Category Archives: Copyright

Escaping the Rune Realm Anti-Circumvention Patrol.

An argument lost, an opportunity renewed.  Way back, before online multiplayer games were so viral, copyright interests made comments against passage of the DMCA.  Particularly questioned were prohibitions on DRM circumvention measures, but the DMCA, with those prohibitions, was enacted by Congress.
Just filed is a case making a most interesting accusation under the DMCA.  Owners of the online game RuneScape® sued claiming damages from ‘bots’ and ‘scripts’ that allegedly “circumvent security measures” that the owners intended to “protect its copyrighted works.”  The suit is Jagex v. Impulse Software filed in federal court in Boston. http://bit.ly/8Y4a4a
Never played this game, so only the complaint and the news guide my thoughts.  One concern with adding a prohibition against any “technological measure that effectively controls access to a work protected” by copyright, was it might be extended to protect what is not protected by copyright. 
A fair difference can be seen between hacking in to use copyrighted, password-protected software [being bad], and modifying uncopyrighted software, which comes in a box with a copyrighted picture on it. 
In this new suit, there is no claim that the game software is copyrighted – rather, there are visual elements that are copyrighted – a “fish icon,” a “pickaxe icon,” etc.  That provoked the question whether the ‘bots’ let you access these icons, when the real gripe is access to uncopyrighted game routines.
A story in a London newspaper said one wondrous aspect of the game was that no special software was needed – it works within any browser.  Also, the complaint says that the software is “accessed using a web browser to interact with servers in” the UK.  That suggests that users “interact” with software resident on servers outside the territory of U.S. copyright, and so, unlike a player in the U.S. licensing downloaded game software to use.
One further observation is that the complaint enters that realm of infringement by contract – that any departure from ‘terms & conditions’ agreed to by users becomes transformed into an infringement of copyright.  A gameplayer agrees not to use bots or scripts to “gain an unfair advantage,” but the suit is not pleaded against the mighty horde of game players.  If a player cheats, the RuneScape masters remedy should be banishment from the realm.

The DMCA’s anti-circumvention prohibitions have gained strength in the few cases that have considered various “technological” measures to control “access” to copyrighted work.  We will have to think that this case will write a further chapter in the DRM gamebook.

Remember When You First Heard “Kick Out The Jams!”

Hey Forever 21 got sued, again, for copyright infringement – and it’s not over clothing design.
It is alleged in a L.A. Federal Court complaint that F21 made and sold clothing bearing a copyrighted photo of the [to some, legendary] rock band, the MC-5. Said photo, exhibit A to said complaint, was on the F21 garment “H81Rock-N-Roll Studded Top.” That’s rock and roll with a capitol N, and in caps MC-5 (Motor City 5).

Well-known rock icon photographer, Robert Matheu, intends to kick the jams out of that F21, H81 “Studded Top.” His photo, taken in the ‘summer of `69’ was not attached to the PACER copy, but it’s likely this photo on his website, http://www.robertmatheu.com/mc5-photo.htm. Matheu’s suit filing nearly coincides with the passing of another legend of Detroit hard rock, Ron Asheton of the Stooges. The filing is 2:2010cv0214-CAS (C.D. Cal.).  Rock on Ron.

Vive la Different Way of Co-creating.

The French court decided a design case by a petit-mains, which are seamtresses who present design samples to major fashion houses, hoping to secure a contract to purchase.  Basically, the court issued a split decision, granting both sides damages that nearly offset, and ruling for each side on some claims.  The case highlights how in IP, the ‘old ways’ used in design industries – working without contracts or copyrights – hit up against the modern, rights-based rules of IP ownership.

Press reports leave it unclear whether the court rendered a verdict, with some oral explanation, or also issued a written opinion on the claims and their disposition.  The backstory is that Carmen Colle, grew a firm of seamtresses in France, and her products were adopted in the several major fashion lines.  A crocheted sample was presented to Chanel, but her offer was not accepted.  Later, Colle saw a finished garment, incorporating her sample design, being sold in a Chanel store in Asia.  She called it to Chanel’s attention, but no resolution was reached.  She sued for counterfeiting her design, and for breach of contract. Chanel cut off business to Colle, and countersued for commercial disparagement (based either on the suit allegations, or more likely, public comments by Colle about the alleged taking of her original design).  The historic practice of not copyrighting the designs (allowed under French law), and not having an agreement setting out ownership rights or limits on use without attribution, left Madam Colle without much of a remedy in court.

Consistent with modern IP practice – “get it in writing” is the norm.  Sure, software writers, screenplay editors, collaborators, etc., still put their creative contributions in the hands of others to use, or refuse, and often without an expectation of specific remuneration.  Old way -> bad; written IP agreements – > often best.

The further points of interest are how Chanel’s pre-trial defenses fit or misfit with the verdict.  Colle’s counterfeit charge was tossed out, but the reasons are not clear.  In pre-trial comments, Chanel’s stated defenses were either that the design was the result of specific instructions it gave to Colle, and/or that Chanel had used a design that was ‘at the very least a product of collaboration’ by the parties.  The first of those often arises with software or screenplays – write me a routine that performs these functions, or a story which has these plot elements.  Both wind back to the question of who owns, or has any rights to the end product, where only one person wrote the work, but the other suggested the content.  The second of those defenses, joint ownership or collaboration, is more an acknowledgment of the uncertain nature of the relationship.  If both own, that is, own an undivided joint interest in the work, then one cannot appropriate from the other entirely, but neither must account to the other for gains made from a joint work.

Madam Colle believed that the exchange of designs, as a step to reaching an agreement, was understood as a matter of “honour and justice and noblesse.”  Her lawsuit, however, provoked Chanel to point out the lack of a copyright and of a written understanding about ownership and exploitation of the disclosed designs.  Again, the ‘old way’ is passing away, supplanted with the ‘rely on rights and writings’ approach now necessary to those in the creative industries.

Citizen Copyright Monitors

A recently-filed copyright case pleads that one of defendant’s employees called and reported that the single-user license for a subscription was being exceeded.  The plaintiff in Energy Intelligence Partners v. Fitch, publishes reports on the oil & gas markets.  Fitch, or someone there, subscribed to the reports.  The complaint, recently filed in Chicago, but earlier-filed in NYC, pleads the following:

…Plaintiff received a telephone call from an individual working in Defendant’s office informing Plaintiff of past, current and ongoing infringement of some of Plaintiff’s publications.

Ouch!  This sort of whistleblowing in copyright cases is not uncommon where single-user software is being used on multiple machines.  Seeing it pleaded in a case involving published and printed material suggests some interesting proof problems.  The complaint attaches specimens and registrations, but not a copy of the alleged single-user license.  Unless the reports were being copied wholesale and re-distributed, then what would prove infringment?  Whatever else is disovered, deposing the mystery telephone reporter should be interesting.

Twombly’s Alternatives Make Pleading Personal Jurisdiction Particularized.

The seeds of legal change often are found in unpublished, Circuit opinions. Among that mix are decisions interpreting, expansively, the Supremes’ remarks about adequate pleading in the Twombly and Iqbal cases. Serious parsing and explanations emerge when a panel decision extends the “plausible” requirement, without at the same time, implicitly amending federal civil procedure rules 8 and 9. Newly-defined pleading rules for personal jurisdiction over national distributors of infringing works are the seeds sown by a Sixth Circuit in Palnik v. Westlake Enter., 2009 WL 2707368 (6th Cir. August 31, 2009), a case over distribution of films that had an infringing soundtrack.

Without repeating here the elemental facts needed to sustain personal jurisdiction, it needs to be recalled that those pleaded facts are ‘taken as true’ when challenged by a Rule 12(b) motion. Then though, the plausibility inquiry kicks in. If the pleader opts for jurisdictional discovery, then that forfeits the advantage of the pleaded jurisdictional facts being favorably construed in the pleader’s favor. The Circuit panel ruled that Palnik didn’t plead enough facts, that what he did plead didn’t pass its plausibility test, and that Palnik never asked for jurisdictional discovery.

What was new in this case was the combined hurdles of pleading jurisdictional facts, with plausibility and with “reasonable particularity.” As best as research indicates, only the 6th and 3rd Circuits require jurisdictional facts to be pleaded with “reasonable particularity.” It’s not in Civ. Pro. Rule 9. But, those Circuits differ in the approach. The 6th makes it essential to the pleading, while the 3rd views particularity as a indicia of the need for jurisdictional discovery – even if that wasn’t requested. Consider C.J. Stapelton’s recent remark in dissent “I read ‘with reasonable particularity’ to mean that if a plaintiff suggests a realistic basis for believing that personal jurisdiction exists, he or she should be allowed to pursue discovery before having to prove that such jurisdiction does exist.” Metcalfe v. Renaissance Marine, Inc., 566 F.3d 324, 340 (3rd Cir. 2009), and Toys “R” Us, Inc. v. Step Two, 318 F.3d 446, 456, 65 U.S.P.Q.2d 1628 (3rd Cir. 2003). The 5th Circuit follows the 3rd Circuit on that approach. Cable Electronics, Inc. v. N. Amer. Cable Equip., Inc., 2009 WL 2382561 (N.D.Tex. Aug. 10, 2009).

The twist added in Palnik’s case derives from Twombly defining a “plausible” allegation as that which does not admits of two possible “alternative explanation[s]”. 550 U.S. at 567. When the well-pleaded facts support a persuasive, and perhaps likely, “obvious alternative explanation” to the pleaded facts, then that can defeat an assertion of personal jurisdiction as not “plausible.” That obvious-but-unfavorable notion seems hostile to construing facts in favor of the pleader, viz., if the allegations admit of two explanations, then doesn’t the pleader get the most favorable one? “Palnik’s complaint fails not because he lacked sufficient information to state the facts supporting jurisdiction or because the defendants leveraged their possession of information to hide the true facts, but because the allegations contained in his complaint were capable of multiple interpretations regarding the defendants’ involvement in the distribution of the film”.

A slap added to the twist was the panel’s suggestion that Palnik could have satisfied the “reasonable particularity” requirement by alleging the mots’ magique upon “information and belief,” and as enabled to do so  to the extent possible under Rule 11(b). “Palnik had his chance …and did not take advantage of it.” This suggestion seems to urge overstatement, in place of notice pleading – all in pursuit of singular interpretation and reasonable particularity (which aren’t in the rules).

The decision, albeit unpublished, comes from a distinguished panel, which suggests where the requirements to plead personal jurisdiction may be heading. It too raises concern because the Palnik case involved whether distributors of a film containing infringing music “caused it to be distributed to Ohio through a national or regional distribution contract,” and the reasonable particularity requirement came in a case involving internet commerce. These modes of distribution are likely to arise in most all cases, which today infrequently involve locally-based authorized distributors of products. These new layers of requirements come out, just when you’d been practicing long enough to think you were starting to understand that personal jurisdiction material presented in your first year of law school.

Colting Caught in the Rye, with Friends.

An expedited appeal to the 2nd Circuit {09-2878 by the author known as J.D. California} of the injunction against his unauthorized sequel to Salinger has garnered several amici, including some IP Law professors.  As briefs by amici-teachies tend to be, this one is a position paper on the fair use/transformative test and against a presumption of irreparable harm when infringement is likely.  In sum, it argues that a likely fair use defense must trump a presumption of non-economic harm if drawn from the likelihood that the derivative work infringes the original.

The profs challenges the presumption of irreparable harm, in sort of a say-it-ain’t-so manner. Where likely infringement can be shown, these learned amici had to acknowledge that many Circuit cases permit that presumption.  They stare down those decisions as being “no longer compatible with controlling law,” viz. MercExchange.  To stretch that incompatibility contention further, they cite a recent 5-4 Supreme Court decision on environmental policies and law, which I for one have a hard time believing translates to First Amendment and Copyright clause cases. Also, the reversal in that NEPA case was based on the 9th Circuit being “lenient” in displacing the “likelihood” of harm with the “possibility” of environmental harm. Winter v. NRDC, 129 S.Ct. at 375. Note too, that the majority in Winters never cited MercExchange, suggesting that IP and NEPA considerations are unrelated.

MercExchange regards whether a presumption of harm, appropriate in the pre-proof setting of a TRO, remains appropriate when all the evidence has been heard and liability adjudged.  MercEx said ‘no,’ and reversed the rule of automatic, permanent injunctions.  In the TRO setting though, the court is charged to assess likelihoods, use presumptions, and balance the four-factors.  The amici-professors argue that each factor is mandatory, and that a copyright owner must ‘win’ on each factor.

Also, the amici-professors argue, perhaps in a transformative or mash-up way, that the harm prong of the preliminary injunction assessment is trumped by the harm inquiry of the fair use defense.  The fair use inquiry “must take account not only of harm to the original but also of harm to the market for derivative works.” Campbell v. Acuff-Rose, 510 U.S. at 590.   Amici were dismissive of the opinion of Salinger’s agent about how much would be paid for the author to publish his sequel to “The Catcher.”  Mainly though, the contention is that the author’s exclusive right to create derivative works is overwhelmed by the potential worth of transformative works, “even if the new author is ultimately a poor craftsperson and fails to reach his or her audience.”  Even “poor” Derivation, if transformative, is assigned value.

In an argument that practically concedes that the to-be-commercialized derived sequel is, on a literary scale, substantially similar to the original, amici contend that it has fair use value as critical comment on the original author’s work.  Instead of a derived tale of a later-life Holden, the unauthorized sequel embodies a foundation of similarities over its root, subtextual commentary on Salinger’s work.  “Because of the widely recognized link between the book and its creator, however, it is particularly appropriate to repurpose Catcher to engage with the cultural relevance of its creator.”  That re-purposing is fine, when literati are waxing philosophically over glasses of wine, but to argue that commentary is commercially distributable and insulated from the copyright owner’s exclusive rights is a hard sell.

Rather than try to sum up the profs lengthy arguments about works that are “transformative,” suffice it to say this.  Definitionally, and perhaps legally, the term transformative connotes metamorphic changes, not a re-write or a do-over.  Transformative work cannot equate to plagiarized or substantially derived work.

Last, the amici-profs argue that Salinger’s rights as author and copyright owner were given too much worth, to the point that his statutory rights were equated to droit suite.  “By framing the question as one of Salinger’s interest in leaving his artistic vision untouched, the District Court imported moral rights concepts …[which] are not part of U.S. Copyright law.”  Plainly; but, to argue that a later-writer deserves a “right” to publish for profit a deriviative work, despite the author’s exclusive rights, is to elevate fair use to a moral right of that later-writer. 

In a contest between the author’s rights as the copyright owner, and the fair use protection for the writer of a derivative work, it’s less a matter of droit suite than a contest over who has the right to profit from the author’s original work.

I’m Sorry Dave, but copying this program into RAM is too important for me to allow you to jeopardize it.

In Quantum Sys. v. Sprint Nextel, 2009 WL 1931196 (4th Cir. July 7, 2009), the panel unpublished that they had followed the 9th Circuit’s MAI Sys. v. Peak ruling, which deems loading software into RAM the making a “copy,” which is “sufficiently fixed for purposes of copyright infringement.” Sprint had licensed Quantum software for “several hundred Sprint computers,” but then terminated the licenses. Thereafter, and still later after a settlement, Quantum had evidence that the software continued being loaded into RAM on less than nine Sprint computers, “when the computers were turned on or rebooted.” When this occurred, Quantum received “autoreporting” message, but the unlicensed software was not actually being used, rather the “software automatically loaded” and was not accessed.

Quantum called non-removal and each autoloading of the software an infringement of its copyright, to which Sprint rejoined that removal of the programs was not a requirement of the parties’ written agreements. Why not? Quantum also got past the defense, crafted from 4th Circuit precedent, that copyright infringement requires “volitional” conduct, viz., HAL 3000 can make you to an auto-infringer. One other practice pointer was the possible waiver of the attorney-client privilege due to in-house counsel’s affidavit in opposition to Quantum’s summary judgment motion. Two problems with that: potential waiver, and the magistrate allowed in-house counsel to be deposed “on a very limited basis.” Neither one is automatically fun.

Rather than enjoin those eight autoloading computers from doing their autoloads, the court adjudged Sprint liable for the $8,700 license fee, times eight. Of course, what with all these ads about ED, no not that, Electronic Discovery, there was sure to be a claim for attorneys fees larger than the damages awarded. Indeed, on top of the $69K in damages, the district court awarded $400K in fees and costs. The panel was “constrained to vacate” that $400K award because the reasons for it were not articulated. Noted too was the disparity between the fees/costs and the amount awarded as damages, and that the $69K in damages was “far less” than the $1M “originally sought.”  Sorry Dave, I’m afraid I can’t do that.

9th Cir. Cues The ‘Traveling Music’ for a Prevailing Copyright Party.

In reversing an award of substantial attorneys fees in a copyright case, a Ninth Circuit panel reversed another panel’s seventy-year old ruling about whether a voluntary dismissal without prejudice makes the defendant a “prevailing party.” In Cadkin v. Loose, 2009 WL 1813263 (9th Cir. June 26, 2009), the parties were trusts formed by two former musical collaborators, who composed “cues,” which are “short musical works used” in TV and films.
‘We’ll be right back after this message; cue my music, Billie!’

Although the Ninth Circuit’s ruling in Corcoran v. CBS had been followed by courts there and in other circuits, it was “clearly irreconcilable” with a 2001 Supreme Court case on Fair Housing Act fee awards. The panel in Cadkin ruled that the “dictionary definition” of a prevailing party that J. Rehnquist applied in Buckhannon v. W.Va., 532 U.S. 598, 603 (2001) signaled a change in the application of each statute using that term. The panel held that a voluntary dismissal of a copyright case, even after some of plaintiff’s claims had been lost or dismissed, where it dismisses voluntarily without prejudice, does not cause a “material alteration of the legal relationship” between the litigants. Thus, the party benefitted by the voluntary dismissal is not a “prevailing party.” It could be sued again on the same claims.

The late plaintiff, Emil Cadkin, also composed film scores, such as one for “The Killer Shrews” featuring dog-sized shrews run amok on an isolated island and starring Ken Curtis, b/k/a Festus on TV’s Gunsmoke. Cue that killer reel up on your NetFlix account, and see if the shrews or the islanders prevail.

Maybe Patent Agents Were Needed In Puerto Rico.

It’s a short trip from S. Florida to Puerto Rico, but what’s there to do there. You could stroll a white sand beach along Playa Brava, or spend eight hours at the Univ. P.R. – Mayaguez making an illicit copy of a standardized exam. The defaulting defendant in National Council of Examiners for Engineering and Surveying v. Cameron-Ortiz, 2009 WL 1674768 (D.Puerto Rico June 16, 2009) chose the latter.

To sit for the patent bar exam, the OED requires an engineering degree, or credit hours in pure sciences and math, and then, there are Category C applicants. To be Cat. C, an applicant must pass the FE exam, but that is not easy. Defendant Cameron-Ortiz may, or may not, have planned to spawn a horde of new patent agents, but she did sit for the FE planning to copy the entire test. As the decision notes, the exam proctors suspected copying, and “a search of her jacket and bag” found “recording and transmitter devices … sewn into the pockets of her jacket and her bag, including: (1) a wireless audio/video transmitter module with a built-in microphone, (2) a mini video camera, (3) a receiver, (4) a pocket video recorder, (5) a cradle used to connect to a TV or computer with audio/video input, and (6) two battery packs … to power the equipment …[which] allowed Cameron-Ortiz to copy, transmit, duplicate, and otherwise reproduce the contents of the exam.”

The FE exam is copyrighted, but not in the public domain, because of a regulatory exception for registering a “secure test.” 37 C.F.R. 202.20. As a consequence of the infringement, NCEES “retired one copyrighted exam form, and a portion of another copyrighted exam form.” Damages allowed by statute were based “upon the cost of replacing the test questions” which resulted in an award “total of $1,021,630.80 in actual damages, plus “costs and attorney’s fees.”

So, in this week of federal court awards of non-recoupable copyright damages, the RIAA leads the NCEES by several hundred thou.