IP Law Chat : IP Law Chat -- Hendricks & Lewis, intellectual property, trademark, copyright and technology attorneys

Through a fairly involved process (described in detail in the Federal Circuit's opinion), the plaintiff, Frank Gaylord, a nationally-recognized sculptor, was selected to create a sculpture  for the Korean War Veterans Memorial in Washington, D.C.  Ultimately, he created 19 stainless steel statues for the Memorial that represented a platoon of foot soldiers in formation that was referred to as The Column.  Gaylord received five copyright registrations relating to the soldier sculptures.

In 1995, photographer John Alli took a number of photographs of the Memorial as a retirement gift for his father, a veteran of the Korean War.  Some years later, Alli's photograph of the Memorial was selected to be used on a 37-cent stamp commemorating the 50th anniversary of the armistice of the Korean War to be issued by the Postal Service.  The Postal Service paid Alli $1500 for the use of his photograph.  It did not seek nor obtain Gaylord's permission to use The Column in the stamp.  The Postal Service received more than $17 million from the sale of almost 48 million stamps before the stamp was retired on March 31, 2005.

Gaylord then sued the government in 2006, alleging copyright infringement of his copyright in The Column.

At trial, the government made several arguments:  (1) that the stamp made fair use of Gaylord's work; (2) that it was a joint author of the work, which gave it an unlimited license in the work; and (3) that the stamp fell under the exclusion from copyright infringement liability for architectural works under the Architectural Works Copyright Protection Act.

The Court of Federal Claims disagreed with the government on two of its three arguments, finding that Gaylord was the sole copyright owner and that the work was not an "architectural work" under the AWCPA.  The Court agreed, however, that the government was not liable for copyright infringement because it had made fair use of the work.

The Federal Circuit affirmed the trial court's conclusions that the government did not have rights as a joint owner of the work and that the work was not subject to the AWCPA.  It parted ways with the trial court on the issue of fair use,  however, concluding that the factors did not favor fair use and that "allowing the government to commercially exploit a creative and expressive work will not advance the purposes of copyright in this case."

The Federal Circuit found that the purpose and character of the stamp, including the fact that the stamp clearly had a commercial purpose, the expressive and creative nature of Gaylord's work and the fact that Gaylord's work was the focus ("essentially the entire subject matter") of the stamp did not favor a finding of fair use.  The only factor working in favor of fair use was the trial court's conclusion, upheld on appeal, that the stamp had not and would not adversely impact Gaylord's efforts to market derivative works of The Column.

Circuit Judge Newman dissented from the majority opinion, arguing that:

[t]he use for governmental purposes of a photograph of the Korean War Veterans Memorial, a public monument that was designed and built with public money, is unambiguously covered by the contract and statutes under which this Memorial was built.  The court errs in its holding that Mr. Gaylord is entitled to damages for copyright infringement.

The majority and dissenting opinions in Gaylord v. United States, No. 2009-5044 (Fed. Cir. Feb. 25, 2010) can be found here (PDF, 36 pgs).

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The First Circuit took on a fairly specialized issue of copyright law in a lengthy opinion involving, among other claims, allegations that the Massachusetts Museum of Contemporary Art violated the rights of Swiss visual artist Christoph Büchel under the Visual Artists Rights Act ("VARA"), which protects certain so-called "moral rights" of some visual artists.

The 60-page opinion gives a long and detailed explanation of the history of the installation as well as the deterioration of the relationship between the Museum and Büchel.  In brief, the Museum and Büchel agreed to an installation art project entitled "Training Ground for Democracy" that Büchel described as "essentially a village, . . . contain[ing] several major architectural and structural elements integrated into a whole, through which a visitor could walk (and climb)."  Although the parties did not formalize their relationship with regard to the installation by executing a written instrument, they apparently did agree that Büchel would have sole title to any copyright in the completed work.

Unfortunately, as a result of numerous conflicts and a breakdown in the relationship between the Museum and Büchel, the project was never completed.  Thus, the Museum sought a declaration in federal court that it was entitled to present the materials and "partial constructions" of the installation to the public.  Büchel in turn counterclaimed under VARA and the Copyright Act seeking an injunction preventing the Museum from displaying the unfinished installation as well as damages for alleged violations of his rights.

On cross-motions for summary judgment, the District Court found for the Museum because, although it assumed that VARA applies to unfinished works of art, it concluded that there were no genuine issues of material fact.  The First Circuit agreed with the District Court in some respects but ultimately concluded that there were genuine issues of fact as to some of Büchel's claims under VARA and Section 106 of the Copyright Act.

The lengthy opinion is worth the read for those interested but here's a quick summary of some of the First Circuit's conclusions on the legal issues:

•  VARA applies to unfinished but "fixed" works of art that, if completed, would qualify for protection under the statute
• VARA does not provide a damages remedy for violation of the right of attribution, one of the "moral rights" protected under the statute
• VARA does not cover the separate moral right of disclosure (also known as the right of divulgation), which protects the artist's authority to prevent third party disclosure of the work to the public without the artist's consent
• The failure of claims under VARA does not, necessarily, signify the inadequacy of "more traditional copyright claims"

The cite is Massachusetts Museum of Contemporary Art Foundation, Inc. v. Büchel, No. 08-2199 (1st Cir. Jan. 27, 2010).

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In Schrock v. Learning Curve Int'l, Inc., the Seventh Circuit took up the issue of the extent of originality necessary for a copyright in a derivative work as well as the question of what permissions are necessary for the author of the derivative work to have a copyright in the work.

HIT Entertainment owns the copyright to the "Thomas & Friends" train characters and licensed Learning Curve to make toy figures of its characters.  Learning Curve then hired professional photographer Daniel Schrock to take photos of the toys for promotional materials.  After Learning Curve stopped using Schrock's photography services, it continued to use his photos in advertising and product packaging.  Schrock then registered his photos for copyright protection and sued Learning Curve and HIT Entertainment for copyright infringement.

The district court granted the defendants' motion for summary judgment concluding that Schrock did not have a copyright in the photos.  The district court, classifying the photos as derivative works (derivative of the "Thomas & Friends" characters), held that for such works, Schrock needed permission from Learning Curve both to make the photos and to copyright them.  Because Schrock had only the former permission, the district court dismissed his claim for copyright infringement.

The Seventh Circuit reversed, concluding that the district court had made a number of errors of law in granting summary judgment to the defendants.

As an initial matter, the Seventh Circuit noted the "deep disagreement" regarding whether photos of a copyrighted work are derivative works but chose not to weigh in on the disagreement, concluding that it need not resolve the issue and assumed for purposes of the decision that Schrock's photos were derivative works.

Turning to the issues it was prepared to decide, the Seventh Circuit first addressed the question of what standard of originality Schrock's photos must meet to qualify for copyright protection.  Specifically, the defendants argued that the photos must meet a higher standard of originality, relying on language from an earlier Seventh Circuit decision, Gracen v. Bradford Exchange, 698 F.2d 300 (7th Cir. 1983).  In Gracen, the court stated that the plaintiff could not maintain a suit for infringement of a derivative work because that work was not "substantially different from the underlying work to be copyrightable."

The Seventh Circuit concluded that this language was not intended to establish a higher standard of originality for derivative works.  Reading Gracen in light of other Seventh Circuit authority, the court identified two general principles:  "(1) the originality requirement for derivative works is not more demanding than the originality requirement for other works; and (2) the key inquiry is whether there is sufficient nontrivial expressive variation in the derivative work to make it distinguishable from the underlying work in some meaningful way."

With respect to Schrock's photos, although they were "highly accurate product photos," there was "minimally sufficient variation in angle, perspective, lighting, and dimension to be distinguishable from the underlying works" to entitle the photos to the limited derivative-work copyright protection.

The Seventh Circuit next addressed the district court's conclusion that Schrock needed the permission of the owner of the copyright in the underlying work both to create the derivative work and to copyright the derivative work.

Noting that copyright in a derivative work--and any other work--arises by operation of law upon the fixation of the original expression in a tangible medium, the Seventh Circuit rejected the district court's reasoning.  Thus, as long as Schrock created the derivative works with permission--which he did--he owned the copyright in those works (assuming the other requirements for copyright were satisfied).  However, because the default rule--that copyright in a derivative work arises by operation of law--can be altered by agreement of the parties, the Seventh Circuit remanded the case to determine whether the parties had done so in this case.

The cite is Schrock v. Learning Curve Int'l, Inc., No. 08-1296 (7th Cir. Nov. 5, 2009).

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For a change of pace, here are brief summaries of some of the recent copyright infringement complaints filed in the Western District of Washington:

Corbis Corp. v. Infinity Commercial Capital, LLC, No. CV09-00657 JPD, filed May 12, 2009

Corbis alleges that Infinity Commercial Capital ("ICC"), a business providing hotel and commercial mortgage lending services, downloaded, without authorization, at least 16 images from Corbis' website and uploaded and displayed those images on ICC's website.  Corbis alleges claims for direct and vicarious copyright infringement, as well as breach of contract.  In connection with the latter claim, Corbis alleges that, pursuant to the Corbis Content License Agreement, by using the Corbis images without authorization, ICC agreed to pay Corbis 10 times the licensing rate in addition to other fees, damages and penalties claimed by Corbis.

Complaint here (PDF, 22 pgs).

Global Research & Rescue v. Six Flags, Inc., No. CV09-00749 MJP, filed May 29, 2009

Global Research and Rescue ("GRR"), a non-profit "engaged in the activity of benefiting whales and other marine mammals by promoting public awareness of the existence of these animals," alleges that it is the owner of the copyrights in three films depicting killer whales in their natural habitat.  In 2004, GRR provide complete copies of these films to Six Flags Discovery Kingdom for purposes of demonstrating GRR's capabilities.  GRR alleges that Six Flags then used the films through at least the 2006 and 2007 tourist seasons at the Six Flags Discovery Kingdom Park in Vallejo, California without GRR's permission or authorization.  GRR alleges claims for copyright infringement and unjust enrichment.

Complaint here (PDF, 5 pgs).

Blue Nile, Inc. v. Gem Stone King, Inc., No. C09-0828 RSL, filed June 16, 2009

Blue Nile, the market leader in the online diamond and fine jewelry retail industry, alleges that Gem Stone King willfully and without authorization copied Blue Nile's distinctive diamond photographs and displayed those photographs on Gem Stone King's website.  Blue Nile alleges a single claim of copyright infringement against Gem Stone King.

Complaint here (PDF, 7 pgs).

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Although it is not hot off the presses, the Third Circuit's decision in William A. Graham Co. v. Haughey is worth a brief mention.

Most notably, the Third Circuit was faced with a question of first impression, namely, whether the discovery rule or the injury rule governed the accrual of claims under the Copyright Act.  Under the discovery rule, a claim accrues when the plaintiff discovers, or with due diligence should have discovered, the injury forming the basis of the claim.  Conversely, under the injury rule, a claim accrues at the time of the injury.

Ultimately, the Third Circuit joined the ranks of eight of its sister courts of appeals--the First, Eighth, Sixth, Ninth, Seventh, Fourth, Fifth and Second Circuits--and concluded that the discovery rule governed the accrual of civil claims under the Copyright Act.

The Third Circuit's opinion can be found here.

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This copyright infringement case involved two competitors that provide consulting services "aimed at improving employee communication and negotiation skills within the workplace."

The plaintiff, Situation Management Systems, Inc. ("SMS") had developed training materials focused on teaching these skills and specifically three training workbooks ("Positive Power & Influence", "Positive Negotiation Program", and "Promoting and Implementing Innovation").  After SMS was acquired in bankruptcy proceedings in 2001, a number of employees left the company, several of whom started defendant ASP. Consulting LLC ("ASP").  ASP then developed training workbooks including three that SMS claimed infringed its copyrights in its workbooks.

The district court found that ASP had in fact copied SMS's works but entered a judgment of noninfringement because it concluded that ASP's works were not substantially similar to the very limited protectable aspects of SMS's works.

The First Circuit disagreed with the district court, however, primarily with the district court's conclusions with regard to the "originality" necessary for copyright protection.  Ultimately, the First Circuit concluded that the "district court's originality analysis was obviously tainted by its own subjective assessment of the works' creative worth" which the First Circuit noted "displayed nothing but pejorative disdain for the value of SMS's works."  The quotations from the district court cited by the First Circuit appeared to support the characterization of the district court's opinion of SMS's works.

In concluding that SMS's works were "dominated by unprotectable material," the district court opined that

[t]hese works exemplify the sorts of training programs that serve as fodder for sardonic workplace humor that has given rise to the popular television show The Office and the movie Office Space.  They are aggressively vapid--hundreds of pages filled with generalizations, platitudes, and observations of the obvious.

Similar comments and characterizations are sprinkled throughout the district court's opinion along with seemingly tangential asides including a brief description of the Civil War's Battle of the Crater and a recitation of Shakespeare's Sonnet 18.  Also, in the footnote describing the Battle of the Crater, the district court stated that

[i]t is appropriate to note that law clerk Alex Ewing, Esq., the creative analyst behind this opinion, is the great-great-grandson of George Washington Condrey, a sergeant in Lane's North Carolina Brigade, who believed until his dying day that he had accidentally shot Stonewall Jackson.

And in another footnote in the district court's 34-page opinion, apparently in connection with its substantive discussion of originality, the court noted that "[a]propos of naming concepts, it is interesting to note that The Origin of the Species does not actually include the word evolution" and then quotes the passage of the book from which that word evolved.

Returning to the legal issues, the First Circuit readily concluded that SMS had satisfied the originality requirement for all of the three works at issue and remanded the case back to the district court to consider the question of substantial similarity in light of the standards articulated by the First Circuit.

The First Circuit's opinion in Situation Management Systems, Inc. v. ASP. Consulting, LLC, can be found here (PDF, 20 pages) and the District Court's (somewhat unusual) opinion can be found here (PDF, 34 pages).

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It is still in its infancy but the lawsuit between Shepard Fairey and The Associated Press over Fairey's use of a photograph taken by an AP photographer to create his well-known "Obama Hope" poster (and other related works) has already generated some interesting reading.  Specifically, the AP filed its answer to Fairey's complaint for declaratory and injunctive relief and asserted several counterclaims against Fairey and related entities for copyright infringement, a declaratory judgment and violation of the DMCA.

The core issue is whether Fairey's use of the AP photo constituted fair use.  Fairey contends that his use of the photo "as a visual reference" was fair use and emphasizes the transformative nature of his creation:

"Fairey transformed the literal depiction contained in the [AP] Photograph into a stunning, abstracted and idealized visual image that creates powerful new meaning and conveys a radically different message that has no analogue in the original photograph."

Fairey also alleges that he "did not create any of the Obama Works for the sake of commercial gain", that the AP photo was a "factual" work, that he used only a reasonable portion of the photo, and that his use did not impose any "significant or cognizable harm" to the value of the AP photo.

The AP's answer disputes Fairey's characterization of his use of the AP photo, claiming that Fairey's work copies "all the distinctive and unequivocally recognizable elements of the Obama Photo in their entire detail, retaining the heart and essence of The AP's photo[.]"

But the AP's counterclaims go on to say much more about both the AP and Fairey, apparently in order to paint a picture of the "equities of this lawsuit" as the AP sees them.  For example, AP's counterclaim alleges that Fairey has shown "willful disregard for the property rights of others" but has acted "hypocritically and aggressively when it comes to the protection of Fairey's works and enforcement against those who make use of them."  The AP also describes the parties' pre-filing discussions and alleges Fairey's counsel "reneged" on a "standstill agreement" by filing the lawsuit.

A copy of Fairey's complaint can be found here (PDF, 15 pages) and the AP's answer and counterclaims can be found here (PDF, 61 pages--with pictures--but worth the read).

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A few months before the (seemingly never ending) 2008 presidential election, singer/songwriter Jackson Browne sued then-Republican Presidential candidate Senator John McCain, the Republican National Committee and the Ohio Republican Party in connection with the use of portions of Browne's composition, Running on Empty, in a campaign commercial for Senator McCain.

Problem is (at least as Browne saw it) that none of these defendants obtained a license or Browne's permission to use the composition in the commercial.  Instead, according to the Court, the Ohio Republican Party purchased the composition from iTunes to use in the commercial.  The use of the composition did not sit well with Browne as he contended that the commercial falsely suggested that he sponsored, endorsed or was associated with Senator McCain and the Republican Party when, as his complaint put it, "nothing could be further from the truth."  To the contrary, although the Ohio Republican Party principals apparently were ignorant of the fact that Browne was politically active, Browne's public support for the Democratic Party and then-Presidential candidate Barack Obama was well known.

Browne thus sued the defendants in the Central District of California asserting copyright infringement, vicarious copyright infringement, false association or endorsement under the Lanham Act, and violation of California's common law right of publicity.  The RNC and Senator McCain responded with a motion to dismiss the first three claims for failure to state a claim as well as a motion to strike the right of publicity claim under California's Anti-SLAPP statute.  The defendants struck out on both motions.

Essentially, although couched in a variety of ways, the RNC's and Senator McCain's arguments boiled down to an assertion that Browne's claims failed as a matter of law because political speech/expression was involved.

Thus, they argued that the fair use doctrine barred, as a matter of law, Browne's copyright infringement claims; the Court disagreed, concluding that it could not make a fair use determination at this stage of the proceeding and specifically noting that the "mere fact" that the copyright claim was based on use of a copyrighted work in a political campaign did not bar Browne's claim as a matter of law.

And the RNC and Senator McCain argued that Browne's false association/endorsement claim under the Lanham Act failed because (1) the Act applies only to commercial speech and does not apply to political speech, (2) the commercial was an expressive work and therefore the claim was barred under the First Amendment and the Rogers artistic relevance test, and (3) there was no likelihood of confusion because the Ohio Republican Party was clearly identified as the source of the commercial.  The Court readily rejected the defendants' first premise, concluded that defendants had not established that the First Amendment and the artistic relevance test barred Browne's claim particularly at this stage of the proceeding, and found that the identification of the source of the commercial did not preclude the possibility of confusion as to whether Browne endorsed Senator McCain, the RNC or the Ohio Republican Party.

Similarly, with respect to the RNC's and Senator McCain's Anti-SLAPP motion to strike, although the Court found that the defendants had established the first element--that Browne's right of publicity claim arose from protected activity because it involves an issue of public interest, specifically, the 2008 presidential election and the candidates' energy policies--Browne met his resulting burden of showing a probability of prevailing on his claim, which the Court interpreted to mean a "mere possibility" of success.

The Court's order denying the RNC's motion to dismiss can be found here (PDF, 7 pages).  The Court's order denying the RNC's special motion to strike can be found here (PDF, 9 pages).

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An interesting tidbit via the EFF, according to the copyright policy, the content on President-elect Barack Obama's website, change.gov, is licensed under a Creative Commons license.

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John Facenda won national acclaim for his work on various NFL Films becoming known to some football fans as "the Voice of God" because of the special qualities of his voice.  For decades, Mr. Facenda did worked on these films under an oral agreement, receiving a per-program fee.  But not long before he died of cancer in 1984, Mr. Facenda signed a standard release contract that stated that NFL Films enjoys "the unequivocal rights to use the audio and visual film sequences recorded of me, or any part of them . . . in perpetuity and by whatever media or manner NFL Films . . . sees fit, provided, however, such use does not constitute an endorsement of any product or service."

In 2005, NFL Films produced "The Making of Madden NFL 06," a 22-minute long production that was shown on the NFL Network eight times in a three-day span leading up to the release of the video game.  The program included three sentences read by Mr. Facenda that were taken from earlier NFL Films' productions (although they were apparently digitally altered to make them sound more like the synthesized speech from a computer) that totaled 13 seconds of the program.

Mr. Facenda's estate sued the NFL for false endorsement under Section 43(a) of the Lanham Act and for unauthorized use of name or likeness under Pennsylvania state law.  Specifically, as to the former claim, the Estate alleged that the use of the sound recordings of Mr. Facenda's voice falsely implied that the Estate had agreed to endorse the video game.  The case was split into liability and damages phases and, upon cross-motions for summary judgment on liability, the District Court granted summary judgment to the Estate on both claims.

 In a 60-page opinion, the Third Circuit reversed the grant of summary judgment on the Lanham Act false endorsement claim and remanded for trial but affirmed the grant of summary judgment to the Estate on the state law right of publicity claim.

As to the Lanham Act claim, the Third Circuit first rejected the NFL's First Amendment defense, concluding that the production was commercial speech and therefore declining to reach the issue of whether the Court would adopt the Rogers balancing test that weighs the public interest in avoiding consumer confusion against the public interest in free expression (in other words, it addresses the collision of the Lanham Act with the First Amendment).

Turning to the substance of the Lanham Act claim, the only prong at issue was the "likely to cause confusion" prong as the NFL did not contest that Mr. Facenda's voice could be protected as an unregistered mark and that the Estate owned the "mark." 

The Third Circuit, however, was exploring new territory as it had yet to announce the legal standard applying to false endorsement claims under Section 43(a).  The District Court had used the traditional 10-factor test from Section 43(a)(1)(A) cases as modified for false endorsement cases used by the Ninth Circuit.  With some modifications, the Third Circuit agreed with the District Court's use of these modified factors in false endorsement cases.  The Third Circuit also rejected the NFL's contention that claims under Section 43(a)(1)(A) required proof of actual confusion distinguishing between claims brought under that section versus those brought under Section 43(a)(1)(B) for false advertising.  Ultimately, the Third Circuit concluded that there were issues of fact (such as whether the NFL intended to profit unjustly from the use of Mr. Facenda's voice in the program) that precluded summary judgment.

As to the state law right of publicity claim, the Third Circuit readily agreed with the District Court's grant of summary judgment to the Estate.  The Court then turned to what appears to have been the NFL's primary argument, namely, that copyright law preempts the Estate's right of publicity claim.

The Third Circuit found no express preemption under Section 301(a) of the Copyright Act, in part because Pennsylvania's right of publicity statute required an additional element beyond what is required for a copyright infringement claim, specifically, that Mr. Facenda's voice have "commercial value."

The Court then went on to discuss--at some length--whether the right of publicity claim was impliedly preempted by copyright law because it clashed with the NFL's right to exploit its copyright.  As with the NFL's First Amendment argument, the commercial nature of the program was its downfall.  Relying on the premise that rights of publicity claims involving use of the work "for the purposes of trade" such as in an advertisement should not be preempted (as compared to claims involving expressive works), the Third Circuit concluded that the nature of the NFL program (which it characterized as a promotional piece) suggested that implied preemption was inappropriate.

The Third Circuit next turned to the release Mr. Facenda signed concluding that it did not support a finding of preemption.  The question in cases involving a contract and advertising was whether the plaintiff collaborated in the creation of a copyrighted advertising product.  If the plaintiff did, allowing the plaintiff to assert a right of publicity claim for use of its likeness in advertising would conflict with the copyright holder's rights.  But such was not the case here, the Third Circuit concluded.  To the contrary, Mr. Facenda participated in creating films documenting NFL games (presumably expressive works), not an advertisement for a football video game and the release he signed specifically preserved his right of publicity with respect to endorsements.  Thus, no implied preemption and summary judgment on this claim was affirmed.

 

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UPDATE:  And since I'm on the subject of updates, in another "virtual world" case, a consent judgment recently was entered in the case of Eros, LLC v. Leatherwood, in which the plaintiff claimed that the defendant violated the Lanham Act and committed copyright infringement within the virtual world Second Life.  A copy of the Consent Judgment can be found here (PDF, 2 pages) and my earlier discussion of the case, including a copy of the plaintiff's complaint, here.

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William Patry at The Patry Copyright Blog sets the record straight on the history of copyright at the time of Lincoln.  The history buff in me says kudos for the fascinating history lesson.

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UPDATE:  After recovering a judgment of more than $575,000 on its copyright and trademark claims, Tekky Toys, the manufacturer of the no doubt charming farting doll "Pull My Finger Fred", successfully petitioned the Seventh Circuit for an award of attorneys' fees on appeal of that judgment.  Although the Seventh Circuit did find one portion of the fee request excessive (specifically, the claim that it took counsel 33.25 hours at $450 an hour to prepare the fee petition, which consisted of a six-page argument, three-page affidavit and computer-generated billing statements), it still awarded Tekky more than $70,000 in attorneys' fees.  The Seventh Circuit's attorneys' fee opinion in JCW Investments, Inc. v. Novelty, Inc., Case No. 05-2498, can be found here.

For the earlier discussion of the battle between Pull My Finger Fred and Fartman, see here.

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The Patry Copyright Blog provides a link to a fascinating video tracing the surprisingly long and involved history of a six second drumbeat.  Regardless of whether one agrees with the author's comments about sampling or the development of new forms of expression and the role of copyright law in connection with these new forms, the video offers an interesting look at sampling seen from the perspective of a single six second drumbeat.  The complexity of the issues surrounding sampling--both legal and cultural--have taken on special significance to me given the firm's representation of George Clinton, who has been described as one of the most sampled artists.

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Reading the introductory sentences in the Second Circuit's decision in Phillips v. Audio Active Limited, No. 05-7017, one might have thought that things did not bode well for the plaintiff, Peter Phillips, professionally known as Pete Rock:

"A plaintiff may think that as the initiator of a lawsuit he is the lord and master of where the litigation will be tried and under what law.  But if he is a party to a contract that contains forum selection and choice of law clauses his view of himself as ruler of all he surveys may, like an inflated balloon, suffer considerable loss of altitude."

But in the end, things could've been much worse for Pete Rock.

In Phillips, the musician Peter Phillips entered into a recording contract with Audio Active Limited/Barely Breaking Even ("BBE"), under which he agreed to produce no less than ten tracks and of which BBE would be the copyright owner.  The recording contract also provided that "[t]he validity[,] construction[,] and effect of this agreement and any or all modifications hereof shall be governed by English Law and any legal proceedings that may arise out of it are to be brought in England."  Phillips also signed a letter agreement that was attached to the recording contract, which stated that this letter agreement "shall be subject to the same laws and exclusive jurisdiction as the [recording contract]."

While Phillips was producing the songs under the recording contract, he recorded additional tracks which BBE and another recording company later sought Phillips' permission to release.  Phillips denied the request but BBE and others released the additional tracks anyway.  Phillips then filed suit against BBE and others alleging breach of the recording contract by BBE for failing to pay the second installment of an advance.  Phillips also asserted claims for direct and contributory infringement under the Copyright Act and related alternative state law claims for unjust enrichment and unfair competition based on the defendants' exploitation of the additional tracks created by Phillips.

Two of the defendants moved to dismiss Phillips' complaint on the ground that the recording contract's forum selection clause required Phillips to bring his suit in England.  The District Court agreed with the defendants, concluding that the forum selection clause was mandatory rather than permissive and that Phillips had failed to show that enforcing the clause would be unreasonable.  As to Phillips' copyright claims, the District Court held that the dispute concerning defendants' right to exploit Phillips' music was primarily contractual because defendants had acquired the music under the recording contract.
Continue Reading...

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Eros, LLC, self-described as "one of the most successful merchants doing business within the virtual world platform known as Second Life, has sued a fellow virtual world citizen John Doe, "a/k/a Volkov Catteneo, a/k/a Aaron Long," in a real world court, claiming violations of the Lanham Act and copyright infringement by the defendant in the virtual world.

According to the complaint, Eros--through the marketing efforts of its chief executive officer, known in Second Life as "Stroker Serpentine"--has made a name for itself within the virtual walls of Second Life by selling adult-themed virtual objects under the "SexGen" mark.  Shortly before filing the complaint, Eros filed both an application to register the mark for "scripted animation system utilizing a defined menu to actuate avatars within a virtual world accessed through a 3-dimensional virtual platform," and a copyright registration application for the computer graphics/animation.  Eros apparently promotes its products by advertising and conducting "promotional events" within "virtual adult/social themed clubs" in Second Life.

Eros claims that at least as of April 2007, the defendant began making and selling unauthorized copies of Eros's adult-themed virtual objects using the "SexGen" mark, misrepresenting the copies as authorized and legitimate copies created by Eros, which has resulted "in actual consumer confusion regarding the origin of the copies."

You can find a copy of Eros's complaint, filed in the Middle District of Florida, here.

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Opining on the apparently wild popularity of karaoke, the Sixth Circuit in Zomba Enterprises, Inc. v. Panorama Records, Inc., affirmed the District Court's conclusion that Panorama's infringements of Zomba's copyrights were willful, awarding $806,000 in enhanced statutory damages and awarding attorneys' fees to Zomba.  Panorama had been manufacturing and selling karaoke CDs since 1998, apparently without obtaining licenses for any of the songs it had released as part of its karaoke packages.  Notably, after receiving a cease-and-desist letter from another music publishing company, Panorama ultimately negotiated license agreements with that company.  But despite two cease-and-desist letters from Zomba, Panorama continued selling karaoke CDs containing Zomba's songs and did not obtain any licenses from Zomba.  Then, after entering into a consent order with Zomba after Zomba asserted 30 counts of copyright infringement, Panorama apparently breached the consent order within a week of its entry by resuming sales of CDs containing Zomba's songs.  Based on these facts, the Sixth Circuit readily concluded that "Panorama exhibited a reckless disregard for Zomba's rights" and that "Panorama's reliance on its fair-use defense was objectively unreasonable."

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Admittedly, this is not a new decision but an important one that I've intended to get to for some time.

The case, U.S. v. ASCAP, No. 41-1395 (S.D.N.Y., Apr. 25, 2007), arose when the parties--AOL, Yahoo!, RealNetworks and ASCAP--could not agree on a fee for a license to publicly perform ASCAP's repertoire of musical works in the applicants' online services.  The specific issue before the Southern District of New York on the parties' cross-motions for partial summary judgment was whether the downloading of a digital file of a particular song constituted a "public performance" of the song under Section 101 of the Copyright Act.

Parsing the definition of "performance" under the Act, which includes the terms "recite," "render" and "play," the Court concluded that "in order for a song to be performed, it must be transmitted in a manner designed for contemporaneous perception."  Distinguishing downloading from streaming, the Court agreed with the amicus curiae RIAA that the download of a music file more accurately constituted a mechancial reproduction of the copyrighted work in the form of a "digital phonorecord delivery" than a "performance" of the song.

Thus, although the Court did not foreclose the possibility that a transmission might constitute both a stream and a download, and therefore meet the definition of "performance," ultimately it concluded that the download of a digital music file does not, standing alone, constitute a "public performance" of the song under the Copyright Act.

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The Central District of California dealt a heavy blow to Carol Burnett's challenge to the Family Guy's parody of Burnett's "Charwoman" character, dismissing her claims for copyright infringement and violations of the Lanham Act without leave to amend and declining to exercise supplemental jurisdiction of her state law claims.

In an episode of the Family Guy entitled "Peterotica," the "family patriarch" entered a porn shop with friends, noting that the shop was cleaner than expected.  In response, one of the friends explained that "Carol Burnett works part time as a janitor" and the scene shifted for less than five seconds to an animated figure resembling Burnett's "Charwoman" character mopping the floor next to some blow-up dolls, a rack of "XXX" movies and a curtained room with a sign above it reading "Video Booths."  As the character mops, there was a "slightly altered version of Carol's Theme from The Carol Burnett Show" playing.  The scene then switches back to the "patriarch" and his friends after which the friends make two remarks relating to Carol Burnett and her parents.

Carol Burnett then sued for copyright infringement, violation of the Lanham Act, violation of California's statutory right of publicity and common law misappropriation.  In response, the defendant filed a motion to dismiss Burnett's claims, also bringing a motion to strike Burnett's state law claims under California's anti-SLAPP statute.

Although Judge Pregerson noted how "distasteful and offensive" the segment was to Carol Burnett, the Court had no difficulty concluding that the parody was protected fair use, which precluded both her copyright infringement and Lanham Act claims.  The Court did not, however, rule on the defendant's motion to strike Burnett's state law claims, instead choosing to decline to exercise supplemental jurisdiction over those claims and therefore denying the motion to strike as moot.

In concluding its opinion, the Court offered some comments on its view of the broader import of the case:

To some extent this dispute is indicative of just how far the "new media" has come from the "old media."  The old media harkens back to days when crude jokes and insensitive, often mean spirited, programing was perhaps found in live night club performances but was not present on television.  In the new media, any self imposed restraint essentially has been eliminated.  Public figures, such as Ms. Burnett, are frequent targets of parodies and crude innuendo.  As Ms. Burnett well knows, it takes far more creative talent to create a character such as the "Charwoman" than to use such characters in a crude parody.  Perhaps Ms. Burnett can take some solace in that fact.
However, the law, as it must in an open society, provides broad protection for the defendant's segment.

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Given the often staid practice of law, it's hard to resist a fart joke particularly when it appears in the context of a well-written, yet smartly funny discussion of, among other things, copyright law penned by Judge Diane P. Wood of the Seventh Circuit.

The dispute in JCW Investments, Inc. v. Novelty, Inc., No. 05-2498 (7th Cir., March 20, 2007) arose in the context of competing farting dolls.  On the one hand was Pull My Finger Fred, described by Judge Wood as a "white, middle-aged, overweight man with black hair and a receding hairline, sitting in an armchair wearing a white top and blue pants."  When you squeezed Fred's extended finger he, rather unsurprisingly given his name, farts and makes, according to the Seventh Circuit, "somewhat crude, somewhat funny statements" about his bodily noises.  On the other hand was Fartman, described as a "white, middle-aged, overweight man with black hair and a receding hairline, sitting in an armchair wearing a white tank top and blue pants."  As with Fred, when you squeeze Fartman's extended finger, he emits both farts and jokes about those farts, two of which jokes were the same as those cracked by Fred.

But unfortunately for Fartman, his farts and jokes were no laughing matter for Tekky Toys, the manufacturer of Fred.  Tekky Toys sued Fartman's maker, Novelty, Inc. for copyright infringement, trademark infringement, and unfair competition, eventually winning on all of the claims with an award of lost profits, punitive damages (under state unfair competition law) and more than $575,000 in attorneys' fees.

In affirming the judgment of the District Court, the Seventh Circuit dealt handily with Novelty's claim that the District Court had protected too much of Fred in the context of Tekky's copyright infringement claim, extending protection not only to the expression of the idea of Fred but also to the idea or common elements known as scenes a faire, which are "incidents, characters or settings which are as a practical matter indispensable or at least standard, in the treatment of a given topic."  The Seventh Circuit disagreed, concluding that it was not the idea of a "farting, crude man" that was protected but rather Tekky's particular embodiment of that concept in the form of Pull My Finger Fred.

It seems to me that Novelty had a tough row to hoe as its president apparently testified in deposition that when Novelty creates a new item, they "try to copy---or try to think of some relevant ideas" and further admitted that his idea for Fartman was based on Fred, whom he had seen in a showroom of a manufacturer of the Fred doll.

William Patry at The Patry Copyright Blog also has an interesting and thorough discussion of Pull My Finger Fred vs. Fartman.
Continue Reading...

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