio argued that the re-mastered recordings were not pre-1972 recordings, but were post-1972 derivative works covered by federal rather than state law. The district court agreed.
For a work to be eligible for copyright protection, the work must have “sufficient originality,” a low standard requiring only a “minimal” degree of creativity. The minimal degree of creativity standard applies to the creation of derivative works as well. The court noted that as to derivative works, “the variation from the original must be sufficient to render the derivative work distinguishable from its prior work in a [ ] meaningful manner.”
The re-mastering process involves adding certain aural elements to an already existing sound recording. These elements can include reverb, equalization, compression, spatial effects, and fade-ins/fade-outs. The district court was tasked with determining whether “subjectively and artistically altering the work’s timbre, spatial imagery, sound balance, and loudness range, but otherwise leav[ing] the work unedited” meets the minimal creativity standard.
Expert witnesses for CBS testified that re-mastering is a creative process subject to the mastering engineer’s “personal aesthetic” and that it is the mastering engineer’s creative decisions that ultimately affect how the re-mastered recording sounds. ABS argued that the re-mastering process is a mere “drag-and-drop’ conversion of an analog recording to a new digital format.” Ultimately, the district court agreed with CBS.
ABS has appealed the decision, but if upheld, the ruling could be detrimental to copyright owners’ rights. If a re-mastered sound recording qualifies as a distinct work, record labels would be able to extend the life of copyright in sound recordings indefinitely by simply “re-mastering” the sound recording anytime its protection is about to expire. The ruling may have a significant effect on copyright owners’ termination rights in sound recordings as well. Because a copyright owner can only terminate a grant of rights in the original copyrighted work, record labels would retain control of the re-mastered derivative works. If record labels still may exploit the re-mastered sound recording, any value attached to the original sound recording’s ownership becomes insignificant. You can read the judge’s order here.
On July 13, 2016, the “Copyright Alternative in Small-Claims Enforcement Act of 2016” bill was introduced in Congress. The bill will amend the Copyright Act to provide a forum in which parties may voluntarily seek to resolve certain copyright claims. Under the proposed bill, individuals may file infringement claims with the Copyright Claims Board, consisting of three attorneys appointed by the Library of Congress. Participation in a Claims Board proceeding is voluntary. If a party elects to not resolve a claim through the Claims Board, relief in federal courts remains available.
Certain claims cannot be heard by the Claims Board, such as any claims against persons residing outside of the U.S. As in federal court, a claim may be brought before the Claims Board only if the copyright owner properly registered the work. For works timely registered, statutory damages of up to $15,000 per work infringed may be awarded. For works not timely registered, the Claims Board may award statutory damages of up to $7,500 per work infringed or a total of $15,000 in any one proceeding. Alternatively, claimants still may elect to pursue actual damages. The monetary recovery, statutory or actual, may not exceed $30,000, exclusive of attorney’s fees and costs which may be awarded only in cases of bad faith conduct. The Claims Board will not consider whether a work was willfully infringed, but, when awarding damages, it may consider whether the infringer agreed to stop the infringing activity.
The legislation’s goal is to allow copyright owners to pursue claims without spending the hundreds of thousands of dollars that it may cost to litigate in federal court. Attorneys are not required to file or defend a claim. The bill also allows law students to represent claimants or respondents before the Claims Board. The Subcommittee on Courts, Intellectual Property, and the Internet currently is discussing the bill. For more information, click here.
Under Section 115 of the Copyright Act, an owner of a copyrighted musical composition must grant a license to any person who wants to make and distribute recordings of the composition. This type of license is called a “mechanical” compulsory license. The licensee must pay a statutory rate to the owner of the copyright for each distribution (as opposed to sale) of the work. Mechanical royalty rates are set by the Copyright Royalty Board (the “CRB”), unless the industry first agrees on the rate. The CRB met every two years to decide the statutory rate until the 2006 amendment to the law; the CRB now only meets every five years.
In deciding the statutory rate, the CRB first gives the music industry a chance to settle upon a rate. This process includes complex negotiations between songwriters, publishers, labels, and performing rights organizations, among others. When these entities cannot agree, the CRB determines the statutory rate. The CRB will meet later this year to set the rate for the period January 1, 2018 through December 31, 2022.
Beginning in 1909, the statutory rate was two cents per distribution of a work. Beginning in 1976, that rate incrementally grew every two years from two cents to 9.1 cents (for songs less than five minutes in duration). There has not been an increase since 2006. Even though inflation has decreased the value of the dollar, songwriters and copyright owners still earn the same 9.1 cents that they earned ten years ago; however, with the increase in streaming, fewer mechanical uses are licensed than before. Effectively, copyright owners earn two cents less per distribution than copyright owners ten years ago. It may seem negligible on a small scale, but it could be the difference of $20,000 for anyone whose composition sells a million copies.
Unfortunately for songwriters and composition copyright owners, as of July 25, 2016, the CRB recommended keeping the royalty rate at the same 9.1 cents through 2022. The rate setting is open for comment. Interested parties may submit electronic comments regarding the CRB’s recommendation via email to email@example.com by August 24, 2016.
Around the time of World War II, the Department of Justice (DOJ) entered into consent decrees with ASCAP and BMI, the public entities responsible for licensing and collecting public performance royalties on behalf of songwriters and music publishers. These consent decrees are intended to prevent unfair monopolies from forming and to protect songwriters, independent publishers, and licensees from being treated unfairly by imposing restrictions on these two performing rights organizations (PROs). For example, a publisher cannot pull part of its catalog and charge higher rates for certain songs. Under a PRO blanket license, it costs the same to license the biggest hit of 2016 as it does to license Uncle Joe’s underground basement mixtape.
One of the largest criticisms of these consent decrees is that they are outdated. The music industry has evolved since 1941, but the decrees have not. The ASCAP consent decree was last updated in 2001 and BMI’s in 1994. Recently, the DOJ reviewed these concerns and issued an opinion, which eventually will become part of these consent decrees.
The DOJ’s recommendations are unfriendly to many of the most popular concerns and in some instances, take a step in the wrong direction. The DOJ rejected most reform proposals including allowing publishers to partially withdraw their catalogs, allowing ASCAP and BMI to bundle multiple rights for licensing, and providing expedited rate setting processes for licensees.
The most shocking recommendation by the DOJ is the termination of fractional licensing. ASCAP and BMI can only license the percentage of a song that it represents. A song co-written by an ASCAP writer and a BMI writer requires the user to obtain a blanket license from both PROs as each has the right to license 50% of the song. The DOJ proposed a 100% licensing system, which means, for that same song, the user would only need a license from either ASCAP or BMI as each PRO could license 100% of the song even though a writer is not affiliated with that PRO.
The proposed 100% licensing system means that a writer who chose to affiliate with BMI will be paid according to ASCAP’s payment system if ASCAP licenses the song. It also may be a disincentive for songwriters to collaborate if they are affiliated with different PROs. Songwriters affiliated with a PRO of their choice trust that the PRO will represent the writers’ best interests. A 100% licensing system means that a PRO with no relationship with a particular songwriter would have the ability to license, collect, and pay on that songwriter’s behalf without regard to that songwriter’s interest. To avoid this outcome, songwriters will be incentivized to collaborate only with songwriters affiliated with the same PRO. Many songwriters believe the DOJ’s recommendation may interfere with the creative process by effectively limiting with whom songwriters may collaborate.
Although this news is unsettling for songwriters, the process is not over. The DOJ still must make its recommendations public, negotiate the recommendations with the affected PROs, and get the recommendations approved by a federal judge.
A jury returned a verdict in favor of Led Zeppelin in the case determining whether the band copied the opening music in “Stairway to Heaven.” In 1967, guitarist Randy Wolfe (known as Randy California) started a band called Spirit. In January 1968, Spirit released a self-titled album featuring an instrumental song, “Taurus.” In 2014, a trustee for Randy California’s trust (which controls the rights to his music as he died in 2008) sued Led Zeppelin, claiming that the beginning of “Stairway to Heaven” infringed “Taurus.”
One of the more interesting aspects of the case was the different “remembering” of the facts by both parties. The Trust claimed that Led Zeppelin opened for Spirit in 1968 and that Jimmy Page grew familiar with “Taurus” and was heavily influenced by Spirit to the point that Led Zeppelin began covering Spirit’s songs. A chart in the complaint detailed 17 other songs that Led Zeppelin allegedly “lifted” without giving credit to Spirit. The Trust alleged Led Zeppelin attended a Spirit concert in 1970 where Spirit performed the song. Afterwards, Jimmy Page and Robert Plant supposedly met Spirit members to play Snooker in a pub.
Writers Jimmy Page and Robert Plant had a very different recollection of events. Page and Plant both claimed that prior to the lawsuit, they had never heard “Taurus.” Page said he unknowingly owned a copy of Spirit’s album and that a guest may have left it at his house. Plant said he never owned a Spirit album, but once owned a compilation featuring a song by Spirit, although it was not “Taurus.” They claim they never opened for Spirit and were never on the stage at the same time. Plant denied ever meeting Spirit members at a pub. Page claimed that in April 1970, he wrote the guitar part for “Stairway to Heaven” in a remote cottage in Wales. Once he had written the guitar part, Plant wrote the lyrics while Page worked on the song with the rest of the band in the studio.
At trial, the Trust’s lawyer exhibited bold characteristics such as sporting a fender amp styled briefcase, attempting to play videos not admitted into evidence, and having over 100 objections sustained against him. In the most untraditional manner, the complaint is riddled with the iconic “Led Zeppelin font.” The Trust offered a settlement of one dollar and a writing credit.
The defense argued that the familiar intro music is actually in the public domain, which means no one can claim copyright ownership to that work, a necessary element to prove infringement. Through expert testimony, it was argued that the intro to “Stairway to Heaven” is a musical passage dating back to the 17th century with other versions of the song performed in 1963.
The jury found that Randy California owned the copyright to “Taurus” and that Led Zeppelin heard the song. Although the jury was not allowed to listen to recordings of the two songs, they listened to them played live on acoustic guitar. They returned a verdict just thirty minutes after hearing the two songs played, finding that the extrinsic elements of the two songs were not “substantially similar” and that Led Zeppelin was not liable for infringement.
As the prevailing party, Plant and Page’s music publisher, Warner/Chappell, is now seeking $800,000 in attorney fees from the Trust. In the wake of the recent “Blurred Lines” decision, many believed that the floodgates to unnecessary copyright infringement litigation would be opened. If fees are awarded, it may deter frivolous cases from being filed. Having to pay nearly a million dollars for losing is quite an incentive to make sure that a case has merit before filing.
The U.S. Supreme Court recently provided further clarification regarding attorney’s fees awards in copyright infringement cases. Section 505 of the Copyright Act provides that reasonable attorney’s fees may be awarded to the prevailing party. District courts have had substantial discretion in awarding those fees and costs.
This case originated when Kirtsaeng, a Thai citizen, had textbooks printed by John Wiley & Sons purchased at a much cheaper price than U.S. prices and sent to Kirtsaeng in the U.S. where he would sell them for a profit. After losing in the district and appellate courts, Kirtsaeng successfully convinced the Supreme Court that his conduct was permissible under the “first sale doctrine” which allows a purchaser to further distribute a copyrighted work without payment of royalties. As the prevailing party, Kirtsaeng then sought more than $2 million in attorney’s fees from Wiley. After giving “substantial weight” to the “objective reasonableness” of Wiley’s infringement claim, the court declined to award Kirtsaeng the fees, and he again appealed.
At issue before the Supreme Court was how to best guide the district courts in awarding attorney’s fees while ultimately serving the “purpose of enriching the general public through access to creative works,” the overarching objective of the Copyright Act. Kirtsaeng argued that giving “special consideration to whether a lawsuit resolved an important and close legal issue” and thus “meaningfully clarifie[d] copyright law” should control the Court’s decision. The Court found such a proposal would “not produce any sure benefits” as it is often difficult to recognize a case’s jurisprudential significance during the proceedings. Instead, the Court found that Kirtsaeng’s proposal would merely “raise the stakes” of copyright litigation. By increasing the reward for victory and enhancing the penalty for defeat, the effect would hinge on whether parties were more or less risk adverse.
Wiley argued that “giving substantial weight to the reasonableness of a losing party’s position will best serve the Act’s objectives.” The Court agreed, finding it would encourage parties with strong legal positions to “stand on their rights” and “deter[s] those with weak ones [positions] from proceeding with litigation.” The Court found that it was much easier for a district court to decide whether a losing party’s claim or defense was reasonable rather than what effect the outcome would have on copyright law.
Using their discretion, district courts must weigh several factors when awarding fees. Awards cannot be made as a matter of course, but must be based upon a “more particularized, case-by-case assessment.” Prevailing plaintiffs and prevailing defendants must be treated the same. Also, courts should consider factors such as frivolousness, motivation, objective unreasonableness, and the need in particular circumstances to advance considerations of compensation and deterrence.
While objective reasonableness is an important factor, it cannot be the controlling factor. The district courts must view all of the case’s circumstances in light of the Copyright Act’s essential goals. Many Second Circuit cases suggest that a “finding of reasonableness [of the defense] raises a presumption against granting fees.” The Court found this result too restrictive, particularly where hardly any Second Circuit decisions granted fees when the losing party raised a reasonable argument.
Interestingly, after a long opinion favoring Wiley, the Court ruled for Kirtsaeng by remanding the case for reconsideration of Kirtsaeng’s fee request based upon the Supreme Court’s guidance. The Court directed the district court to give substantial weight to the reasonableness of Wiley’s litigating position, but also to consider all other relevant factors. It appears that Kirtsaeng will need to come up with significant other factors to justify an award of attorney’s fees on his behalf. You can read the Supreme Court’s decision here - Kirtsaeng v. John Wiley & Sons, Inc. Opinion
Card playing has been around since the 9th century, and despite the widespread use of electronic games, physical card games remain in play. Typically, a card game’s mechanics and rules are not protected by copyright law because they are considered to be a system or method for playing the game. On the other hand, expressive elements of the game may be protected.
Two years ago, a federal court in the Southern District of Texas found that the characters in a copyrighted role-playing card game, Bang!, could be found to be protectable under U.S. copyright law. The court also found that a comparison of Bang! to Legends of the Three Kingdoms, a role-playing card game set in ancient China, showed a finding of substantial similarity between the characters and roles from which copyright infringement could be found. These possibilities were sufficient to defeat Legends’ motion to dismiss Bang!’s copyright infringement claims. Recently, however, a finding of infringement was not in the cards when the same judge granted summary judgment to Legends after a finding that Legends was not substantially similar to Bang!
Bang! players each take on a character identity within one of four roles with each role having a different objective. Players also are dealt a character card with each character having a set of abilities and a number of “life points” or bullets. There also are three types of action cards. The game ends when either the Sheriff is killed and the Outlaws or Renegades wins, or the Outlaws and Renegades are killed, and the Sheriff and Deputies win. The allegedly infringing game Legends has nearly identical rules for playing. Legends' Chinese-themed roles are the same as Bang!’s roles, and each player likewise is dealt a character card with a specific ability and life points. (Instead of bullets, Legends uses ying/yang symbols.) Both games are turn-based card games.
The court ultimately found that Legends did not infringe the protectable, expressive elements of Bang! The court eliminated what it found to be unprotectable elements, including the characters in Bang! that were found to be stock characters not afforded copyright protection. (Good guys versus bad guys) Bang! argued that the alignment of the roles with the expressive elements of the characters created protectable expression under copyright law. The court disagreed, finding that Legends only copied the rules and methods of play which are unprotectable under copyright. Bang!’s protected expression was not copied in that none of the artwork or depictions of the characters were the same and the characters in the two games operated in different settings. The court found that the aspects of the roles, characters, and interactions that are similar are not expressive, and aspects that are expressive are not substantially similar. Thus, as a matter of law, Bang! could not prove copyright infringement. This decision limits the protection afforded to card games—that is until the next challenge is raised.
The Napster founder recently announced his latest project, Screening Room, a service that will stream first run movies into the consumer’s home. The customer must buy a box for $150.00 and each movie will cost $50.00 to stream. (And you thought an $11.25 ticket was high!)
Much like Napster changed the music industry, Screening Room is expected to change film distribution. Typically films are released to theaters first and later made available for purchase/rent, shown on cable, and then finally, may appear on broadcast networks. There are always exceptions, too, such as the simultaneous theatrical release coupled with an exclusive cable TV showing. Studios distribute movies in this manner to maximize the profits by making the films available over a period of time at different, declining prices. A consumer then has the choice of waiting until the film is in the $5.00 bin at Wal-Mart or paying the high ticket price to see the film immediately upon its theatrical release.
Screening Room plans to reach those consumers who might pay more to see a first-run movie at home rather than a theater filled with loud-talkers on cell phones. It seems unlikely that Screening Room will be suited to most movie-goers, but rather is more likely for those consumers who already have home theaters.
Parker’s business model may require that Screening Room have exclusive rights to the films, thus raising an anti-trust question for the Department of Justice to consider, i.e., is it a monopoly and thus an unlawful restraint of trade by eliminating competitors. (But then again, the announced merger of AMC-Carmike will be a pretty big monopoly with over 8,000 screens in the U.S.) To get films to the home-movie viewer upon the film’s release, Screening Room would need exclusivity to make the model work. In this time of declining theater attendance, Parker’s streaming service may be what the consumer wants. Theaters have done a lot to attract movie-goers (think 3-D, IMAX, wine/beer/coffee bars) but it seems ticket prices rather than attendance, have increased. It is possible there are consumers who would like a choice in movie-watching experiences – that is as long as it continue to cost more than $50.00 to take a family of four to a theater. It should be noted though that Screening Room does not come with a concession stand, stale popcorn, and $8.00 soft drinks.
The importance of protecting copyrights is supported by a fee-shifting statute that grants a court discretion to award attorney fees to the prevailing party in a copyright infringement action. The “American Rule” regarding attorney fees generally is that each party bears his own fees and costs when litigating a matter, unless there is a statute or a contractual provision allowing recovery of fees and costs. Due to the strong, historical public policy of protecting a party’s constitutional right to copyright, Congress enacted Section 505 of the 1976 Copyright Act permitting recovery of fees and costs to the party who wins the case, but such an award is not assured. The decision to award fees is left to the court who will consider it upon motion of the prevailing party.
The U.S. Supreme Court recently heard oral argument on the issues of a fee award in Kirtsaeng v. John Wiley & Sons, on appeal from the Second Circuit Court of Appeals. Mr. Kirtsaeng successfully defended against a claim of copyright infringement brought by publisher John Wiley. The underlying case regarding the Copyright Act’s first sale doctrine presented sufficiently unique issues to ultimately be heard before the U.S. Supreme Court. The district and appellate courts declined to award fees to Mr. Kirtsaeng because the courts believed the publisher’s suit was reasonable under existing law, noting that three of the Supreme Court Justices agreed with the publisher on the merits.
In this review of the denial of fees to Mr. Kirtsaeng, the Supreme Court must interpret the fee-shifting statute and determine if it was appropriate to bar the recovery of fees where the losing party’s position was reasonable. Mr. Kirtsaeng argued that an award of fees should be granted where the award furthers the purposes of the Copyright Act, a rather vague and relatively uneven means for determining if an award is appropriate. A vague standard will result in inconsistent outcomes. On the other hand, Wiley argued that no fees should be awarded in any case where the losing party’s position was reasonable. The Supreme Court was concerned that the “reasonableness” standard tended to favor plaintiffs over defendants, and the Court wanted an interpretation of the statute that resulted in even-handed fee awards for both plaintiffs and defendants.
Even with the fee-shifting statute, many parties cannot afford to litigate the issue to a successful conclusion in order to have a court consider a motion for attorney fees. A clearer standard would aid lower courts in deciding to make a fee award. We must await the decision of the Supreme Court on what is the appropriate standard for awarding fees to a prevailing party.
Did you ever wonder what “fair use” of a copyrighted work really means? Do you believe that it is “fair use” to use someone else’s copyrighted work if you do not make a profit on the use? (Think “User Generated Content” on YouTube, Facebook or other social media platforms.) Most people believe that what constitutes fair use is a question easily answered. It is not. There are statutory factors that a court must take into consideration when deciding if the defense of fair use applies when a copyright owner sues for copyright infringement. Fair use court decisions are typically fact-specific and therefore, not applicable to all cases unless those particular facts are present.
Most people would rather not find out in a court order if the fair use defense will work. For the past year, the U.S. Copyright Office has provided a “Fair Use Index” to assist the public in understanding how fair use works in the real world. There is a basic explanation of fair use and there is a searchable database of nearly 200 summaries of fair use court decisions covering all appellate jurisdiction and several categories of use from music to parodies.
The Index is not a substitute for legal advice. It is updated periodically and can be found on the Copyright Office website.
Fans of Fox’s television show, Empire, are pleased to know that the second season will continue without a further legal battle with Empire Distribution, Inc. In January 2015, Fox debuted Empire that chronicles the life of a rapper turned music mogul and his feuding entertainment industry family. Fox spent millions advertising the show, entered into contracts with the artists and producers involved, and released their music. Columbia Records even released a soundtrack featuring the show’s songs. Founded in 2010, Empire Distribution is a record label, music distribution, and publishing company focusing on the urban, hip-hop, rap and R&B genres. Empire Distribution has released over 85,000 songs and has worked with many famous rappers including T.I., Snoop Dog, The Game, and Gladys Knight.
When Empire debuted, Empire Distribution had federal trademark applications pending for “Empire,” “Empire Distribution,” “Empire Publishing,” and “Empire Recordings.” Empire Distribution sent a cease and desist letter to Fox, asking them to stop using “Empire,” as it would cause consumer confusion as to an affiliation between Fox and Empire Distribution. In response, Fox sued Empire Distribution seeking a declaration of rights that no trademark infringement occurred by its use of the word “Empire.” Empire Distribution sued Fox for trademark infringement and dilution, unfair competition and other claims. The district court held the First Amendment protected Fox’s use of “Empire.”
Trademark rights are designed to avoid consumer confusion. Courts must balance the public interest of avoiding consumer confusion with the public interest in free expression. To assess whether the First Amendment protects use of a trademark, the court must determine whether the allegedly infringing use was contained in an expressive work. Fox made it clear that its use of “Empire” was not a reference to Empire Distribution. Instead, the word “Empire” was necessary to Fox because its series tells the story of a former drug dealer turned music mogul, who created his own empire. The court noted the series is based in New York, the Empire State, and so the word “Empire” was artistically relevant to Fox’s show.
Use of a mark in the title of a work alone is not sufficient to bar First Amendment protection. Even if there was “widespread consumer confusion,” the court must strike a balance in favor of free expression. The court found Empire Distribution’s arguments of consumer confusion unpersuasive, instead finding Fox had not misled consumers as to any affiliation with Empire Distribution. Empire Distribution conceded that Fox’s use of “Empire” satisfied the legal standard, but instead, asked the court to amend the legal standard. The court refused.
It is uncommon for a junior mark in the same or similar industry to succeed on trademark infringement claims as Fox did here. (A junior mark is one used after the senior mark has been first used in commence.) Analysis of these suits focuses on whether the junior mark confuses consumers as to the provider of the junior and senior marks’ goods and services. Single word trademarks, such as “Armour” and “Polo,” are quite popular, so any junior use of the single words in any other marks is quite limited. This case allows companies to use single words in other marks, so long as the use does not actually mislead consumers.
Twentieth Century Fox Television, et al. v. Empire Distribution Inc., 2:15-cv-02158-PA-FFM, (C.D. Cal. Feb. 1, 2016)←Older posts