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Highlights of the 2013 Copyright Society Annual Meeting

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.

 

 

Product Manuals and Copyright

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.

New York Office

On the one year anniversary of Osterberg LLC, I’m pleased to announce the opening of a New York office at 112 West 34th Street, 18th Floor, New York, NY 10120.

2013 Substantial Similarity Shipped

I sent the 2013 update of Substantial Similarity in Copyright Law to the publisher PLI earlier this week.  This will be the tenth anniversary edition.  We’ve included more illustrations of the works at issue in the cases discussed, a significant revision of the chapter on useful articles, and more.  Look for it in on the PLI website and Amazon around May or June.

Work For Hire Part II – Scope of Employment

Following up on my last post concerning works made for hire, this post tackles the question: When is a work “prepared by an employee within the scope of his or her employment?”

The answer is determined based on common law principles as set forth in the Restatement (Second) of Agency. The three criteria are: (1) whether the work is of the kind of work the employee is employed to perform; (2) whether the work occurs substantially within authorized work hours; (3) whether it is motivated, at least in part, by a purpose to serve the employer.

When evaluating whether the work is of the kind the employee is employed to perform, courts generally have defined the scope of the employee’s work very broadly, holding that it encompasses work that is “incidental” to the employee’s work. Courts typically refer to comment b of Section 229 of the Restatement (2d) of Agency, which reads:

An act may be incidental to an authorized act, although considered separately it is an entirely different kind of act. To be incidental, however, it must be one which the servant is employed to perform. It must be within the ultimate objective of the principal and an act which it is not unlikely that such a servant might do. The fact that a particular employer has no reason to expect the particular servant to perform the act is not conclusive.

Applying that principle, one court held that software development work performed by a doctor employed as a research fellow was incidental to the work he was hired to do because his job description recited: “The fellows will acquire skills required to organize, administer, and direct a critical care unit, and to work effectively as a member of a multidisciplinary team.” The software, the court explained, helped organize and administer the critical care unit. In another case, a court found that computer programs developed by the supervisor of a quality control laboratory qualified as a work for hire because the supervisor was responsible for the organization and updating of the laboratory. The court held that “development of the computer programs was at least incidental to his job responsibilities because it was within the ultimate objective of the principal and an act which it is not unlikely that such a servant might do. ”

Of the three factors, the second, whether the work occurs substantially within authorized work hours, typically is the least important. Plenty of courts have found works created after hours to be works for hire. With respect to the third factor, it is important to remember that it is not necessary that the servant’s only motivation be to help his or her employer; the motivation only needs to be partial.

Work For Hire – Eligible Works

One commonly misunderstood aspect of IP law is the limited scope of work for hire. The broad concept of work for hire is that one can hire another person to create something, and the hiring party will own the copyright. What many layman and attorneys either do not realize or forget, however, is that unless the work is created by an employee as part of their job (the subject of my next post on this topic), only certain types of works can ever qualify as works for hire, and the list does not include many of the types of works most businesses typically hire outside personnel to create.

Most fundamentally, work for hire is strictly a creature of copyright law. It cannot ever apply to patents. If a business wants to own an invention, it needs to get an assignment.

Even with the respect to copyright, the class of eligible works is small. The list comes right from the definition of work made for hire in the Copyright Law. Here it is.

A “work made for hire” is— (1) a work prepared by an employee within the scope of his or her employment; or (2) a work specially ordered or commissioned for use as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas, if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire.

As one can see, the list does not include many things a business might hire someone outside to create, such as: software; advertising copy; a jingle or theme song; or a drawing or logo. Moreover, for even the permissible classes of works to qualify as works made for hire, there must be a written agreement.

When your business hires an outside source to create material for it, one should always be wary when someone proposes that the parties just execute a work for hire agreement. One must ask, can the work actually qualify as work made for hire? If not, you’ll need an assignment. Consider the type of work involved and if an assignment is required, get it.

In my next post I will discuss what it means to for a work to be prepared by an employee “within the scope of his or her employment.”

IP Licensing Checklist

Here is a general checklist of things to consider when licensing IP, in no particular order. If you spot any significant omissions, please comment.

1)    What precisely is being licensed?

2)    What will be the term of the license?

a)     any automatic renewal?

b)    options?

c)     fee changes in subsequent license periods?

d)    termination rights?

3)    What will be the fee?

a)     how calculated? flat fee? percentage of sales? gross or net?

b)    how often paid?

c)     what currency?

4)    What territory?

5)    Exclusive or non-exclusive?

6)    Licensee’s Rights and Duties

a)     Accounting

b)    Reporting

c)     Branding

d)    Training

e)     Updates

f)     Quality control

g)     Right to modify materials?

h)    Who owns licensee modifications?

i)      Any right to sublicense?

j)      Any right to assign license?

k)    Any sell off of any materials at the end of the term?

l)     Any minimum sales quota or other duty to exploit the IP?

m)  How will complaints be handled?

7)    Licensor’s Rights and Duties

a)     Warranties or Indemnities (duty to defend licensee?)

b)    Training

c)     Updates

d)    Provision of materials

e)     Trouble shooting?

f)     Right to inspect/monitor/approve product and/or marketing materials

8)    Choice of law, choice of forum, mediation or arbitration?

9)    IP registrations, how will they be handled?  Licensee acknowledges licensor’s IP?

10)  Who sues infringers?  If license is exclusive, will licensee have any right?

L.A. Printex v. Aeropostale III – Copyright Registration Errors

This third post discussing the L.A. Printex case concerns the effect of errors in copyright applications. The defendants sought summary judgment on the ground that L.A. Printex’s registration should be held invalid because its designs were registered as an unpublished collection, but included two designs that previously had been published.

The rule, however, is “inadvertent mistakes on registration certificates do not invalidate a copyright and thus do not bar infringement actions, unless the alleged infringer has relied to its detriment on the mistake, or the claimant intended to defraud the Copyright Office by making the misstatement.” The court held that the error did not invalidate the registration or render the certificate of registration incapable of supporting a copyright infringement claim. There was no evidence that L.A. Printex knew that the two designs had been published at the time it submitted its application for copyright registration, or that it intended to defraud the Copyright Office. Upon learning of its registration error, L.A. Printex corrected it. It filed an application for supplementary registration, communicated with the Copyright Office about the error through email and phone correspondence, and filed a second application for supplementary registration. Moreover, the Copyright Office’s decision to issue a supplementary registration after it was told of the two designs’ prior publication shows that the error was not one that “if known, would have caused the Register of Copyrights to refuse registration.

L.A. Printex v. Aeropostale – Part II Substantial Similarity

The Ninth Circuit’s opinion in the L.A. Printex case offers two useful insights with respect to the manner in which courts in that circuit are to evaluate substantial similarity. 

The first is a re-affirmation that a court should not evaluate the intrinsic test, involving a subjective comparison of the two works, on summary judgment.  The subjective comparison should be reserved for trial.  Court’s should only conduct the intrinsic test, the objective listing and comparison of similarities on summary judgment.

The second is the court’s actual application of the intrinsic test.  Here is an excerpt:

C30020 is a repeating pattern of bouquets of flowers and three-leaf branches. The idea of a floral pattern depicting bouquets and branches is not protectible, and C30020 has elements that are not protectible, for example the combination of open flowers and closed buds in a single bouquet or the green color of stems and leaves. However, L.A. Printex’s original selection, coordination, and arrangement of such elements is protectible. Because there is “a wide range of expression” for selecting, coordinating, and arranging floral elements in stylized fabric designs, “copyright protection is ‘broad’ and a work will infringe if it’s ‘substantially similar’ to the copyrighted work.” That is, “there are gazillions of ways” to combine petals, buds, stems, leaves, and colors in floral designs on fabric, in contrast to the limited number of ways to, for example, “paint a red bouncy ball on black canvas” or make a lifelike glass-in-glass jellyfish sculpture. Our comparison of Defendants’ allegedly infringing design and C30020 reveals objective similarities in protectable elements. Both patterns feature two types of small bouquets of flowers, one featuring the largest flower in profile view, the other featuring the largest flower in an open-face view, and both emerging from three buds. Both patterns also depict small, three-leaf branches interspersed between the two types of bouquets. The shape and number of the flower petals and leaves are similar in the two designs. The two types of bouquets are arranged at similar angles in both designs, and the bouquets and branches are coordinated in similar spatial combinations on a grid of similar scale and layout.  Moreover, the color arrangement of C30020 in white/berry is markedly similar to the color arrangement of Defendants’ design…The differences noted by the district court do not compel the conclusion that no reasonable juror could find that Defendants’ design is substantially similar to C30020. Rather, in light of the similarities described above, the differences support the opposite conclusion, that there is a genuine dispute of material fact on substantial similarity. It is true that the flowers, stems, and leaves in Defendants’ design are less detailed than those in C30020, and that Defendants’ design does not use multiple shades of color to give the flowers and leaves definition as does C30020. But a rational jury could find that these differences result from the fabric printing process generally and are “inconsequential,” or could credit Jae Nah’s assertion that these differences result in part from “print[ing] using cruder, lower quality techniques and machinery. Moreover, because we conclude that stylized fabric designs like C30020 are properly entitled to “broad” copyright protection, it is not necessary that Defendants’ design be “virtually identical” to infringe. A rational jury could find that despite some differences between Defendants’ design and C30020, the similarities in the selection, coordination, and arrangement of bouquets and three-leaf branches are sufficiently substantial to support an inference of copying. Accordingly, we hold that objective similarities in the expressive elements of Defendants’ design and C30020 present a genuine dispute of material fact under the extrinsic test.

If you don’t understand the intrinsic/extrinsic distinction, call me up or send an email.  I can probably confuse you even more.  Look for further discussion of this case, hopefully with pictures of the works in question, in the 2013 update of Substantial Similarity in Copyright Law.

 

L. A. Printex v. Aeropostale, Part I-Access

Widespread dissemination of a work sufficient to show a reasonable possibility of access can be confined to particular region and/or industry. That is one of the rulings in the Ninth’s Circuit’s recent decision in L. A. Printex v. Aeropostale.  This is the first of three posts about the case, each addressing a single aspect of the court’s opinion.

Most readers of this blog will know that in order to prove copyright infringement, a copyright owner must prove that the defendant copied the copyrighted work.  In most cases there is no confession, eyewitness or other direct evidence of copying, so plaintiffs typically prove copying by proving that the defendant had access to the plaintiff’s work, and that similarities between the plaintiff’s work and defendant’s suggest copying.

In the Aeropostale case, L. A. Printex claimed that Aeropostale and co-defendant Ms. Bubbles infringed L.A. Printiex’s copyright in a floral fabric design.  L.A. Printex asserted that defendants had access to the copyrighted print because it was widely disseminated in the Los Angeles fashion industry.  The Ninth Circuit agreed, writing:

L.A. Printex and Ms. Bubbles (Aeropostale’s wholesaler and co-defendant) operate in the same industry in the same Los Angeles area. L.A. Printex, a fabric printing company, sold more than 50,000 yards of fabric bearing C30020 to fabric converters. It is a reasonable inference that many or most of these purchasers were in the Los Angeles area. Apparel vendors like Ms. Bubbles purchase fabric from fabric printing companies and fabric converters. In addition, the dissemination of C30020 occurred over a four-year period immediately preceding Defendants’ alleged infringement. A reasonable jury could find that C30020 was widely disseminated in the Los Angeles-area fabric industry, and hence that there was a “reasonable possibility” that Defendants had an opportunity to view and copy L.A. Printex’s design…We hold that L.A. Printex raised a genuine dispute of material fact on access.