Gone Fishing

IP Legal Watch is on hiatus while I update our copyright treatise, Substantial Similarity in Copyright Law.    I look forward to seeing those of you who will be there at this evening's meeting of the New England Chapter of the Copyright Society in Boston.

12 FOR 2012

Here is a link to the materials from last night's IP presentation at the Brewhouse.

Thanks to all those who came, and especially to those who helped close it down.

THE CASE FOR SOFTWARE VERSIONS, REGISTRATIONS AND RECORD-KEEPING

A recent case from the First Circuit underlines the utility, from a copyright perspective, of delineating versions of software, registering each version, and keeping copies. That is not always so easily done, because unlike other copyrightable works, such as a novel, software is never “done.” There is always another bug to fix, feature to add or compatibility issue to address. But to effectively employ copyright protection, it is a necessity.

The concern is proof. In order to prove infringement, the copyright owner must first prove what it is that is copyrighted, and that a copyrighted work was registered. That is generally simple enough, but with an evolving work, such as software, it becomes less so. That was the case in Airframe Systems v. L-3 Communications. In that case, Airframe accused L-3 of unauthorized copying of its software between 1997 and 2003.

The court’s opinion reports that Airframe had some pretty damning evidence, particularly a comment in the L-3 code that said “I do not know what this code is used for so I will leave it here anyway.” The problem was, Airframe did not have a copy of the software as it existed in those years and hadn’t registered a version during those years. Airframe attempted to prove infringement by comparing the L-3 code to an updated version of the Airframe software from 2009. The court held that without a copyright registration for the software as it existed during the years in question, and without a way of proving exactly which portions of the 2009 code were present in the version L-3 was accused of copying, Airframe could not prove infringement. The opinion reviews a number of cases in which copyright claims failed because of the plaintiff’s inability to prove the contents of the work allegedly infringed, and discuss the applicability of the best evidence rule in this context.

It seems that Airframe may not have registered any version of its software between 1988 and 2003. That is too long. Software developers and makers of other evolving works should anticipate the need to prove the state of their products at different times and take and register “snapshots” that will enable them to prevail when infringements come to light.
 

YOU CAN'T COPYRIGHT A BOWL OF FOOD

You can’t copyright a bowl of food; and you can’t copyright a garden. For those who may be wondering just where the outer limits of copyrightability lie, two cases this year identified material that is beyond those limits. In Kim Seng Co. v. J & A Importers, Inc., the court in the Central District of California held that a bowl of food is not sufficiently fixed to qualify for copyright. The court reasoned that a bowl of food could never be static because the food will necessarily perish.

Earlier this year, the Seventh Circuit wrestled with the fixation requirement in Kelley v. Chicago Park District. The art at issue in that case was a garden. Chapman Kelley designed and planted a wildflower garden in Chicago’s Grant Park, carefully selecting and arranging the flowers to achieve a particular effect when they bloomed. When the Chicago Park District reduced the size of the garden, Kelley sued for violation of the Visual Artists Rights provision of the Copyright Law, 17 U.S.C. 106A, contending that the Parks District impermissibly modified his work. The court held that the garden was not a sculpture or a painting, and did not qualify in any way as a “writing” that could be protected by copyright. The court explained “Simply put, gardens are planted and cultivated, not authored. A garden’s constituent elements are alive and inherently changeable, not fixed.”

Food for thought as you watch the next episode of Cake Boss.
 

BETTER COPYRIGHT REGISTRATIONS REQUIRED IN THE INFORMATION AGE

Copyright owners may now be filing more copyright applications because district courts in New York, Arizona and Alaska have ruled that registration of a compilation does not suffice to register the individual works included in the compilation unless the individual works and authors are specifically identified on the application. For new works, copyright owners should now register new works individually in addition to registering the compilation, or specifically identify each work and author on the compilation application.  For works previously included in a compilation registration, but not specifically identified, copyright owners must either seek individual registration or supplement the original registration. Prior to the three recent decisions, the Copyright Office had permitted, and based in part on that policy courts had allowed, that a single registration for the compilation sufficed to register the individual works included in that compilation regardless whether the individual authors and works were specifically identified.

I see the recent decisions as a product of the information age. The established rule was one steeped in practicality. It was cumbersome for owners to prepare applications, and for Copyright Office employees to file and catalog them. Searching was cumbersome, because one had to go to the Copyright Office to look through the catalog and review hard copy files. Access to deposit copies was restricted. As a practical matter, few were actually searching, and it seemed wasteful to require more burden and paper when a single registration would suffice in many instances.

Now we can now store, and find, almost everything online. Instead of having to send a person to the Copyright Office to look at paper records, one is increasingly able to get information online. And we expect that. We want to be able to access and search all information all the time. Now that logistical impediments to discovering information are being removed, we won’t tolerate faulty inputs. In particular for those who want to license, and therefore benefit from fast and complete access to comprehensive information about prior art, the modification of behavior certain to result from recent court decisions is a boon.
 

WHY FASHION ISN'T COPYRIGHTABLE

As debate continues about whether to extend copyright protection to clothing design, the recent decision in Jovani Fashion v. Cinderella Devine explains why clothing has been denied copyright protection, although fabric design has been protected. The issue is functionality. Even the clearly creative elements of clothing design are so interwoven (pun intended) with the clothing’s function that clothing design typically fails both the physical and conceptual separability tests.  The physical separability test, as its name suggests, concerns whether the creative elements literally can be separated from the utilitarian aspects of the work.  The conceptual separability test concerns whether one can conceive of the creative elements apart from the useful ones. 

 

If you are interested in further explanation of those tests and the copyrightability of useful articles, I recommend the Jovani Fashion case and cases cited therein, and Chapter 16 of Substantial Similarity in Copyright Law.
 

COPYRIGHT IDEA/EXPRESSION: TOWARD A BRIGHTER LINE?

A recent decision from the District of Connecticut in Scholz Design v. Sard Custom Homes holds that for architect to sue successfully for infringement of his drawing, the copied drawing must convey sufficient information to allow construction of the building depicted. In Scholz Design Because the allegedly copied drawings were not sufficiently detailed to enable one to construct a building using them, the court dismissed the copyright claims.

Of all the tricky issues in copyright law, one of the trickiest is distinguishing between idea and expression. Copyright law prohibits copying the expression but permits copying the idea. Determining where to draw the line between the two often involves a close judgment call. The Scholz Design decision arguably makes the call easier in the context of architectural works, because it offers a clear standard: information sufficient to allow construction. Copyright jurisprudence has, however, generally rejected such strict rules. It remains to be seen whether the Scholz Design decision signals a shift in the paradigm.
 

COPYRIGHT - DAMAGES BETTER, INJUNCTIONS WORSE

Copyright litigants would be wise to focus early on available infringement remedies in light of recent decisions. Following the Supreme Court decision in Ebay v. MercExchange and the Second Circuit Decision in the Salinger v. Colting case, litigants need to plan that they will need to prove irreparable injury to get an injunction, the presumption of irreparable harm is no longer available. That could make injunctions tougher to get in some cases. At the same time, litigants should plan that pre-judgment interest, dating back to the beginning of the infringement, is available based on the Third Circuit's recent decision in the Haughey case. Pre-judgment interest could significantly increase damages in certain cases.  So it might be harder to make 'em stop, but you might make 'em pay more.
 

A GOOD MUSIC COPYRIGHT RESOURCE

If you are interested in music copyright, check out UCLA Law's Copyright Infringement Project website.  Recordings and sheet music of the works at issue in some of the best known music copyright infringement cases are available for listening and viewing.  You can search by case name or song title.  The site also features a useful glossary of musical terms.

A FUN COPYRIGHT CASE TO LITIGATE

Does the new Olympic logo for the Rio de Janiero games infringe on one used by The Telluride Foundation? There was a story by Chris Chase on Yahoo! Sports yesterday comparing the two logos and also a painting by Matisse that has similarities to both.  If this one ends up in litigation it could be very interesting.

The works involved are below, Olympic logo first, followed by the Telluride logo and then the Matisse painting.  I think we can safely assume Matisse didn't copy from the other two, but what about the Telluride logo?  Is it based on Matisse?  Is the Rio Olympic logo more likely copied from Matisse or Telluride or neither?  What do you think?

Rio Olympic Logo

 


 

A FAIR USE NO BRAINER?

Copyright cases involving contentions of fair use tend to be among the most difficult to handicap. The vagaries of the four factor test (the purpose and character of the use, the nature of the copyrighted work, the amount and substantiality of the portion taken, and the effect of the use upon the potential market), and the fact that it seems almost no two fact patterns are ever the same,  often combine to create room for reasonable minds to differ.

How fun, then, to come across a no brainer.  A slam dunk, guaranteed loser for the accused infringer. Add to the mix a famous tweeting author and a misinformed, smart aleck defendant, and the inevitable result becomes all the more entertaining.

HarperCollins v. Gawker was just such a case. Last month, Gawker obtained a pre-release copy of Sarah Palin’s new book

and posted first 21 and then 12 pages of it on its Website without commentary or analysis. Governor Palin got wind of what Gawker had done, and reportedly tweeted “The publishing world is LEAKING out-of –context excerpts of my book w/out my permission? Isn’t that illegal?”, and complained to her publisher which, predictably, sued. One of the folks at Gawker got wind of the Governor’s tweet and, presumably before consulting Gawker’s counsel, reportedly posted on Gawker: “Sarah: If you’re reading this—and if you are, welcome—you may want to take a moment to familiarize yourself with the law. Try starting here or here. Or, skip the totally boring reading and call one of your lawyers. They’ll walk you through it.”

Turns out, the Supreme Court decided a case much like this one in 1985. The appropriate “really boring reading” is Harper & Row Publishers v. Nation Enterprises, 471 U.S. 539. In that case, the Court held that early publication by The Nation of 300 words of the soon to be released memoirs of President Ford, with analysis and commentary did not qualify as fair use. Not surprisingly, the district court HarperCollins followed the Supreme Court and entered a TRO requiring Gawker to take down the excerpts. The case settled shortly thereafter.

I invite to supply your own moral to this story. For me, it’s as simple as “smart aleck infringers provide entertainment for IP bloggers.”
 

Foreign Company Liable for U.S. Infringement Despite Shipping F.O.B.

For purposes of determining whether U.S. copyright law applies to sales of infringing goods to Unites States customers, the method of shipping is irrelevant. That is the holding in recent decision from the Northern District of Illinois in Zimnicki v. General Foam Plastics and Nixan Int’l.

Some readers of this blog may remember the difference between a contract that provides for delivery to a shipper “Free On Board” or “FOB” and delivery "Delivery Ex Ship" or "DES."  When goods are delivered FOB, title passes to the purchaser when the seller delivers them to the shipper at the port of departure, and the purchaser bears the risk of loss thereafter. In a DES contract, the risk of loss remains with the seller until the goods are actually delivered to the buyer at the port of arrival.  Perhaps the best news about the Zimnicki decision is that copyright lawyers can forget all this.

In Zimnicki, the copyright owner brought suit for violation of U.S. copyright against the both the U.S. distributor, General Foam, and the overseas manufacturer, Nixan. Nixan received the order in Hong Kong, manufactured the goods in Hong Kong, and then shipped them to Yantian China, where General Foam’s shipper shipped them FOB to General Foam in the U.S.  Nixan argued that it could not be liable for U.S. infringement because its only activity was in China, where title passed when the goods were shipped F.O.B.

The court rejected that defense, declining the invitation to exalt form over substance for fear that it would “encourage gamesmanship." The court held that the sale and delivery to the U.S. took place in one seamless transaction and constituted a distribution by sale in the U.S., regardless of whether title passed F.O.B.
 

Dead and Buried

LimeWire died this week. Enjoined out of existence like Napster, Grokster and Aimster before it. Its legacy is that it helped fuel contempt for the copyright law in a substantial segment of the population.

 Here’s what you will see if you go to the LimeWire site.

Legal Notice
This is an official notice that LimeWire is under a court-ordered injunction to stop distributing and supporting its file-sharing software. Downloading or sharing copyrighted content without authorization is illegal.


Good.
 

Delete the Musicologists

Interesting work going on at NYU’s Music and Audio Research Laboratory. They’ve developed software that graphs the various elements of a musical recording and then can compare each to any other recording. They’re working with NYU’s library to add the NYU collection to the musical database. There already is other software available that is capable of comparing digital audio files to determine if one sound recording is identical to another (useful in sampling and file sharing cases).

Until recently if one wanted to make this type of comparison, one would need to engage a human musicologist to perform a similar analysis, often using a privately assembled database to identify similarities among prior art. The tremendous potential utility of this software for music plagiarism litigation is obvious. Soon, our musicologists may be more statisticians than musicians.

A Good Read On Music Licensing

I finally had a chance to read the article in the New York Times Magazine about music performing rights societies (mostly BMI) and the people that work there, titled The Music-Copyright Enforcers. I found it entertaining and informative. It was published August 6.
 

How Fast Can I Sue?

If one discovers infringement of an unregistered copyrighted work, one needs to consider the forum of the potential infringement litigation to determine whether one can sue immediately after the Copyright Office receives the completed application, or must wait for the certificate to issue before suing.  The implications are obvious, particularly for one who wants to seek a TRO or preliminary injunction.

In Cosmetic ideas v. IAC/InteractiveCorp, the Ninth Circuit weighed in on whether the pre-litigation registration requirement in Section 411 of the Copyright Law requires that the Copyright Office actually register a work before one can sue for infringement, or it is sufficient for the completed application to have been received by the Copyright Office.  Courts have been split on this issue.  The Ninth Circuit opinion lists the courts in each camp.  Notably the Fifth and Seventh Circuits have held that submission of the application is sufficient, and the Tenth and Eleventh Circuits require issuance of the registration certificate. The Ninth Circuit held that submission of a completed application is all that is required.

Where this is likely to matter is in cases involving what one might call non-monetized copyrighted works, works that generally earn the author no direct revenue and therefore generally go unregistered, like this blog or maybe a sales brochure, flyer, catalog or Web page. It may not be worthwhile to register those as a matter of course, but if a competitor copies any of them, one might want to sue. 

Another Twist On the Copyright Law?

Interesting discussion from the Fox Rothschild Employment Group last week concerning employer searching of employee after-hour pager messages.  The alert highlights a recent Supreme Court decision concerning an employer's right to search such materials.

Privacy and fourth amendment issues aside, employers should consider taking steps to avoid copyright issues when performing such searches.  In many instances, the employee author might own the copyright in such writings.  If the employer copies or displays the message without employee authorization, wouldn't that be an infringement?  Couple that thought with last week's Ninth Circuit decision that delivery of a completed copyright application to the Copyright Office satisfies the pre-suit registration requirement (the subject of my next post), and this begins to look a little more real world.

A court might imply a permission to display or copy an electronic message by virtue of the fact that the employee created and stored the work on the employer's systems, but employers might be on safer footing if at a minimum they addressed copyright issues in their electronic communication policies.

A Faster End to Frivolous Copyright Infringement Cases?

Defendants in copyright infringement cases may find comfort in the Second Circuit’s recent decision in Peter F. Gaito Architecture v. Simone Development Corp. The Second Circuit blessed what has become an increasingly common practice in the Southern District of New York: that of dismissing copyright infringement cases in which the works are obviously dissimilar at the pleading stage, rather than requiring a trial or motion for summary judgment.

The case involved alleged infringement of an architectural design. The Second Circuit affirmed the district court’s decision dismissing the case based on the court’s comparison of the two works at issue, holding that such dismissal was proper because the absence of similarities in copyright protected elements made it impossible for the plaintiff to allege “substantial similarity” between the two.

Notwithstanding prior case law endorsing this approach, comparison of the works at issue on a motion to dismiss previously seemed to be of questionable legitimacy. The Second Circuit itself acknowledged that the question of substantial similarity is inescapably a question of fact. As a result, even where the case for infringement seemed weak, it seemed the more prudent course for defendants to answer the complaint and then seek summary judgment rather than moving to dismiss under Rule 12(b)(6).

Now, defense counsel should consider very seriously moving to dismiss immediately. The potential litigation cost savings for defendants could be significant. Inevitably, on the other hand, the process will be abused and defendants in cases that really do pose issues of fact will make frivolous motions to dismiss.

An odd aspect of the decision is the district court’s finding, repeated by the Court of Appeals, that certain of the similarities identified by the plaintiff concerned “generalized concepts and ideas that are common to countless other high-rise residential developments.” It is unquestionably proper to exclude ideas from the comparison because they are not protected by copyright, but then it should not matter whether such ideas are common. So why the reference to commonality? And how would one know at the pleading stage, and without expert testimony whether certain elements are “common to countless other high-rise residential developments?” A judge living in New York City may have significant exposure to urban architecture, but the determination of commonality would seem to require evidentiary support.
 

Design Patent Infringement- No Experts Please

There is some concern about a recent decision from the Southern District of Ohio in which the court, with little evidentiary analysis, relied on an expert opinion to bolster its own analysis that summary judgment should not be granted for the defendant because a jury could find infringement. Fortunately, a better view, that expert opinion should not be permitted on the issue of infringement, has been expressed in two other recent cases.

The test for determining infringement in design patent cases is the “ordinary observer” test, from the decision of the Supreme Court in Gorham Co. v. White 81 U.S. 511 (1871), more recently vindicated by the Federal Circuit in Egyptian Goddess v. Swisa, 543 F.3d 665 (Fed. Cir. 2008). The test as written by the Supreme Court is “if in the eye of an ordinary observer, giving such attention as a purchaser usually gives, two designs are substantial the same, if the resemblance is such as to deceive such an observer, inducing him to purchase one supposing it to be the other, the first one patented is infringed by the other.”

The Ohio court accepted the expert’s opinion that the ordinary observer would be deceived. That raises the obvious question “how could the expert know what an ordinary observer would think? He couldn't. That’s why the courts in HR U.S. LLC v. Mizco Int’l and Chef’n Corp. v. Trudeua Corp. excluded such testimony.

Excluding testimony concerning the ordinary observer test is consistent with the way similar issues are treated in copyright and trademark law. In copyright cases, expert testimony is not permitted on the issue of whether an ordinary observer would find the works in question “substantially similar.” Nor do we permit expert opinions concerning the “likelihood of confusion” of the typical consumer in trademark cases; we permit only surveys of actual consumers.


 

Think Before You Sue For Infringement of Marketing Materials

Copyright can be a effective tool for preventing competitors from copying a business’ marketing materials. Before asserting a copyright infringement claim, however, one should thoroughly understand the limits of what can be achieved in litigation, and the possible costs. Each year, when preparing the update for Substantial Similarity in Copyright Law, I am struck by the number of cases involving catalogs or brochures that seem to waste resources that could be better invested in improving the product or promoting it more effectively.

Damages caused by the copying of marketing materials are difficult to prove. Businesses typically generate their profits from sales of the products and services promoted, not from the marketing materials themselves. Tying any particular product sales, or lost sales, to such materials is often difficult. Whether one may recover attorneys' fees is a matter of the court's discretion, and by no means a certainty. That often leaves statutory damages as the only means of recovery. Statutory damages are limited to $150,000 even in the case of willful infringement ($30,000 in cases where deliberate copying cannot be proved). That may seem like a significant sum, but when one factors in the cost of legal services, and the cost of company employee time and effort, the result may be only a Pyrrhic victory.

In most cases, the defendant challenges the plaintiff’s copyright, alleging that the material lacks sufficient originality to be copyrightable, or was itself copied from other materials. Such a challenge can immediately put the copyright owner on the defensive, and require efforts from those involved in creating the materials to prove originality, disruptions the plaintiff may not have considered at the outset.

Some of the questions one should ask before bringing a claim for copyright infringement of marketing materials, in addition to the likelihood of success and the likely cost are: How much of the motivation for bringing the suit is real damage, as opposed to insult? Who can better withstand the cost and disruption of litigation? And, is it worth it if the recovery is less than the cost of litigation?
 

COPYRIGHT TERMINATION - WATCH OUT FOR WORK FOR HIRE

I predict a continuing stream of litigation arising from the termination provision of the Copyright Act in coming years. In extremely bold strokes, the termination law permits authors of works, or their heirs, to terminate any transfer or exclusive license within certain time periods after the date of the grant. To terminate, an author or his heirs needs to give a prescribed form of written notice to the grantee within a certain window of time. Affected parties may dispute the timing and sufficiency of the termination notice, as well as whether the work at issue is eligible for termination. Works made for hire are not subject to termination.

An example of the type of litigation we may continue to see in the eligibility category is Marvel Worldwide v. Kirby . That case looks like it could be a battle royale concerning whether Jack Kirby’s heirs can terminate Marvel’s rights in certain comics, with mega law firms on both sides.

The Kirby heirs contend that Jack Kirby is the author of certain comics published by Marvel. Kirby is known as the creator of the fantastic Four, X-Men and the Incredible Hulk. The Kirby heirs served termination notices purporting to end Marvel’s rights to publish the comics. The Marvel companies contend that the comics at issue are works made for hire, which would make Marvel the “author” and prevent Kirby heirs from terminating their rights.

Work made for hire issues are often fertile ground for litigation. Disputes concerning termination rights are just another context in which such disputes may arise. 

Connecticut Unfair Trade Practices Preempted

Connecticut, like many other states, decades ago enacted a "mini-FTC" Act, modeled after the federal law, 15 U.S.C. § 45(a)(1), prohibiting unfair trade practices. The Connecticut version is the Connecticut Unfair Trade Practices Act ("CUTPA"). Most states that have enacted such laws have either in the statutes themselves or in case law, narrowed their applicability to discourage unfair trade practice claims in ordinary business disputes. In Connecticut…not so much. As David Belt discussed in a Connecticut Bar Journal article roughly a year ago, assertion of CUTPA claims is commonplace in business litigation in Connecticut, and Connecticut seems to have more litigation by far concerning its state unfair practice laws than any other state in the country. CUTPA is particularly attractive to plaintiffs because it permits recovery of punitive damages and attorneys’ fees.

Recent cases remind us, however, that the preemption provisions of the Copyright Law and judicial interpretation of Article 4 of the Constitution with respect to the Patent Law restrict CUTPA claims in the intellectual property arena. The garden-variety patent or copyright infringement case (to the extent there is such a thing) cannot be asserted as a CUTPA claim. In a case decided this past October, RCE Nice Bearings v. Peer Bearing Company, Judge Vanessa Bryant of the District of Connecticut dismissed the plaintiff’s CUTPA claim insofar as it relied on accusations of wrongdoing pertaining to copyright infringement. Also this fall, Judge Stefan Underhill of the District of Connecticut dismissed, without prejudice, a CUTPA claim that he found did not include sufficient allegations beyond those necessary to prove patent infringement.

Unlike the copyright and patent laws, the federal trademark and unfair competition laws do not preempt state law claims based on similar facts.  Connecticut plaintiffs in trademark infringement cases can continue to include CUTPA counts in their complaints.  Diageo (maker of Johnny Walker Black Label) did that in a complaint it filed recently against the makers of the Johnny Barker Black Label product for dogs.

Courts have discretion in copyright and patent cases to award attorneys’ fees and increase damages. Before one asserts a CUTPA or other state unfair trade practices claim in a copyright or patent infringement case, one should expect that a motion to dismiss is possible.  One should weigh the likelihood and potential benefits of additional recovery of punitive damages and attorneys’ fees under CUTPA, against the potential costs and delays of such a motion.