IP & Technology Law Blog

[hl-newyork]

Deepfakes - California Bill Takes Effect

Deepfakes are images, video, or audio edited to replace the person in the original work with another person. The technology can be beneficial when used in areas such as accessibility, education, and artistic expression. But, the technology seems more often used for unscrupulous purposes, such sexually explicit images and unauthorized use of an individual's likeness.

Jordan Peele famously made this convincing deepfake of Obama. And that was 6 years ago. The technology has become more available and convincing.

The E.U., U.K., and South Korea have legislation that specifically address deepfakes. The U.K. government also announced today that it plans to crack down on sexually explicit deepfakes. The U.S. has existing laws that may apply to deepfakes (e.g., prohibitions against the disclosure of intimate images) but does not have comprehensive federal legislation directly addressing the technology.

As a result, several states have passed their own laws. California, for example, recently passed Assembly Bill Number 2602, a first of its kind law in the U.S. that applies to digital replicas fixed on or after January 1, 2025.

Where most legislation addresses the distribution of deepfakes, this bill aims to ensure individuals are adequately informed and represented before contractually granting another person the right to create a digital replica of their likeness in lieu of the work of the individual.

Under the law, any contractual provision that permits the creation of a digital replica of an individual in place of the work of the individual must include a "reasonably specific description of the intended uses of the digital replica" or be used "consistent with the terms of the performance of services by the individual." The individual must also be represented by legal counsel or a labor union with collective bargaining terms that address the use of digital replicas.

The law is narrowly tailored with various exceptions to not prohibit other forms of artistic expression or violate the First Amendment.

Like U.S. privacy laws, we can expect states to take these measures until (and perhaps after) comprehensive federal regulation is in place.

[hl-newyork]

"A Recent Entrance to Paradise"...But Not Copyright

The U.S. District Court for the District of Columbia confirmed the "consistent understanding that human creativity is the sine qua non at the core of copyright ability" applies to works generated solely by AI.

The Plaintiff, Stephen Thaler, owns a computer system that he claims generated a piece of art on its own. Thaler sought to register the work for a copyright. Thaler listed the computer system as the author and argued, in part, that the copyright would transfer to him as the computer's owner. However, the Copyright Office denied the application because the work lacked human authorship and, accordingly, is not eligible for copyright.

The court affirmed the Copyright Office's determination, stating that "copyright law protects only works of human creation." While a photographer may own copyright in an image created with a camera, "copyright has never stretched so far...as to protect works generated by new forms of technology absent any guiding human hand."

A larger question to be answered is what level of human guidance qualifies as a work of authorship? Is it enough to prompt a system to create a work based on a format (e.g., write a RomCom script, paint a mountain)? Or, assuming the answer will be "it depends", which specific elements (e.g., tone, perspective, color) are determinative and, of those, which carry more weight than others?

Full Opinion here.

[hl-newyork]

What Happened to 5Pointz

In 2002, Gerald Wolkoff enlisted “aerosol artist” Jonathan Cohen to turn his Long Island City warehouses into an exhibition space for artists.  For years, artists filled the walls with aerosol art under Cohen’s leadership.  The site eventually became known as 5Pointz.

As the Court found, Cohen divided the walls into “short-term” rotating walls with works that would last for a few days or weeks, and “longstanding walls,” which were more permanent.  He also vetted the artists who’s works were featured in 5Pointz.

In May 2013, Wolkoff sought to demolish 5Pointz and build luxury apartments.  In response, Cohen sued under the Visual Artists Rights Act (“VARA”).  When his temporary restraining order expired, Cohen applied for a preliminary injunction, which was denied in a minute order on November 12, 2013.  At the time, the court informed the parties that a written opinion would follow.

However, that night, Wolkoff banned artists from the site, refused them permission to recover any work that could be removed, and began whitewashing the art.

VARA creates moral rights for artists, including the right of attribution (to be recognized as the author by name, anonymously, or pseudonymously), integrity (to prevent any deforming or mutilating changes to the work, even after title is transferred), and to prevent destruction of a work of recognized stature.  

Where a violation of VARA is established, the injured party may recover actual or statutory damages. If the violation was willful, the statutory damages may be awarded up to $150,000 per work.  

On February 12, 2018, the district court held that 45 works had achieved recognized stature, Wolkoff violated VARA by destroying them, and the violation was willful.  

The district court held, and the court of appeals agreed, that certain works in the 5Pointz qualified as a works of recognized stature in part because they “reflected striking technical and artistic mastery and vision worth of display in prominent museums if not on the walls of 5Pointz.”  Others, however, were not featured prominently, had not achieved long-term preservation, or were insufficiently discussed outside of 5Pointz.    

After analyzing several factors, the court also found that Wolkoff’s violation was willful, given his refusal to allow the artists 90 days to salvage their artwork, as required by statute, and his awareness of the ongoing VARA litigation.  In addition, Wolkoff’s affidavit in opposition to the preliminary injunction stated that the demolition had to be completed by the beginning of 2014, with construction beginning in April 2014.  However, at trial, he testified that he did not apply for a demolition permit until March 2014.  The district court stated that it would have granted the preliminary injunction if it was aware the demolition could be delayed until March.

The appellate court affirmed the maximum amount of statutory damages for the protected works: $6.75 million.

 Full opinion here.

[hl-newyork]

Maine vs. Hollywood for the Future of Television

The Maine legislature enacted a first of its kind regulation in the U.S.  It requires that cable operators allow subscribers to purchase channels and programs individually.  The law itself reads, in its entirety:

“Notwithstanding any provision in a franchise, a cable system operator shall offer subscribers the option of purchasing access to cable channels, or programs on cable channels, individually.”

Comcast brought a lawsuit and multiple companies, including Discovery, Disney, Fox, and Viacom have joined in the litigation.  They moved for a preliminary injunction and argued that the regulation violates the First Amendment and is preempted by the federal Cable Act.  

In determining whether to grant a preliminary injunction, the court considers (i) the movant’s likelihood of success on the merits of its claims; (ii) whether and to what extent the movant will suffer irreparable harm if the injunction is withheld; (iii) the balance of hardships as between the parties; and (iv) the effect, if any, that an injunction (or the withholding of one) may have on the public interest.

Most of the opinion discusses whether the plaintiffs are likely to succeed on the merits. Ultimately, the court holds that the plaintiffs are likely to succeed on their First Amendment claim because, based on the current evidence, the law cannot pass intermediate scrutiny.  On the other hand, the court holds that the plaintiffs are not likely to succeed on their preemption claim because at this time there is no express preemption or conflict preemption.  Specifically, federal regulation “was not intended to prohibit states from enacting content-neutral laws designed to lower prices and allow consumers to purchase only the programming they wish to view,” as the Maine law claims to do.  Moreover, the Maine law is constructed so as to not make compliance with the federal Cable Act’s must-carry requirements impossible.

This will be an interesting case to watch with potential major impact on the television industry. The regulation may be consumer friendly because individuals choose what they pay for.  At the same time, it could change the industry’s heavy reliance on cable bundles and, as many chord-cutters learn, a la carte content isn’t always cheap.  

Full court opinion here.

[hl-newyork]

Plaintiff not to “Cower” After Showtime Beats “Billions” Copyright Suit

Denise Shull, an author and performance coach, alleged that Showtime and its writers infringed her copyrighted work, Market Mind Games, as well as Shull’s style and persona.

According to the complaint, Shull’s book describes her “experience advising financial professionals, hedge fund managers, and Wall Street employers” based on her “insights into the psychology of hedge fund traders.”  The Billions creators also contacted Shull about the series, allegedly requesting “her assistance with the development of the female lead character, Dr. Wendy Rhoades.”  Shull was even introduced to the actress cast to play Dr. Rhoades.

Shull had the burden of proving that a “substantial similarity exists between the allegedly infringing work . . . and the protectable elements of the copyrighted work.” Substantial similarity may be established by showing that (i) a protected expression was copied and (ii) the amount copied is more than de minimis.

The court uses both the Discerning Observer Test (examining the similarities in such aspects as the total concept, feel, theme, and characters), and the Quantitative/Qualitative Approach (the copying is quantitatively and qualitatively sufficient to support infringement).  It finds that infringement does not exist because the book and the Wendy Rhoades character are not substantially similar under either test, and notably points to several elements mentioned in the complaint that amount to unprotected expression.    

On October 14, 2019, Shull said she would appeal the ruling:

“I help Olympic athletes hurl themselves down dangerous courses. I talk hedge fund managers through market moves that can lose them hundreds of millions of dollars. I help NASCAR pit crews perform faster in dangerous circumstances. I am not going to cower because my opponent is much, much bigger than I am.”

Full Opinion Here.

Denise Shull’s Statement Here.

[hl-newyork]

B.I.G. and Rita Defend Against the Last Poets

The Last Poets member, Abiodun Oyewole, alleged Notorious B.I.G. and Rita Ora infringed his copyright to the line “party and bullshit.”  

The Last Poets originally included the line in their 1970 song, “When the Revolution Comes.”  The song uses racial imagery to warn of an upcoming revolution.  It ends:  

“When the revolution comes afros gone be trying to straighten their heads/and straightened heads gone be trying to wear afros.

When the revolution comes, When the revolution comes, When the revolution comes.

But until then you know and I know n*****s will party and bullshit and party and bullshit and party and bullshit and party and bullshit and party

Some might even die before the revolution comes.”

B.I.G. used the line in 1993:

               “Dumbing out, just me and my crew/Cause all we want to do is

               Party and bullshit and/Party and bullshit.”

Rita Ora used the line in 2012, in a similar vain as B.I.G.  Each defendant raised a fair use defense in their motion to dismiss.  The 2nd Circuit affirmed and adopted the District Court’s fair use analysis.  

In determining whether the use of a work is fair, courts consider (1) the purpose and character of the use; (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.

Most of the court’s attention is on the first factor.  The critical question is “whether the new work uses the copyrighted material itself for a purpose, or imbues it with a character, different from that for which it was created.”

The court concludes that Rita and B.I.G. “transform the purpose of the phrase ‘party and bullshit’ from one of condemnation to one of glorification…in neither secondary work does it evince criticism or foreboding.

The analysis of the third factor is also notable.  Here, courts consider the amount of the work used as well as the quality and importance to the original work.  The district court holds:

"Party and Bullshit" and "Party" each use one phrase from "When the Revolution Comes." The Last Poets repeat the expression "party and bullshit" approximately four times at the end of their song, but they do not use it anywhere else. Moreover, although the background track's cutting out when the Last Poets chant "party and bullshit" adds a level of gravity and importance to the phrase, the expression is not critically important to the song's message. Instead, the song focuses on the upcoming revolution, describing what will happen and repeating "when the revolution comes." The criticism of those who "party and bullshit" reinforces The Last Poets' message that their listeners should prepare for and commit to the revolution, but it is not essential to that message.

Social commentary aside, this case is a good example of what is considered transformative.  It also provides insight on how courts may approach the often subjective task of determining whether a portion of a work has sufficient qualitative importance – this analysis arguably places a rough quantitative factor on determining the song’s message.

District Court Opinion

Court of Appeals’ Summary Order

[hl-newyork]

Reclaim the Copyright - Morricone Music v. Bixio Music

The Second Circuit recently examined a unique interaction between U.S. and Italian copyright law.

In the 1970s to 1980s, Italian composer Ennio Morricone entered into an agreement with an Italian music publisher, Bixio Music Group, to compose scores for six films in Rome.  Ennio is known for such films as De Palma’s “The Untouchables” and more recently Tarantino’s “The Hateful Eight.”  Ennio received 3 million Italian lire and limited royalties, and in exchange he assigned his rights to Bixio Music Group.  The assignment was governed by Italian law and stated, in relevant part:

“You do hereby grant and transfer to us, exclusively, for the maximum total duration permitted by the laws in force in each country in the world, and at the conditions established here below, all rights of economic use, in any country in the world, with regard to the works. …[T]he film’s soundtracks and its tapes, music, orchestrations, records, etc. are and shall forever continue to be the absolute and exclusive property of [Bixio] who shall be free to use them as [it] pleases at any time and in all Countries of the world.”

35 years later, Ennio sought to terminate the assignment under U.S. law 17 U.S.C. Section 203.

According to the statute, “in the case of any work other than a work made for hire, the exclusive or nonexclusive grant of a transfer or license of copyright or of any right under a copyright, executed by the author on or after January 1, 1978, otherwise than by will, is subject to termination…at the end of 35 years from the date of execution of the grant.”

Since the assignment was governed by Italian law, the court needed to analyze whether Italy had a comparable doctrine to the U.S. works made for hire rule.  The Court notes that Article 44 of the Italian Copyright Code provides that a composer of music in film is considered a “joint author” of the work and retains sole authorship of the score itself.

In the U.S., if a composer is commissioned as a “work made for hire,” the person who commissioned the composer is considered the author of the work from the time it is created.    

The Court holds that comparing the two statutory schemes would be an overbroad application of the “work made for hire” doctrine.  As such, there is no comparable doctrine and Ennio is permitted to terminate the assignment.

Producer’s (or artist’s) note: If a non-employee artist is commissioned – composer or otherwise – explicitly add (or omit) from a written contract that work performed is a “work made for hire.”  Without this language, in writing, the artist will be considered the author of the work they perform.

Side Note: This case is also a great example of European vs. US theory on copyright.  The general philosophy across Europe is that copyright should focus on the author. France, for example, believes the ultimate aim is the protection of authorship because, if one cannot own one’s own intellectual creation, what can one own?

The U.S. on the other hand, aims to “promote the useful art and science.”  As a result, the U.S. has a reward/incentive philosophy – reward the author with payment for a limited time, make other people want the same.

Opinion: Ennio Morricone Music Inc. v. Bixio Music Group LTD.

[hl-newyork]

Drop a Pin: Marshall Locksmiths v. Google

Interactive computer service providers are generally not responsible for content people post on their sites.  The 9th Circuit recently looked into part of what those providers can do with that content and still escape liability.

Fourteen self-described “legitimate” locksmith companies alleged that Google, Yahoo!, and Microsoft’s search engines publish content from “scam” locksmiths (websites, area codes, etc.) and also translate that information into map pinpoints in a way that constitutes new content.  They claim this “floods” search results with information on scam locksmiths, causing legitimate locksmiths to spend more on advertising.

The defendants claimed Section 230(c)(1) as an affirmative defense (more on §230 here).  

The 9th Circuit has a 3-prong test for whether §230(c)(1) mandates dismissal: “if (i) the defendant is a provider or user of an interactive computer service, (ii) the information for which the plaintiff seeks to hold the defendant liable was information provided by another information content provider, and (iii) the complaint seeks to hold the defendant liable as the publisher or speaker of that information.”

The parties agree only the second prong is at issue.  The locksmiths suggest that the search companies should be liable, in part, because they create “enhanced content that was derived from third-party content, but has been so augmented and altered as to have become new content and not mere editorialization.”  They’re referring primarily to map displays that pinpoint the scammer’s location even when there is, what the court describes as, “somewhat less-exact” location description. For example, a scammer’s website will have a 202 area code and state it provides service in the Washington, D.C. metropolitan area, which leads search engines to assign a location somewhere in Washington, D.C.  (Plaintiffs allege the assigned address may even change based on the user’s location). The user, in turn, believes there is a locksmith nearby.

The court holds that the defendants are still not information content providers because the pins are “constrained by the underlying third-party information” and the defendants use a “neutral algorithm” to make the translation.

The court clarifies §230 does not protect all information derived from third-party information.  However, this case is important because it allows for the inaccurate presentation of information.  Moreover, it permits translations as long as it’s constrained by third-party information and the method of translating is neutral, even if there are new, false/misleading details in that translation.  

Site: Marshall Locksmiths Inc., et al. v. Google, LLC, et al.

[hl-newyork]

SCOTUS: Bankrupt Brands Can’t Reject and Rescind TM Licenses

The International Trademark Association called this the “most significant unresolved legal issue in trademark licensing.”

Tempnology, LLC granted Mission Products Holdings, Inc. a non-exclusive license to use its “Coolcore” trademarked logos and labels, and an exclusive license to distribute certain Coolcore products in the United States.  Tempnology filed a petition for bankruptcy during the term of the agreement, and sought to reject the contract pursuant to the Bankruptcy Code and rescind the trademark license.  

Section 365(a) of the Bankruptcy Code states that a debtor (or trustee) may “assume or reject any executory contract.”  A contract is executory if performance “remains due to some extent on both sides.” Under the Code, a debtor’s rejection of such a contract constitutes a breach of the agreement, and the breach is deemed to occur immediately before the date of filing of the bankruptcy petition (Section 65(g)).  A Bankruptcy Court will typically give deference to the debtor’s business judgment.

The Bankruptcy Court granted Tempnology’s request to reject and rescind.  On appeal, the Bankruptcy Appellate Court did not allow Tempnology to rescind the license.  It followed the Seventh Circuit and held that the rejection constitutes a breach, and the breach of an agreement, even under Section 365(g), “does not eliminate rights the contract had already conferred on the non-breaching party.”  Instead, a rejection “converts a debtor’s unfulfilled obligation to a pre-petition damages claim.”  

The Court of Appeals for the First Circuit, however, disagreed.  As the Supreme Court’s opinion notes, the First Circuit reasoned that special features of trademark law counsel against allowing a licensee to retain rights to a mark after rejection because, if a licensee can continue using a mark after an agreement’s rejection, the licensor will need to continue its monitoring activities, which would frustrate “Congress’s principal aim in providing for rejection: to release the debtor’s estate from burdensome obligations.”  

The Supreme Court agreed with the Seventh Circuit’s “rejection-as-breach” approach, holding that “breach” is not specially defined in the Code nor a specialized bankruptcy term. To the extent the Code does not state otherwise, the court ruled generally that “a debtor’s rejection of an executory contract in bankruptcy has the same effect as a breach outside bankruptcy. Such an act cannot rescind rights that the contract previously granted.”  

The majority opinion doesn’t address how termination for breach provisions in certain contracts may affect or be effected by the rejection-as-breach approach.  It does note that Section 365 “does not grant the debtor an exemption from all the burdens that generally applicable law…imposes on property owners.”  It follows, then, that licensors may test the boundaries on drafting around this approach.

Mission Product Holdings, Inc. v. Tempnology, LLC (May 20, 2019).

[hl-newyork]

WGA Escalates Tensions to Litigation

On April 17, the WGA escalated its longstanding dispute with talent agencies over packaging fees by filling a complaint alleging breach of fiduciary duty and unfair competition.  Here is a detailed description of packaging fees.  In short, certain talent agencies, including WME, CAA and UTA, connects a showrunner with a writer, talent, and/or director to pitch a show to a studio/production company.  Instead of receiving 10% commission from its client, the agency negotiates with the studio/production company and the studio/production company pays the agency a share of a license fee, net profits, and modified adjusted gross receipts (referred to as 3-3-10).  

The WGA alleges that packaging fees harm writers because they divert financial resources from writers to agencies during the lifetime of the show, the writers’ profit participations are reduced, and agencies negotiate higher profit participations for themselves than their clients.

WGA further argues that there is a conflict of interest, given that the agencies’ compensation is tied to the show’s profits, which means that the agency makes more if their client is paid less.      

The agencies have not answered the complaint, but have previously stated that writers benefit from package fees.  UTA conducted a study that suggested its writers earn $3,374 more per episode on packaged shows on shows without a package. And, the WGA did agree to the use of package deals in a 1976 agreement with the Association of Talent Agents.  

It would (maybe will) be interesting to see how streaming services have impacted both the agencies’ use of package deals and what the writers receive from the deals, given that net profits and MAGRs are rare or lower on SVOD only platforms than they are in broadcast.

Full Complaint here

[hl-newyork]

Jumpman Pose Survives Copyright Infringement Claim - Rentmeester v. Nike, Inc.

Jacobus Rentmeester once asked Michael Jordan to pose like a ballet dancer.  The resulting pose is now one of the more recognizable logos in the world.  But, on March 25, 2019, the Supreme Court denied review of Rentmeester’s copyright infringement claim against Nike, allowing the 9th Circuit’s dismissal to stand and confirm just how difficult it can be to claim a photo was unlawfully copied. (Note: this issue involves one image replicating another, not Nike’s use of Rentmeester’s actual photograph.)  

In 1984, Rentmeester took a photograph of Jordan for Life Magazine based on ballet’s grande jete pose.  Rentmeester kept ownership of the photo, and granted Nike a limited license for $150 to use the photo “for slide presentation only” around the time Nike was preparing its partnership with Michael Jordan.  

Nike subsequently made its own photograph, which was “obviously” inspired by Rentmeester’s – similar angle, similar pose.  But, the Chicago skyline was in the background, Jordan wears apparel of his new team and is positioned slightly different.  Nike then based its “Jumpman” logo on the second photograph.

In January 2015, Rentmeester filed for infringement; pleading around laches by only claiming infringement during the Copyright Act’s three-year limitation period.  Nike filed a motion to dismiss.

The Court focuses on the extrinsic test, which “filters out” elements of the work that can’t be copyrighted – ideas, public domain material, stock/standard features, etc. For this point, the court notes that photographs are different from other works.  On one hand, film, for example, has many protectable elements that can be objectively compared, including plot, themes, and dialogue. Photographs, on the other hand, have objective elements, including lighting, composition, pose, and camera angle, which, like a photo’s subject matter, cannot be owned by a single photographer.  

For poses specifically, prior cases have noted that a pose itself cannot be copyrighted (think: a portrait or a stock photo of co-workers).  The court notes that the photographer “is entitled to protection only for the way the pose is expressed in his photograph: a product of not just the pose but also the camera angle, timing, and shutter speed.”  That “selection and arrangement” of otherwise unprotected elements, if sufficiently original, receives protection as a whole.  The court compares it to an author of a factual compilation who can claim protection for the arrangement but not the facts.

Ultimately, the court concludes that the works are not substantially similar, given that Rentmeester and Nike each made a series of creative choices in the selection and arrangement. Notably, Rentmeester does not have a “monopoly” on the concept of Michael Jordan in a leaping pose inspired by grand jete, and Nike’s photographer made choices regarding selection and arrangement that produced an image unmistakably different from Rentmeester’s photo in material details – disparities that “no ordinary observer of the two works would be disposed to overlook.” On that same basis, the court quickly notes, the Jumpman logo is also non-infringing.

Full Opinion: Rentmeester v. Nike, Inc.

[hl-newyork]

Section 230 & Unfair Competition - Taylor v. Twitter

Section 230 of the federal Communications Decency Act facilitates the interactive Internet. It states that “no provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”  

In other words, if someone makes a defamatory comment on YouTube, YouTube isn’t responsible.

The law also bars claims that “seek to hold a service provider liable for its exercise of a publisher’s traditional editorial function – such as deciding whether to publish, withdraw, postpone or alter content,” in part so that service providers may block and screen offensive material. (Barrett).  That helps Twitter, Facebook, YouTube, etc. in cases where (mostly pro se) litigants claim their content is targeted and removed.  Advocates say it’s critical in curbing trolls and hate speech.  Critics say it’s censorship.

Most courts interpret Section 230 broadly and such cases are quickly dismissed.  However, activists and large organizations attempt to plead around Section 230 by claiming First Amendment, negligence, and breach of contract violations.  These claims have also largely been dismissed, but in Taylor v. Twitter one judge criticized the broad application.  

The plaintiff, Jared Taylor, owns a publication called American Renaissance. Twitter suspended Taylor’s account because his posts violated Twitter’s terms of use.  Most of the claims were dismissed based on Section 230, but the Superior Court Judge Harold Kahn allowed an Unfair Competition Law (UCL) claim to proceed.  Subsequently, the appeals court directed the judge to explain his decision or dismiss the claim.  

On review Judge Kahn ultimately dismissed the UCL claim, holding that California state courts determine “the practical reality of what the plaintiff sought…rather than the way the plaintiff framed her case.”  But, the judge noted that the complaint against Twitter was not frivolous despite Section 230, given that multiple federal decisions support plaintiffs pleading around Section 230 and the Supreme Court may ultimately adopt the plaintiff view.  He (sarcastically?) explained:

“I went astray in believing until recently that the determinations of whether plaintiffs seek to hold Twitter liable as a publisher and whether plaintiffs’ UCL claim is based on Twitter’s speech or plaintiffs’ own speech are distinct inquiries. …I now realize that these seemingly different issues are actually the same issue, merely expressed in different language.“

That’s either a rare admission of error or an unsubtle way to follow precedent and guide the appellate courts.  

----

Section 230 (One may also recall the 2018 public debate around FOSTA and SESTA, which were congressional amendments to Section 230 intended to curb sex trafficking. They led to Craigslist removing its personals page, Facebook revised its Community Guidelines, etc.)

Barrett v. Rosenthal

Taylor v. Twitter

[hl-newyork]

Copyright Registration And Litigation - Fourth Estate v. Wall-Street.com

On March 4, 2019, the Supreme Court resolved a circuit split on copyright registration’s role in litigation. The Court held:

“Registration occurs, and a copyright claimant may commence an infringement suit, when the Copyright Office registers a copyright. Upon registration of the copyright, however, a copyright owner can recover for infringement that occurred both before and after registration.”

Justice Ginsberg’s full opinion here.

[hl-newyork]

Copyright and The Carlton

An earlier post mentioned the importance of the Supreme Court deciding whether copyright registration is a pre-requisite to filing an infringement suit.  This case shows how registration could save time and court resources.  

Alfonso Ribeiro recently brought a copyright infringement claim against the creators of NBA 2K and Fortnight over their use of the “Carlton dance” in the games.  In furtherance of that claim he filed an application to copyright the dance.

On January 22, 2019, the U.S. Copyright Office described the dance: “In the first dance step, the dancer sways their hips as they step from side to side, while swinging their arms in an exaggerated manner.  In the second dance step, the dancer takes two steps to each side while opening and closing their legs and arms in unison.  In the final step, the dancer’s feet are still and they lower one hand from above their head to the middle of their chest while fluttering their fingers.”

The Copyright Office refused to register the dance because it “is a simple dance routine” and not registerable as a “choreographic work” – one which the office defines as “the composition and arrangement of a related series of dance movements and patterns organized into an integrated, coherent, and expressive whole.”

Even if the dance were copyrightable, there would be additional questions as to who owns the copyright because it was created and likely originally fixated as part of NBC’s show.  

The Copyright Office’s refusal to register the work does not automatically end Ribeiro’s lawsuit – good news for Carlton fans.    

Re: The Dance by Alfonso Ribeiro – Variation B Ruling (Filed February 13, 2019).

[hl-newyork]

Actual Malice - McKee v. Crosby

On February 19, 2019, Supreme Court Justice Clarence Thomas wrote that the Court should reconsider the actual-malice standard in defamation cases.

The Court’s New York Times Co. v. Sullivan case in 1964 held that public figures may only recover damages for defamation after proving the statement was made with “actual-malice” – the knowledge of falsity or reckless disregard for the truth.  Public figures include politicians, celebrities, and “limited” public figures such as Katherine Mae McKee, the plaintiff in the Cosby case, because she disclosed her accusation against Bill Cosby to a reporter and put herself into the forefront of sexual assault allegations implicating Cosby.   

Actual-malice is a very difficult standard to meet and few public figures (including McKee) are able to make the showing.  The standard is meant to provide a balance between accountability for defamatory statements and freedom of speech made by critics of a public official’s conduct.

However, as Justice Thomas argues, the Court improperly “took it upon itself ‘to define the proper accommodation between’ [the] two competing interests.  “In short, there appears to be little historical evidence suggesting that the New York Times actual-malice rule flows from the original understanding of the First or Fourteenth Amendment.”   

While no other justice joined in Thomas’ concurring opinion, Thomas’ argument is noteworthy because the Court has more justices that tilt toward originalism.  It’s not unreasonable to wonder whether other justices agreed in theory but didn’t think it necessary or appropriate to comment without a case before them. 

New York Times Co. v. Sullivan, 376 U.S. 254 (1964)

McKee v. Cosby 586 U.S. ____ (2019) (Begins at page 45).  

[hl-newyork]

Trademarks and the 1st Amendment - Inacu v. Brunetti

On January 4, 2019, the Supreme Court agreed to hear Inacu v. Brunetti, a trademark case out of the Court of Appeals for the Federal Circuit. The primary issue is whether the government may prohibit federal registration of “immoral” or “scandalous” trademarks facially invalid. The mark at issue here is for the plaintiff’s clothing brand, “FUCT.”

The Federal Circuit held that the First Amendment protects private expression, “even private expression which is offensive to a substantial composite of the general public. The government has offered no substantial government interest for policing offensive speech in the context of a registration program such as the one at issue in this case.”

The Federal Circuit relied on a Supreme Court decision, Lee v. Tam. In Tam, the mark at issue was for a band name, “The Slants.” The Supreme Court unanimously held that trademarks are private, not government speech. Further, section 2(a)’s bar on the registration of disparaging marks discriminated based on viewpoint and “offends a bedrock First Amendment principle” that speech may not be banned on the ground that it expresses ideas that offend.

In its petition for a writ of certiorari the government argues, in part, that Tam doesn’t apply to immoral or scandalous marks (Tam did address racially “disparaging” marks). The government also argues that prohibiting the mark is not a restriction on speech because the individual is still able to use and enforce the mark without registration.

Inacu v. Brunetti Federal Circuit Opinion

Lee v. Tam Supreme Court Decision

[hl-newyork]

First Sale & the Digital Market – Capitol Records v. ReDigi

ReDigi is a technology company that sought to enable a lawful used digital music marketplace.  Multiple record companies sued ReDigi for copyright infringement.  The District Court held that ReDigi, in its then-current form, infringed the Plaintiff’s exclusive rights to reproduce and distribute by enabling the resale of digital files.  The Second Circuit agreed that ReDigi violated the record companies’ exclusive right to reproduce and, as such, did not need to rule on whether the distribution right was violated.

ReDigi’s technology is unique. They compared it to a train leaving from one station (the original purchaser) to another station (the ReDigi server and then the secondary purchaser), with each “packet” of data being a train car that collectively make up the entire song file. As each packet leaves the first station, ReDigi deletes it from the original purchaser’s device so that it no longer exists on that device and, accordingly, never exists in two places at once. In that light, ReDigi argued that the right to reproduce was not violated because it did not “copy” files from one user to another.  

The primary issue is whether ReDigi’s system falls under the first sale doctrine, which states:

Notwithstanding the provisions of section 106(3), the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord. (U.S.C. §109(a)). 

The Court held, however, that the first sale doctrine does not apply because ReDigi does make new phonorecords, in spite of its transfer process.  In other words, even if the right of distribution was not infringed, the right of reproduction was.    

Absent new technology, this case effectively strikes down the idea of a used digital music or used e-book market because transferring data, according to the Court, constitutes a reproduction of the work.  The Court makes clear that such an exception is for Congress to decide. 

---

The Court also rejected fair use, holding that (1) the reproduction was not transformative and did not add anything new, (2) the second factor is inapplicable, (3) the entire file is copied, (4) the marketplace is impacted because used digital files are identical to new digital files.   

Full Case: Capitol Records v. ReDigi