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

Ashley Gasper is an adult movie actor performing under the name Jules Jordan and is the president and sole shareholder of Jules Jordan Video, which creates the videos in which Gasper appears.  Gasper and his company sued defendants for, among other things, copyright infringement and violation of his right of publicity in connection with 13 copyrighted adult DVDs Gasper alleged defendants had copied and sold.

These two claims went to trial and the jury returned a verdict in favor of Gasper and his company on both.  The trial court then granted defendants' motion for judgment as a matter of law in part, concluding that neither Gasper nor his company had standing to pursue the copyright claims.  But the court rejected defendants' argument that Gasper's right of publicity claim was preempted by copyright law.

The Ninth Circuit disagreed with the District Court on both questions.

As to the preemption issue, the Ninth Circuit concluded that the crux of Gasper's right of publicity claim is that the defendants reproduced and distributed the DVDs without authorization.  His claim thus fell within the subject matter of copyright and he asserted rights equivalent to those within the scope of the Copyright Act.  Gasper's right of publicity claim was therefore preempted by the Copyright Act.

As to the standing issue, the District Court had concluded that the adult movies were "works for hire" under the Copyright Act, that Gasper's company was the author of the works, and that Gasper therefore lacked standing to sue for copyright infringement.  The District Court also implicitly held that Gasper's company lacked standing because the copyright registration was invalid (presumably because Gasper rather than the company was listed as the author).

According to the Ninth Circuit, the issue hinged on whether the creative work was within the scope of Gasper's employment with his company.  The District Court apparently rejected Gasper's testimony on the issue as "concocted at trial."  But the Ninth Circuit found a fatal flaw in the District Court's analysis:

The problem with the district court's analysis is that JJV was a one-man shop.  Gasper was the sole officer, director, and shareholder of JJV, exercised complete control over it, and made all decisions concerning JJV and production of the films.  It was all Gasper all the time.  JJV as employer and Gasper as employee could certainly agree as to the scope of the employee's employment, and could agree that Gasper should retain all copyrights.  Since JJV was Gasper, JJV intended whatever Gasper intended, and if Gasper intended that his creative work be outside the scope of his employment with JJV, there was no one to disagree.

The Ninth Circuit also rejected the proposition that the mistake in listing Gasper as the author on the registration forms invalidated the copyright.

The Ninth Circuit thus held that the District Court erred in concluding that the movies were works for hire and reversed the District Court's decision invalidating the jury verdict of infringement.

The case cite is Jules Jordan Video, Inc. v. 144942 Canada Inc., No. 08-55075 (9th Cir. Aug. 16, 2010).

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Toys "R" Us came out the winner in a copyright infringement case brought by Baby Buddies over its pacifier holder (which attaches a pacifier to a baby's clothing via a tether).  Both Toys "R" Us' and Baby Buddies' pacifier holders consisted of a white plastic bear attached to a ribbon that forms an "X" shape behind the bear.  Baby Buddies' ribbon was aquamarine and Toys "R" Us' was light mint-green.

Toys "R" Us had sold the Baby Buddies pacifier holder but later decided to produce its own and hired a consultant to design several different holders.  The consultant later sent a copy of the Baby Buddies pacifier holder to a subcontractor with a note stating:

I need a new animal design.  The buyer likes this bear but I do not want to produce the same exact thing.  Can you please work on a similar design?

The subcontractor responded with pacifier holders featuring a bear as well as an angel, a duck, a bunny and balloons.

The District Court granted summary judgment to Toys "R" Us on two of Baby Buddies' three counts.  After separating the protectable elements from the unprotectable elements (the latter including the tether, the color of the tether, the clip attaching the holder to the baby's clothing and the bow) leaving only the plastic molded bear, the District Court concluded that there was no genuine issue of fact as to infringement.

The Eleventh Circuit affirmed the grant of summary judgment based on a similar analysis.  The court first concluded that the bear and bow were eligible for copyright protection although it ultimately held that the bow fell short of the admittedly low threshold of originality required for copyright protection.  As for the bears, after examining the features of the bears in minute detail, the court concluded that no reasonable jury could find that they were substantially similar.  (Pictures of the two pacifier holders are attached as exhibits to the court's opinion.)

The case cite is Baby Buddies, Inc. v. Toys "R" Us, Inc., No. 08-17021 (11th Cir. July 22, 2010).

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Despite years of litigation, that still appears to be an open question.

In an as always entertaining opinion written by Chief Judge Kozinski, the Ninth Circuit handed a big win to MGA Entertainment in its long-running battle with Mattel over the Bratz line of dolls.

The dispute has its origins in the idea of Carter Bryant for the line of Bratz dolls, which he pitched to MGA while still employed by Mattel, designing fashion and hair styles in the "Barbie Collectibles" department.  MGA liked the idea and Bryant signed a consulting agreement with MGA.  Bryant gave Mattel notice but before his employment ended, he provided preliminary sketches and prepared a preliminary sculpt for the Bratz to MGA.  MGA subsequently released the Bratz dolls, which apparently were a huge success.

When Mattel learned of Bryant's involvement with the Bratz, the lawsuits began.  Those consolidated proceedings were ultimately divided into two phases with phase 1 addressing ownership claims relating to the Bratz.  The present appeal dealt with equitable orders entered by the District Court at the conclusion of phase 1.  (Phase 2 was pending and would deal with the remaining claims.)

In phase 1, the jury found that Bryant thought of the "Bratz" and "Jade" names and created the preliminary sketches and sculpt while employed by Mattel.  Along with a finding that MGA committed three state-law violations relating to Bryant's involvement with the Bratz, the jury found MGA liable for copyright infringement and awarded Mattel $10 million in damages (compared to the more than $1 billion Mattel apparently had sought).

Based on these jury findings, the District Court entered equitable orders.  With respect to the state-law violations, the court imposed a constructive trust over all the trademarks, effectively transferring MGA's Bratz trademark portfolio to Mattel.  And with respect to the copyright claim, the court enjoined MGA from producing or marketing essentially all Bratz female dolls and any future dolls substantially similar to the copyrighted Bratz works.  "In effect, Barbie captured the Bratz."

The Ninth Circuit vacated the constructive trust imposed over all Bratz-related trademarks finding that it was overbroad.  The Ninth Circuit questioned whether Bryant assigned his "ideas" for the Bratz to Mattel under his employment agreement.  The agreement assigned "inventions" to Mattel which were defined to include a number of items but not specifically "ideas."  Although the agreement could be interpreted to include ideas, the Ninth Circuit concluded that the District Court erred in finding that it clearly covered ideas.  But the Ninth Circuit left the issue to be addressed by the trial court on remand because it vacated the constructive trust on other grounds.

The Ninth Circuit ultimately vacated the constructive trust on the ground that it was overbroad because it transferred the entire Bratz trademark portfolio to Mattel despite the fact that the value of the brand had been significantly increased by MGA's own efforts:

It is not equitable to transfer this billion dollar brand--the value of which is overwhelmingly the result of MGA's legitimate efforts--because it may have started with two misappropriated names.  The district court's imposition of a constructive trust forcing MGA to hand over its sweat equity was an abuse of discretion and must be vacated.

The Ninth Circuit also vacated the District Court's injunction on the copyright claim, which enjoined MGA from producing the Bratz dolls or any other substantially similar dolls.  The Ninth Circuit concluded that the District Court had erred in holding that Bryant's employment agreement with Mattel clearly assigned works made outside the scope of Bryant's employment.  Rather, because the agreement was ambiguous (stating that he assigned inventions created "at any time during my employment by the Company"), the issue should have been submitted to the jury.  That error was sufficient to require vacating the copyright injunction.

In light of its decision vacating the equitable orders and remanding for essentially a do-over, the Ninth Circuit also addressed MGA's appeal of the District Court's copyright rulings.  Specifically, the Ninth Circuit discussed the trial court's decision with respect to the scope of copyright protection afforded the Bratz sketches and sculpt created by Bryant (assuming for purposes of the discussion that Mattel owned those works).  In particular, the court focused on the distinction between an idea and a particular expression of an idea; the latter is protected by copyright while the former is not.

As to the doll sculpt, the Ninth Circuit concluded that the District Court had erred in affording broad protection to it and instead held that it was entitled to only "thin" protection against virtually identical copying.

As to the sketches, although the Ninth Circuit agreed with the District Court's conclusion that they were entitled to broad copyright protection against substantially similar works, it held that the trial court erred in failing to filter out all of the unprotectable elements of the sketches.  Specifically, the Ninth Circuit held that "Mattel can't claim a monopoly over fashion dolls with a bratty look or attitude, or dolls sporting trendy clothing--these are all unprotectable ideas."

Chief Judge Kozinski concluded the opinion with another Barbie reference:  "America thrives on competition; Barbie, the all-American girl, will too."

The case cite is Mattel, Inc. v. MGA Entm't, Inc., No. 09-55673 (9th Cir. July 22, 2010).

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The plaintiffs--Larry Montz (a parapsychologist) and Daena Smoller (a publicist)--alleged that in 1981, Montz conceived of a new reality TV show involving a team of paranormal investigators who would investigate and occasionally debunk claims of paranormal activity.  Between 1996 and 2003, plaintiffs alleged that they presented screenplays, videos, and other materials relating to the proposed show to representatives of NBC Universal, Inc. and the Sci-Fi Channel "for the express purpose of offering to partner . . . in the production, broadcast and distribution of the Concept."  Although the reps allegedly were not interested in Montz's concept, NBC subsequently partnered with others to produce a series called Ghost Hunters on the Sci-Fi Channel that plaintiffs alleged was based on their material.

Plaintiffs then sued alleging claims for, among others, copyright infringement and two relevant state law claims:

(1) that "by producing and broadcasting" Ghost Hunters, the defendants breached an "implied agreement not to disclose, divulge or exploit the Plaintiffs' ideas and concepts without the express consent of the Plaintiffs, and to share with the Plaintiffs . . . the profits and credit for their idea and concepts"; and (2) that the defendants breached the plaintiffs' confidence "[b]y taking the Plaintiffs' novel ideas and concepts, exploiting those ideas and concepts, and profiting therefrom to the Plaintiffs' exclusion."

Defendants moved to dismiss the complaint for failing to state a claim for relief.  The District Court for the Central District of California held that the plaintiffs' complaint alleged sufficient facts to state a federal copyright claim but that plaintiffs' state law claims for breach of an implied in fact contract and breach of confidence were preempted by federal copyright law.  The District Court therefore dismissed those state law claims with prejudice and without leave to amend.  Subsequently, the parties stipulated to voluntary dismissal of plaintiffs' copyright claim and thereafter final judgment was entered in favor of defendants.

Plaintiffs then appealed the dismissal of their state law breach of implied contract and breach of confidence claims (as well as the District Court's denial of leave to amend those claims) on the ground that they were preempted by the Copyright Act.

Because there was no dispute that the first condition for preemption was met (that the claim comes within the subject matter of copyright), the Ninth Circuit's inquiry was limited to the second condition:  that the rights asserted under the state law claim are "equivalent" to the exclusive rights of copyright owners under Section 106 of the Copyright Act.  The Ninth Circuit concluded that the breach of implied contract claim satisfied this second condition and was therefore preempted:

The gravamen of the claim is that the defendants used the plaintiffs' work, without authorization, to create (and then profit from) a new television program.  The rights asserted by the plaintiffs under the implied contract are thus equivalent to the rights of copyright owners under Section 106--namely, the exclusive rights to use and to authorize use of their work.

In so concluding, the Ninth Circuit distinguished a prior case that upheld a similar claim by differentiating between the nature of the implied contracts involved in the two cases.  In the case in which the claim survived preemption, the implied agreement allegedly involved an implied promise to pay for use of the idea whereas here the alleged implied promise was not to disclose, divulge or exploit the ideas and concepts without the plaintiffs' express consent.  Therefore, according to the Ninth Circuit:

Whereas the breach of the alleged agreement in Grosso violated the plaintiff's right to payment on a sale, the breach of the alleged agreement in this case violated the plaintiffs' exclusive rights to use and to authorize use of their work--rights equivalent to those of copyright owners under Section 106.

For similar reasons, the plaintiffs' state law breach of confidence claim suffered the same preemption fate as it was "not qualitatively different from a copyright claim."

Interestingly, just days after this opinion, the Ninth Circuit issued an opinion in Benay v. Warner Bros. Entm't, Inc. in which it affirmed summary judgment on a copyright infringement claim against the plaintiffs but reversed summary judgment to defendants on the plaintiffs' state law implied in fact contract claim.  A discussion of the Benay case can be found here.

The case cite is Montz v. Pilgrim Films & Television, Inc., No. 08-56954 (9th Cir. June 3, 2010).

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The Recording Industry Association of America (RIAA) brought suit challenging the decision of the Copyright Royalty Board, which sets the terms and rates for copyright royalties when copyright owners and licensees do not do so themselves. 

More specifically, the RIAA challenged the Board's decision with regard to royalty terms and rates for so-called Section 115 compulsory licenses under the Copyright Act.  Compulsory licenses allow "individuals to make their own recordings of copyrighted musical works for distribution to the public without the consent of the copyright owner."

As to those licenses, the Board institute a 1.5% per month late fee for late royalty payments and implemented a royalty rate structure for cell phone ringtones under which the copyright owners would receive 24 cents for every ringtone sold that used their copyrighted work.  The RIAA challenged both aspects of the Board's decision, claiming the decision was arbitrary and capricious.

As background, in 1996, the parties with an interest in compulsory licenses agreed to terms and rates for those licenses but also agreed that those terms and rates would expire in 10 years.  Therefore, in 2006, the Board instituted proceedings to set certain terms and rates to govern those licenses, the final determination of which were not published until 2009.  The RIAA's challenge to the Board's decision then followed.

The D.C. Circuit first noted that the Copyright Act requires the Board to balance four policy objectives when establishing reasonable terms and rates for Section 115 licenses:

(1) maximizing the availability of creative works to the public; (2) providing copyright owners a fair return for their creative works and copyright users a fair income; (3) recognizing the relative roles of the copyright owners and users; and (4) minimizing any disruptive impact on the industries involved.

With respect to the RIAA's challenge to the Board's imposition of a late fee, the D.C. Circuit readily disposed of each of the RIAA's arguments.

First, the court concluded that the Board appropriately considered market conditions when setting the late fee but was not required to adopt a fee that exactly matched the market rate.  Second, the court found that the existence of a right to terminate compulsory licenses for nonpayment did not negate the Board's authority to impose a late fee as the Copyright Act allowed for both.  Third, the court rejected the RIAA's argument that it was unreasonable to impose a late fee because it purportedly is uncertainty about what amount is owed to individual copyright owners of a jointly held copyright that causes late payments.  But, as the court noted, the regulations governing compulsory licenses provided a solution to that situation by allowing the licensee to satisfy its obligation by paying any one copyright owner.

The D.C. Circuit also rejected the RIAA's challenge to the structure of the cell phone ringtone royalty rate established by the Board on similar grounds.  The court concluded that the Board appropriately considered--but was not bound by--existing market rates for voluntary licenses.  And the court found that the Board considered the RIAA's claim that "plummeting" ringtone prices rendered the penny rate chosen by the Board inherently unreasonable and the RIAA had presented no basis to overturn the Board's decision on the issue.

The D.C. Circuit thus affirmed the Board's decision.

The case cite is Recording Indus. Ass'n of Am., Inc. v. Librarian of Congress, No. 09-1075 (D.C. Cir. June 22, 2010).

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Plaintiffs are various persons and entities who made their livelihoods by performing, distributing and selling public domain artistic works.  Plaintiffs brought this action challenging the constitutionality of the Copyright Term Extension Act and Section 514 of the Uruguay Round Agreements Act (URAA), the latter of which granted copyright protection to certain foreign works that had been in the public domain in the United States.  Somewhat more specifically, Section 514 restored "copyrights in foreign works that were formerly in the public domain in the United States for one of three specified reasons:  failure to comply with formalities, lack of subject matter protection, or lack of national eligibility."  As a result, the plaintiffs were either prohibited from using such previously public domain works or were required to pay cost-prohibitive licensing fees to the copyright holders.  (The Tenth Circuit's opinion gives a significantly more detailed description of Section 514.)

The District Court for the District of Colorado initially granted summary judgment to the government and on appeal, the Tenth Circuit concluded that the plaintiffs' challenge to the Copyright Term Extension Act was foreclosed by the Supreme Court's decision in Eldred v. Ashcroft, 537 U.S. 186 (2003).  In addition, although the Tenth Circuit concluded that Section 514 of the URAA had not exceeded the limitations of the Copyright Clause of the U.S. Constitution, it held that the plaintiffs had "shown sufficient free expression interests in works removed from the public domain to require First Amendment scrutiny" of Section 514.  The matter was thus remanded to the District Court to determine and apply the appropriate level of constitutional scrutiny to Section 514.

Upon remand, the parties agreed that Section 514 is a content-neutral regulation of speech thereby subject to intermediate scrutiny.  On cross-motions for summary judgment, the District Court granted the plaintiffs' motion, concluding that Section 514 was unconstitutional to the extent it "suppresses the right of reliance parties to use works they exploited while the works were in the public domain."  Both parties appealed: the government argued that Section 514 did not violate the First Amendment and the plaintiffs argued that the District Court had failed to provide all of the relief they had requested.

On appeal, analyzing Section 514 as a content-neutral regulation of speech, the Tenth Circuit reversed the District Court's decision, concluding that "the government has demonstrated a substantial interest in protecting American copyright holders' interests abroad, and Section 514 is narrowly tailored to advance that interest."

As to the importance of the government interest asserted, the Tenth Circuit had "no difficulty in concluding that the government's interest in securing protections abroad for American copyright holders" satisfied the applicable standard.  Section 514 secured foreign copyrights for American works, which previously had been unprotected, and thereby preserved the authors' economic and expressive interests.  The court noted that some estimated that billions of dollars were lost each year because foreign countries were not providing copyright protections to American works in the public domain abroad.

The Tenth Circuit also concluded that Section 514 was narrowly tailored to further the substantial government interest asserted.  The court cited evidence that foreign countries could be expected to provide only as much protection to American copyright holders as the United States would provide to foreign copyright holders and that some countries might follow the United States' example in that regard.  Thus, in order to secure the benefits to American authors for their works abroad, the United States needed to impose the same burden on parties like the plaintiffs in the United States that it sought to impose on such foreign parties abroad.  In short, "the benefit that the government sought to provide to American authors is congruent with the burden that Section 514 imposes on [so-called] reliance parties."

The Tenth Circuit thus reversed the District Court's grant of summary judgment in favor of the plaintiffs, concluding that "because Section 514 advances a substantial government interest, and it does not burden substantially more speech than necessary to advance that interest, it is consistent with the First Amendment."

The case cite is Golan v. Holder, Nos. 09-1234 & 09-1261 (10th Cir. June 21, 2010).

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Two brothers--Aaron and Matthew Benay--wrote and copyrighted a screenplay entitled The Last Samurai.  The Benays contended that the creators of the film by the same name copied their screenplay without permission.  The Benays sued, alleging copyright infringement and breach of contract under California law.  The District Court for the Central District of California granted summary judgment in favor of the defendants on both claims and the Benays appealed.

The Ninth Circuit affirmed the grant of summary judgment on the copyright infringement claim, concluding that the Benays had failed to establish sufficient similarity between the screenplay and the film once stripped of the elements not protected under copyright law.

Nonetheless, the Ninth Circuit reversed summary judgment to the defendants on the breach of an implied in fact contract under California law.  The court noted that "[c]ontract law, whether through express or implied-in-fact contracts, is the most significant remaining state-law protection for literary or artistic ideas" as other such protections had been preempted by federal copyright law.  But contract claims for protection of ideas have not been preempted because they allege an "extra element" that changes the nature of the action, namely, "the agreement between the parties that the defendant will pay for the use of the plaintiff's ideas, independent of any protection offered by federal copyright law."

The Ninth Circuit's decision reversing summary judgment on the breach of contract claim proved the truth of its statement regarding the continued importance of state contract law to the protection of ideas.  In implied-in-fact contract claims, the court applies a "substantial similarity" standard between the plaintiff's idea and defendant's production.  But notwithstanding the use of the copyright term "substantial similarity," the standard is broader in implied-in-fact contract claims in that it is not limited to comparison of elements protected under copyright law:  "Rather, because the claim is based on contract, unauthorized use can be shown by substantially similar elements that are not protected under copyright law."  Therefore, the Ninth Circuit's conclusion that the screenplay and film were not substantially similar for purposes of copyright infringement did not preclude a finding that they were substantially similar for purposes of an implied-in-fact contract claim under California law.

Ultimately, after comparing the screenplay and film, the Ninth Circuit concluded that they shared a number of similarities that were substantial for purposes of an implied-in-fact contract claim and therefore reversed the grant of summary judgment in favor of the defendants on that claim.

The case cite is Benay v. Warner Bros. Entm't, Inc., No. 08-55719 (9th Cir. June 9, 2010).

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The Ninth Circuit today answered a question that has split both circuit and district courts, namely, what it means to "register" a copyrighted work for purposes of Section 411(a) of the Copyright Act, which makes registration of a copyright a prerequisite to bringing an infringement suit.

The district court apparently followed what the Ninth Circuit referred to as the "registration approach," which concludes that a copyright is registered at the time the Copyright Office acts on the application and issues a registration certificate.

After examining the unhelpful language of the statute and guided by the broader context of the statute and its purpose, the Ninth Circuit rejected that approach in favor of the "application approach," which holds that a copyright is registered at the time the application is received by the Copyright Office.  Thus, the Ninth Circuit held "that receipt by the Copyright Office of a complete application satisfies the registration requirement" of Section 411(a).

In addition, following the Supreme Court's decision in Reed Elsevier, Inc. v. Muchnick, 130 S. Ct. 1237 (2010), the Ninth Circuit held that the district court erred in concluding that Section 411(a)'s registration requirement was a jurisdictional prerequisite to suit that deprived the court of subject matter jurisdiction.

The case cite is Cosmetic Ideas, Inc. v. IAC/InteractiveCorp, No. 08-56079 (9th Cir. May 25, 2010).

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Although the case does not warrant extensive discussion, the Second Circuit's opinion in Bryant v. Media Right Productions, Inc. is worth a passing reference if only for its discussion of an interesting, if perhaps not difficult, question of copyright law as it relates to statutory damages and albums.

Plaintiffs produced two copyrighted albums of music, each of which was comprised of 10 songs.  Plaintiffs were successful in proving that defendants committed direct copyright infringement of the albums but their share of the revenue from these sales was small however, apparently totaling only $331.06.

Presumably for that reason, Plaintiffs sought an award of statutory damages under the Copyright Act, which specifies a dollar range of damages to be awarded per work infringed and states that all parts of a compilation consists of one work.  Ultimately, the trial court awarded only $2400 in statutory damages, counting each album as one work.

Plaintiffs appealed arguing, in part, that each song on the two albums constituted a separate work because each song was separately copyrighted and the songs were sold individually.  The Second Circuit disagreed however, concluding that an album falls within the Copyright Act's "expansive" definition of compilation and therefore infringement of an album results in only one statutory damage award. 

The case cite is Bryant v. Media Right Productions, Inc., No. 09-2600-cv (2d Cir. Apr. 27, 2010).

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Oldcastle Precast, Inc. v. Granite Precasting & Concrete, Inc., No. CV10-00322 MJP, filed Feb. 24, 2010

Oldcastle Precast, Inc. designs and manufactures precast concrete products and does business under the trade name Utility Vault.  Oldcastle alleges, in part, that Granite Precasting & Concrete, Inc. infringed Oldcastle's copyrights in drawings contained in Oldcastle's "Utility Vault Catalog" and has used those drawings, designs and/or part numbers to successfully bid on numerous projects.  Oldcastle alleges claims for willful copyright infringement, breach of implied covenants, unfair competition under the Lanham Act, unjust enrichment, unfair and deceptive trade practices under RCW 19.86.010 et seq., and tortious interference.

A copy of the complaint, including exhibits, here (PDF, 54 pgs).

 

Blue Nile, Inc. v. Ideal Diamond Solutions, Inc., et al., No. CV10-00380 TSZ, filed March 8, 2010

Blue Nile, Inc., an online diamond and fine jewelry retailer, alleges that the defendants "willfully and egregiously" infringed Blue Nile's copyrights and trademark rights in its website content and BLUE NILE mark.  Blue Nile alleges claims for copyright infringement, trademark infringement, violation of the Anti-Cybersquatting Protection Act, common law unfair competition under Washington law, and civil conspiracy.

A copy of the complaint here (PDF, 20 pgs).

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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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