November 4, 2014
Fair use is a statutory defense to copyright infringement. The fair use statute, 17 U.S.C. § 107, suggests certain types of uses that generally may qualify as fair use, and identifies four factors a court must consider to decide when any particular use qualifies. The statute reads as follows:
Notwithstanding the provisions of sections 106 and 106A, the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include—
(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
(4) the effect of the use upon the potential market for or value of the copyrighted work.
Until recently, case law identified the fourth factor, the effect of the use on the potential market for the original work, as the most important. But in a 2012 case, Cariou v. Prince, the Second Circuit arguably shifted emphasis to the first factor, and particularly whether the new use qualified as “transformative” .
Cariou is a professional photographer who published an anthology of photographs of Rastafarians. Years later, the self-styled “appropriation artist” Prince, copied Cariou’s photographs and altered them to varying degrees to create a series of works of his own. The alterations ranged from wholesale changes that left Cariou’s images barely recognizable to mere pasting of colored ellipses over the subjects’ eyes. The district court found Prince guilty of copyright infringement ,but the Second Circuit reversed. The most significant factor in the Second Circuit’s decision was the court’s finding that many of Prince’s works were undoubtedly “transformative”, defined as “add[ing] something new, with a further purpose or different character.” The Second Circuit held that a number of the Prince works “manifest an entirely different aesthetic from Cariou’s photographs.”
A recent decision from the Seventh Circuit, however, suggests that emphasis on “transformativeness” may not take hold elsewhere. In Kienitz v. Sconnie Nation the Seventh Circuit pointed out that the Second Circuit approach risks interfering with one of the rights the Copyright Law grants to copyright owners: the exclusive right to create derivative works. Derivative work is defined in the Copyright Act as “a work based upon one or more preexisting works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other form in which a work may be recast, transformed, or adapted.” The Seventh Circuit asked, basically: what else is a derivative work but a transformative use of an existing work? The court wrote: “We’re skeptical of Cariou ‘s approach, because asking exclusively whether something is “transformative” not only replaces the list in § 107 but also could override 17 U.S.C. § 106(2), which protects derivative works. To say that a new use transforms the work is precisely to say that it is derivative and thus, one might suppose, protected under § 106(2). Cariou and its predecessors in the Second Circuit do not explain how every “transformative use” can be “fair use” without extinguishing the author’s rights under § 106(2). We think it best to stick with the statutory list, of which the most important usually is the fourth (market effect).”
These recent cases should cause parties analyzing their likelihood of success on a fair use defense to consider most carefully how they think they will fare on the first factor (purpose and character of the use, the factor in which courts consider whether a work is transformative) and the fourth factor (effect on the market). Once they decide that, they may then seek to gain advantage by steering their case to, or away from, the Second Circuit and its emphasis on “transformativeness.”
June 5, 2014
The 2014 annual supplement to our treatise Substantial Similarity in Copyright Law is now available from PLI.
June 5, 2014
This video from Perkins Coie is a helpful primer on inter parties review in the U.S. Patent and Trademark Office.
October 18, 2013
You’d better. If you don’t you’re going to screw it up. Earlier this year, Convolve lost a trade secrets case against Seagate and Compaq because the personnel involved either didn’t know or forgot what was in the NDA. The NDA required that in order to trigger any obligation of confidentiality, disclosed information must be: “(1) marked as confidential at the time of disclosure; or (2) unmarked, but treated as confidential at the time of disclosure, and later designated confidential in a written memorandum summarizing and identifying the confidential information.” Why they included the second provision is beyond me. In this post I wrote that it is important to have a bright line test concerning what is confidential because you don’t want to litigate whether about whether the information was appropriately identified. What does it mean for information to be treated as confidential at the time of the disclosure? Who is going to remember to send a memorandum and why would one want such a memorandum describing the confidential information to exist?
In any event, sure enough Convolve disclosed unmarked information in meetings and failed to follow-up with a written memorandum, and then sued based on alleged misuse of that information. Convolve lost summary judgment. Convolve tried to argue that, notwithstanding the words in the written contract, everyone knew the information at issue was confidential and marking wasn’t necessary. The Federal Circuit would have none of it. The court wrote: “the NDAs do not appear to be reasonably susceptible to the interpretation Convolve urges. Convolve’s assertion that the parties understood that all oral and visual disclosures were under the purview of the NDAs absent a written follow-up memorandum so stating is contrary to the terms of the NDAs. Thus, Convolve’s interpretation is unreasonable and would render paragraph 7 of the NDA a dead letter.”
September 26, 2013
A new article I’ve written, Copyright Litigation: Analyzing Substantial Similarity has just been published by the Practical Law Company. Think of it as Substantial Similarity in Copyright Law light. It discusses just the very basics of what you need to know when evaluating a copyright infringement claim. If you want detailed information, you still have to get the book.
August 28, 2013
Today at 12:30 Eastern, Eric Osterberg will be discussing A Business Owner’s Guide to Trademarks and Service Marks with Jaqueline Crosby on the Blog Talk Radio show Legalocity. The discussion will be useful for business owners and managers with questions about how to consider trademarks as part of their business planning.
July 1, 2013
The 2013 annual supplement to our treatise Substantial Similarity in Copyright Law is now available. It is a complete replacement of the entire text, so if you’ve fallen behind, now is an excellent time to update. It has now been 10 years since the first publication. Thank you to PLI and all who have contributed to its longevity.
June 11, 2013
Here of some highlights from today’s sessions at the annual meeting of the Copyright Society of the USA, Bolton Landing, NY June 11, 2013
Panel on Future of TV and Radio Copyright Litigation: Elenor Lackman, Bruce Joseph, Kelly Klaus, David Leichtman, Fritz Attaway
- David Leichtman gave overview stating with Sony
- Bruce Joseph suggest courts get deep in the weeds to understand he nature of technology and suggest that it really matters, is this a good thing? Every defendant raises fair use, courts ask what is the nature of the harm
- Kelly Klaus suggest services are being designed around judicial system, good guy bad guy matters in these cases, is this critical innovation or attempt to skirt copyright law
- Fritz Attaway suggests judges are often unfamiliar with new technologies and cases have been mostly correctly decided except Aereo
- Discussion of rights and wrongs of Cablevision and Aereo cases
- David Leichtman points out none of these cases have been tried
- Existing copyright remedy structure may not fit these cases, maybe we should be looking at those
- Fritz Attaway suggests man of the services at issues never got traction with consumers, consumers are mostly using services where copyright owners are getting paid and service providers are making money, that’s really what we want
Criminal Copyright Enforcement: Joe Demarco, Paul Doda, (Elsevier) Ed McCoyd (AAP), David Szuchman (NY County D.A.)
- Manhattan DA has cybercrime and identity theft bureau, work extensively with federal investigative agencies
- NY Failure to disclose origin of recording statute can apply, affects CDs and DVDs, associated laws make criminal manufacture, sale and operation of device
- NY statute prohibits unlawful use of secret scientific material, unlawful duplication od computer related material
- Advantages of criminal: deterrence, expanded resources, discovery advantages, additional charges
- Call DA sooner rather than later
- Pros: faster, cheaper, gov’t evidence gathering advantage, deterrence
- Cons: loss of control, no damages, fickle nature of gov’t priorities, inability to pursue civil actions or use criminal to coerce settlement
Panel Regarding Library Digitization of Books: Marybeth Peters, Jan Constantine (Authors Guild); Jack Bernard (U Michigan), Joseph Petersen, Ed Rosenthal
- Demo of HathiTrust website www.hathitrust.org
- Orphan works project has been abandoned for now because expensive and poorly implemented
- Discussion of advantages of digitization for the disabled and for preservation
- Debate concerning whether new legislation is needed or proper to analyze under existing structure as Supreme Court did in Sony
- HathiTrust is adamant that digitization project is fair use
June 10, 2013
Highlights from the first days sessions at the annual meeting of the Copyright Society of the USA, Bolton Landing, NY June 10, 2013.
Maria Pallante, Register of Copyrights gave an update on activities at the Copyright Office.
- Cell phone unlocking requirements will be continued, likely by reinstating recently expired exemption in the DMCA, although present DMCA exemption is not as effective as consumers think.
- Hearings regarding review and potential update of copyright law will begin in the fall, areas of interest are: (1) scope of exclusive rights; (2) updating exceptions and limitations; (3) first sale; (4) formalities; (5) orphan works; (6) mass digitization; (7) updating enforcement provisions; (8) review DMCA; (9) statutory damages; (10) small copyright claims; (11) educational use; (12) litigation reform; (13) a few other issues on a slide she went through too fast for me.
- Copyright Office Budget is 2/3 fees, 1/3 appropriations, Maria feels gov’t should pay, entire copyright system should not be funded by copyright owners because various stakeholder benefit, fees would increase tremendously; reserve fund is important.
- Copyright Office is reorganizing, adding senior positions: Director of Repositories; Director of Information and Education.
- Copyright Office is studying and making recommendations for updating Copyright Office technology and databases.
- Copyright Office Compendium III is coming.
- Copyright Office staff training lunches with market participants will be open to the publics
- Podcasting Nimmer 50th anniversary events, hoping to podcast more events, video will be up on Copyright Office site in 2 weeks
- Maria’s comments on the utility of reviewing the Copyright Act are available on the Copyright Office website: www.copyright.gov
There was a panel discussion on authorship and fixation, focusing on Chapman Kelley v. Chicago Park District (landscaping is not copyrightable)
- Hillel Parness of Robins Kaplan moderated, Chapman Kelley was on the panel, with Rob Kasunic of the Copyright Office, June Besek and Martin Schaefer
- Courts ruled against Kelley holding that he did not have a copyright in his landscape design, district court held that wildflower works were not original because natural; court of appeals said not fixed because perishable Hillel did a nice job using Monty Python and the Holy Grail to set the scene, clearly fair use and the highlight of the day;
- Discussion of the bowl of food case
- What about ice sculpture? Clearly perishable, subject to copyright?
- Books written by computer? The Policeman’s Beard
- Monkey takes a photograph, copyrightable? Does the author have to be human?
- Chapman Kelley offered the following. He is a painter. Wildflower works started as a way to make a larger painting than could be done on canvass. Live material v. dead material was an issue at trial. He paints on canvas with natural pigments, those degrade over time, so do all paints. Effect of decision on artists is that it has become a damper, artists feel this a limit on art.
- June Besek gave a historic overview of fixation and authorship issues.
- Rob Kasunic – courts are struggling with these issues, legislation not entirely clear, offered a number of works for consideration of issues of fixation and originality, would gardens be published or unpublished?
- Martin Schaefer – fixation typically not required in Europe, works of garden art specifically included in some countries, Russia for example, but not France or Italy, in Germany, moral rights applied to garden works.
Bob Clarida gave his annual update of last year’s copyright highlights. With respect to substantial similarity he discussed Blehm v. Jacobs and Harney v. Sony Pictures, both discussed and illustrated in Substantial Similarity in Copyright Law.
Making the Digital Deal, panel featuring Lisa Weiss, Stephen Dallas (Warner Chappell), Steve Englund, Elizabeth Moody (YouTube), Alexis Shapiro (The Orchard) focusing on key deal points in digital licenses
- Scope of grant of rights – defining authorized devices can be complicated, sublicensing rights to have use on third party sites, content owners still trying to limit rights granted to what is actually necessary, service like the Orchard needs to navigate both sides, threshold question is what exactly is the licensee doing and how may that foreseeably change, music publishers reluctant to give “all rights necessary”, service should know the rights it needs, don’t want to have to renegotiate every time service evolves, MDY v. Blizzard re: cheats, condition must go to one of the exclusive rights or involve payment, everything else is a covenant which only give rise to damages for breach
- Scope of content commitment – licensees want to know they’re getting as much content as competitors, limited exclusives short of most favored nations, if you want all content you have to promise to actively distribute all
- Holdback and takedown – negotiate takedown when licensor loses rights or if third party claims licensor does not have rights, need time frames for takedown, YouTube allows licensors to block user video
- Representations, warranties and indemnities – aggregator indemnifies licensed services, gets similar warranties and indemnities from its licensors, for startups can cap liability on indemnity but carve out crucial indemnities from cap, indemnity only as good as indemnitor
- Data reporting and sharing – seeking uniformity of reporting and maintenance of data, aggregate v. personally identifiable information, U.S. v. international, inconsistent reporting requirements is a problem
- Transcode – right to change into different formats
- Window – grant a right for a limited “window” of time
- Provide for what happens to digital files at the end of the term
There is no lobster dinner this year to the disappointment of many. Joe Salvo, President CUSA, took the blame and apologized. Barry Slotnick offered to bean him in the annual softball game.
April 22, 2013
Equipment manufacturers can gain a measure of control over distributors and repair shops by registering and enforcing copyrights in their product manuals. Notwithstanding their highly factual and utilitarian purpose, courts typically hold that manuals involve enough creativity to be copyrightable. Such creativity may be comprised of the wording of the text, the creative elements of photographs of the machine’s parts, or the selection, coordination or arrangement of the material in the manual. The Copyright Office willingly allows copyright registration of manuals, and by registering the manufacturer not only positions itself to sue competitors or unauthorized repair shops who copy the manual, the manufacturer gains the added advantage of a presumption that the manual is in fact copyrightable. Court challenges to the copyrightability of manuals generally have failed, even where the manufacturer is engaged in a regulated industry, such as the aircraft industry, and certain aspects of its manuals are required by government regulations.
Although the copyright in a manual does not prevent third parties from disseminating the facts contained in the manual, by gaining control over dissemination of the manual itself, the manufacturer makes it difficult for unauthorized personnel to access those facts. Manufacturers can strengthen their control by licensing their manuals to authorized distributors and repair shops only, and including in those licenses prohibitions on further copying or dissemination, or even limiting access to password protected Web sites, typically without running afoul of antitrust laws. Manufacturers can go even further by identifying information necessary for repair as trade secrets, and even further restricting its dissemination. Whatever degree of control the manufacturer chooses, exercising such control makes it difficult for unauthorized repair shops to compete with authorized ones, because the unauthorized cannot access the information needed to make the repairs without reverse engineering the product. That, in turn, may make licensed franchises more valuable, although it may ultimately harm sales because consumers will want to purchase products that can readily be fixed by numerous repair shops.
Manufacturers must make economic choices concerning the appropriate control to exercise over information necessary to repair their products. Copyright registration offers a cheap and easy way to enable reliable enforcement of that control. Manufacturers should consider sharply delineating versions of their manuals and securing copyright registration for each version.