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Mass Law Blog Update, Two Weeks Ending February 28, 2014

The week ending February 21, 2014 was a light week, so this week’s Update covers the two weeks ending February 28, 2014

  • 9th Circuit holds actress owns copyright in her individual performance, reverses lower court’s denial of preliminary injunction. Garcia v. Google (link). See blog post on this case here.
  • Utah federal district court issues preliminary injunction order against Aereo, limited to Tenth Circuit. Aereo’s first loss in court, although courts in California and the District of Columbia had enjoined FilmOn X, which provides retransmission of over-the-air broadcasting using the same technology. Communityy Television of Utah v. Aereo.
  • Southern District of Florida grants motion to dismiss in case alleging copyright infringement of architectural worksSieger Suarez v Arquitectonica
  • The USPTO has published more material relating to the Green Paper on Copyright Policy, Creativity and Innovation in the Digital Economy (link). A transcript of the December 12, 2013 public hearing is available here.  Post-hearing public comments are available here.
  • The Copyright Office’s announcement requesting comments and announcing a roundtable on the “making available” right for copyright holders has been published in Federal Register (link)
  • The U.S. District Court for the District of Minnesota has issued an injunction, under the authority of the Computer Fraud and Abuse Act (CFAA), against a defendant that allegedly broke into a company’s computer system and took confidential information. Reliable Property Services v. Capital Growth Partners.
  • The broadcasters have filed their initial Supreme Court brief in American Broadcasting v. Aereo (link)
  • Motion to dismiss action based on a DMCA takedown notice targeting a trademark (as opposed to a copyright, which is the only appropriate subject of a DMCA takedown notice), denied by N.D. Cal. court.  Crossfit v. Alvies (link)
  • Ninth Circuit finds no trademark infringement based on “trademark fair use.” Webceleb v. Proctor & Gamble (link).
  • Billboard reports on “Songwriter Equity Act,” which would update the factors considered by the Copyright Royalty Board when determining compulsory licenses for songwriters, composers and publishers (link)
Film Actress Uses Copyright in Her Performance to Force Youtube to Take Down a Movie

Film Actress Uses Copyright in Her Performance to Force Youtube to Take Down a Movie

An old legal saw warns that “hard cases make bad law.” The Ninth Circuit Court of Appeals decision in Garcia v. Google may be a good example of this maxim.

The issue facing the Ninth Circuit was whether an actress can claim a copyright interest in her performance in a film and, if so, under the unusual circumstances in this case, whether the actress could use that copyright to compel Google to remove the film from Youtube.

The facts in this case were very hard. The plaintiff, Cindy Garcia (pictured on left) was paid $500 to act in an independent film for a few days. She was told she was acting in an adventure film set in ancient Arabia. However, the film turned out to be an anti-Islamic movie, and her voice was overdubbed so that she appeared to be asking, “is your Mohammed a child molester?” The movie, titled “Innocence of Muslims,” let to a fatwa, and Garcia received death threats.

Screen Shot 2014-02-26 at 9.11.15 PMAfter Youtube (owned by Google) refused Garcia’s request to takedown the film (rejecting multiple DMCA notices from Ms. Garia), she brought suit for copyright infringement, make a novel legal argument. Rather than arguing that the film was a joint work under copyright law (which might have entitled her to a share of profits, but wouldn’t have achieved her goal of forcing Youtube to remove the film), she  argued that she retained a copyright interest in her contribution. Calling this “a rarely litigated question,” Chief Judge Alex Kosinski, writing for a divided 3-judge panel, avoided the question whether Garcia qualified as a joint author of the film (it seems clear that, under Ninth Circuit precedent such as the Aalmuhammed case, she would not). Instead, he wrote that “nothing in the Copyright Act suggests that a copyright interest in a creative contribution to a work simply disappears because the contributor doesn’t qualify as a joint author of the entire work.”

The opinion concludes that Ms. Garcia may claim a copyright interest in “the portion of the film that represents her individual creativity.”

The court rejected Google’s argument that Ms. Garcia’s performance was a work made for hire (she was not an employee), or that she had granted the filmmaker an implied license (her participation had been induced by fraud, precluding that argument). And, Ms. Garcia had never assigned her rights to the filmmaker in a written document.

Lastly, the court found that Ms. Garcia had suffered irreparable harm (“death is an irremediable harm, and bodily injury is not far behind”), and that she had satisfied the causation requirement. The court “rejected Google’s preposterous argument that any harm to Garcia is traceable to her filing of this lawsuit.”

The district court had denied an injunction, which the Ninth Circuit reversed, ordering Youtube to take down all copies of “Innocence of Muslims.”

It’s difficult to predict whether this case will be a significant legal precedent. The idiosyncratic facts were sympathetic to Ms. Garcia, who appears to have been the victim of a fraudulent filmmaker, and who suffered unusual harm as a consequence. However, independent of these facts, the Ninth Circuit has held that an actor or actress owns an independent copyright interest in a film performance, reminding every non-fraudulent film producer to obtain a written copyright assignment from every performer.

Garcia v. Google, Inc. (9th Cir., February 26, 2014)

Second Circuit Holds Copy of Swatch Earnings Call Protected by Fair Use, Dodges “Simultaneous Transmission” Issue

Second Circuit Holds Copy of Swatch Earnings Call Protected by Fair Use, Dodges “Simultaneous Transmission” Issue

[Catch-up Post] In an unusual application of the copyright fair use doctrine, on January 27, 2014, the Second Circuit held that Bloomberg’s copy of an investor conference call by Swatch was protected from copyright infringement under the fair use doctrine.

The facts are unusual. Swatch transmittd, recorded and promptly registered the copyright for a 2011 earnings call. Bloomberg recorded the call separately. Swatch claimed that Bloomberg’s recording infringed Swatch’s recording.

Although, technically speaking, Bloomberg did not copy Swatch’s copy of the call (it recorded it simultaneously, an issue I’ll return to below), the district court judge based his decision of non-infringement on fair use and the Second Circuit affirmed.

Analyzing fair use utilizing the four statutory fair use factors,* the Second Circuit held that Bloomberg’s purpose was to deliver important financial information to investors, and that this was analogous to news reporting, an activity often favored under the fair use doctrine. The fact that Bloomberg’s reproduction was not transformative was not an obstacle to a finding of fair use since, as the Second Circuit said, cases of news reporting favor “faithfully reproduc[ing] an original work rather than transform[ing] it.”

*note: Abbreviated, the factors are (1) the purpose and character of the use;(2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used; and (4) the effect of the use upon the potential market fo the copyrighted work. 17 U.S.C. 107.

Second, while the work was technically unpublished under the Copyright Act’s definition of “publication,” a fact that usually cuts against fair use, the court held that because the contents of the recording were transmitted during the conference call, “the publication status of the work favors fair use.” Third, although Bloomberg copied the entire recording (again, a factor that typically weighes against fair use), it didn’t help Swatch in this context. The court held that “copying the entirety of a work is sometimes necessary to make a fair use,” and that was the case here.

Fourth, the Second Circuit held that the fact that there is no commercial market for the resale of financial earnings calls favored fair use.

Swatch v. Bloomberg is a significant case in the evolution of fair use case law, which has been quite active as of late (see, for example, Google Books, Cariou v. Prince).  

It’s worth pointing out that the Second Circuit dodged an unusual copyright  issue on this appeal. One of the fundamental precepts of copyright law is that the work for which copyright is claimed must be “fixed in a tangible medium of expression,” such as a book, film or a digital storage device. In this case Swatch’s audio was recorded simultaneously with its transmission, satisfying the all-important “fixation” requirement. However, Bloomberg received the transmission simultaneously with Swatch’s receipt and fixation of the call, and therefore fixation had not taken place at the instant Bloomberg made its recording. Accordingly, Bloomberg argued, no copyright-protected work existed at the moment Bloomberg recorded the transmission.

This issue was addressed in the lower court opinion, decided in April 2011. Swatch’s response, which the federal district court accepted, relied on Section 101 of the Copyright Act, part of which states that “a work consisting of sounds, images, or both, that are being transmitted, is ‘fixed’ for purposes of this title if a fixation of the work is being made simultaneously with its transmission.” The district court applied this section of the statute, and held that copyright law creates a legal fiction that the simultaneous fixation occurs before the transmission.  This ruling allows the unauthorized recording of sounds that are transmitted live and recorded simultaneously to be the subject of a copyright infringement claim.  

Bloomberg sought to challenge this interpretation of the copyright statute on appeal, but the Second Circuit refused to address the issue based on a procedural defect in Bloomberg’s appeal. This leaves the lower court decision on a rare and obscure issue of copyright law intact.

The Swatch Group Mgt. Services Ltd. v. Bloomberg, L.P.  (2nd Cir. Jan.27, 2014)

 

Utah Court’s Aereo Decision: A Preview of Supreme Court Outcome?

Utah Court’s Aereo Decision: A Preview of Supreme Court Outcome?

It’s difficult to believe that so many judges and lawyers could disagree over what would appear, at first blush, to be a straightforward issue of copyright law. Can a company legally copy over-the-air TV broadcasts and transmit them to subscribers over the Internet, as long as it stores and transmits a separate copy for each customer?

Two companies have adopted this technology,, Aereo and FilmOn X (fka “BarryDriller.com”). Two federal courts have held that this does aereo_2not violate the copyright rights of broadcasters (New York’s Second Circuit and a Massachusetts district court), and three courts have held it does (the California, D.C. and Utah district courts). Thus far, all of the rulings have arisen in the context of preliminary injunction motions, and until the Utah court’s ruling on February 19, 2014, Aereo had survived two challenges (New York and Massachusetts).  FilmOn X had suffered the two losses (California and D.C.). Before the Utah decision, the Supreme Court had accepted review of the New York case, an unusual development given the fact that none of these cases involved a final judgment on the merits.

The Utah decision may prove to have tipped the balance, in more ways than one. Not only is the count now 3-2 in favor of the broadcasters in judging the legality of the “individual copies” technology, but Utah Federal District Court Judge Dale Kimball — a 17 year judicial veteran and former law professor — may have finally cut through the massive volume of verbiage surrounding this issue.

The section of the Copyright Act at issue, the “Transmit Clause,” states:

To perform or display a work “publicly” means—

to transmit or otherwise communicate a performance or display of the workby means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times.

When confronted with the same issue that had been presented to four federal district courts and the Second Circuit, and which will be decided by the Supreme Court this term, Judge Kimball  made short work of the local broadcaster’s motion for a preliminary injunction:

The plain language of the 1976 Copyright Act support Plaintiffs’ position. The definitions in the Act contain sweepingly broad language and the Transmit Clause easily encompasses Aereo’s process of transmitting copyright-protected material to its paying customers. Aereo uses “any device or process” to transmit a performance or display of Plaintiff’s copyrighted programs to Aereo’s paid subscribers, all of whom are members of the public, who receive it in the same place or separate places and at the same time or separate times.

After recapping the legislative history of the Transmit Clause, Judge Kimball stated:

Aereo’s retransmission of Plaintiffs’ copyrighted programs is indistinguishable from a cable company and falls squarely within the language of the Transmit Clause. It is undisputed that Plaintiffs license its programming to cable and satellite television companies and through services such as Hulu and iTunes. These companies and services are providing paying customers with retransmissions of copyrighted works. Similarly, Aereo uses “any device or process” to transmit a performance or display of Plaintiff’s copyrighted programs to Aereo’s paid subscribers, all of whom are members of the public.

Judge Kimball was not impressed with the reasoning of the Second Circuit in the Cablevision case (Cartoon Network v. CSC Holdings), the 2008 case that created the copyright “loophole” on which Aereo and FilmOn X have built their businesses:

To reach its conclusion that the recorded copies for later playback did not require an additional license as a separate public performance, the Second Circuit proceeded to spin the language of the Transmit Clause, the legislative history, and prior case law into a complicated web. The court focused on discerning who is “capable of receiving” the performance to determine whether a performance is transmitted to the public.  However, such a focus is not supported by the language of the statute. The clause states clearly that it applies to any performance made available to the public. Paying subscribers would certainly fall within the ambit of “a substantial number of persons outside of a normal circle of a family and its social acquaintances” and within a general understanding of the term “public.”

However, the Cablevision court appears to discount the simple use of the phrase “to the public” because it concludes that the final clause within the Transmit Clause – “whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times”– was intended by Congress to distinguish between public and private transmissions. This court disagrees. The entire clause “whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times” appears to actually be Congress’ attempt to broaden scope of the clause, not an effort to distinguish public and private transmissions or otherwise limit the clause’s reach. The term “whether” does not imply that the ensuing clause encompasses a limitation. Rather, the introduction of the clause with the word “whether” implies an intent to explain the broad sweep of the clause and the many different ways it could apply to members of the public. Reading this final clause expansively is consistent with Congress’ intent to have the entire Transmit Clause apply to all technologies developed in the future.

Judge Kimball challenged an interpretation of the law that lies at the very heart of the Cablevision decision:

The Cablevision court’s analysis also appears to have changed the wording of the Transmit Clause from reading “members of the public capable of receiving the performance” to “members of the public capable of receiving the transmission.”  Therefore, instead of examining whether the transmitter is transmitting a performance of the work to the public, the Cablevision court examined who is capable of receiving a particular transmission.  This court agrees with Plaintiffs that the language of the Transmit Clause does not support such a focus.

Judge Kimball concluded that:

Based on the plain language of the 1976 Copyright Act and the clear intent of Congress, this court concludes that Aereo is engaging in copyright infringement of Plaintiffs’ programs. Despite its attempt to design a device or process outside the scope of the 1976 Copyright Act, Aereo’s device or process transmits Plaintiffs’ copyrighted programs to the public.

Based on this analysis the court enjoined Aereo from providing its service in the six states in the Tenth Circuit (Colorado, Kansas, New Aereo-FilmOnX-infographic-Dec-2013-721x1024Mexico, Oklahoma, Utah and Wyoming). He declined to stay the injunction pending the Supreme Court’s review of the issue, ordering that the preliminary injunction go into force at once.

This case, and the fact that it is Aereo’s first courtroom loss, just adds to the drama over the upcoming Supreme Court hearing and decision on this issue. Will the Supreme Court perceive the issue to be a simple as Judge Kimball, or will it, to use Judge Kimball’s phrase, “spin the language” of the Transmit Clause to come out the same way as the Second Circuit ?

And, while this line of cases may be of academic interest to copyright lawyers, it is of immense practical interest to untold numbers of consumers who may want to use the Aereo/FilmOn X services to help them “cut the cord” of the expensive cable services. For this reason, pressure on the Supreme Court from consumer rights advocates in favor of Aereo’s technology is likely to be intense. The extent to which this will influence the Supreme Court may never be known, but few will deny that it will be a factor.

Mass Law Blog Update, Week Ending February 14, 2014

  • “The Future of Fair Use After Google Books.” Jonathan Band summarizes his debate with John Baumgarten over whether the district court’s decision in Google Books was rightly decided.  (link)
  • Terry Hart on Copyhype –  “Volitional Conduct: Primetime Anytime and TV Now”
  • Future of Music Coalition’s Casey Rae’s post, “What’s the Deal with ‘Pre-’72’ Copyrights?” (link)
  • Massive, 478 page report concludes that yes, Australian copyright law should include fair use exceptions. However, it is only a recommendation, not the law (link to 478 page pdf)
  • The Max Planck Institute for Intellectual Property and Competition Law has issued a 284 page report titled, “Copyright, Competition and Development.” The Report “analyzes the  practice  of  competition  law jurisdictions on copyright-related markets around the world.” (link to 284 page pdf)
  • “Russian-SOPA” used to shut down music site domain name (Torrent Freak post)
  • EU court holds that clickable link does not infringe copyright in the site to which users are redirected. Or, in translated EU-speak, “the provision on a website of clickable links to works freely available on another website does not constitute an ‘act of communication to the public’, as referred to in that provision.” (link) Commentary from The 1709 Blog
  • Michael Carrier’s article, Only ‘Scraping’ the Surface: The Copyright Hole in the FTC’s Google Settlementis now available on SSRN
  • Secondary liability copyright claim against individual employee fails. BioD, LLC v. Amnio Technology, D. Ariz.
  • Copyright and the Changing Political Environment in Washington: A View From the Inside, The Copyright Society of the U.S.A., New York Chapter (YouTube Video)
  • Copyright Industries in the U.S. Economy, The 2013 Report. Take-away stat: copyright industries are growing are more than 2x the U.S. economy. (Do economists and copyright mix?)(link)
  • The Copyright Office is seeking additional comments on the subject of “Orphan Works and Mass Digitization.” Public roundtable discussions will be held on March 10 and 11, 2014. Details on the Federal Register 
  • Week three of CopyrightX, “The Subject Matter of Copyright” (link)
  • “Performing for profit: 100 years of music performance rights” The history of ASCAP and BMI, on the Oxford University Press blog (link)