Copyright

Aereo, Antenna Farms and Copyright Law: Creative Destruction Comes to Broadcast TV (Part I)

May 17, 2013

Aereo is coming to Boston, and to 20 other cities before the end of the year. What is Aereo? Aereo is a company. It has developed a system that captures over-the-air television (broadcast TV) and retransmits it to subscribers over the Internet. Subscribers are able to watch broadcast TV on their computers, tablets and smart phones. Even better, Aereo acts as a remote digital video recorders (a remote DVR) so subscribers can record programs and stream them at another time. Aereo launched in New York City in early 2012, but it has announced that it is expanding to 21 other cities in 2013. Is this a problem for broadcasters? You bet it is. Cable companies pay broadcasters such as CBS, ABC, NBC and FOX  for the right to retransmit their shows to cable subscribers. If people can access broadcast TV at Aereo’s rates (which are less costly than cable rates), it may mean fewer cable subscribers and reduced network revenues. According to the New York Times, the use of Aereo and copycat services has the potential to cost the networks retransmission fee revenues of more than $2 billion/year, an amount projected to grow to $6 billion/year by 2018. The broadcasters are not taking this lying down. Claiming copyright infringement they sued Aereo in New York. However Aereo successfully defended its technology before the influential Court of Appeals for the Second Circuit.*…

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Does Second Circuit Decision Determine Copyright Legality of Aereo “Antenna-Farm” System Nationwide?

May 15, 2013

Aereo captures over-the-air television broadcasts and streams them to Aereo subscribers over the Internet. While the broadcasters claim this is copyright infringement (unauthorized public performance), Aereo has created an “antenna-farm” system designed to avoid allegations that its rebroadcast is a public performance under U.S. copyright law. CBS Broadcasting and other broadcasters brought suit for copyright infringement in federal court in New York.  However, Aereo convinced both the federal district court and the Second Circuit Court of Appeals that Aereo does not violate copyrights in the broadcasts. (Aereo shows “how it works” here). Aereo rolled out its first implementation in New York, and the Second Circuit “test case” was decided there. Now, Aereo plans to launch its service in 22 cities before year end. Boston is scheduled to launch on May 30th. Apart from the legalities of the underlying copyright claim, this raises the question whether the broadcasters can re-challenge the Aereo service as it launches in new locations outside the Second Circuit (which is comprised of New York, Connecticut and Vermont). Unfortunately, federal law in the U.S. is not always uniform. For example, Aereo may have prevailed in the Second Circuit (i.e., New York), but the broadcasters may be able to successfully challenge Aereo in the First Circuit (Boston) when it launches here, and perhaps get a different result. In fact, according to Aereo CBS has threatened to do just that, stating…

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Observations on Professor William Fisher’s edX “CopyrightX” MOOC

May 9, 2013

Let me begin with the bottom line: this was a excellent course. If Professor Fisher offered another course (such as trademark or Internet law, two areas identified on his online bio), I would not hesitate to take it or audit it. Background edX is a collaboration formed by Harvard and MIT to produce “Massive Online Open Courses,” or “MOOCs.”  (I will use the phrase “online courses” as well as “MOOC”). edX is something of a latecomer to the still-new world of MOOCs. The leaders to date (with the most courses), are Coursera and Udacity. However, there are many “smaller” and legacy offerings. (See 700 Free Online Courses From Top Universities). My impression is that until edX, Coursera and Udacity arrived, most online courses were nothing more than hit-or-miss video recordings of classroom lectures. They were not produced with an online audience in mind, and often suffered from poor production quality. Listening to the professor discuss homework assignments, papers, exams, office hours and teaching assistants–none of which are relevant to viewing the lectures online–was frustrating. Until recently online courses tended to focus on the hard sciences, and I hadn’t come across any legal courses. This changed when, late last year, I received an edX email notice for “HLS1x Copyright.” Or, as it came to be known, “CopyrightX.” Here are some excerpts from the course description I received: HLS1x Copyright, an experimental…

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New York State Court Blows a Hole in the DMCA Safe Harbors for Pre-1972 Sound Recordings

April 30, 2013

The recording companies have consistently maintained that the Digital Millennium Copyright Act’s (DMCA) notice-and-takedown regime does not apply to pre-1972 works. However, the law on this arcane issue has been scarce. In Capital Records v. MP3tunes (SDNY 2011), the court ruled that pre-1972 works were covered by the DMCA. After this decision the recording companies decided to make their argument in state court. Their strategy paid off – the New York State intermediate appellate court (the New York Supreme Court, Appellate Division), has issued a decision contrary to MP3tunes. In UMG Recordings v. Escape Media (often referred to as the Grooveshark* case), the court held that “Congress intended for the DMCA only to apply to post-1972 works.” *Grooveshark is a music streaming service that allows users to upload sound recordings.  According to Wikipedia, Grooveshark streams over one billion sound files a month. The Grooveshark case arises out of two legal oddities: first, Congress did not extend copyright protection to “sound recording” until it passed the 1972 Copyright Act (the effective date of protection being February 15, 1972); and second, before 1972 copyright was subject to state law. The upshot of this is that although the federal courts have exclusive jurisdiction over most copyright law claims, pre-1972 sound recordings are an exception. Claims for breach of pre-1972 sound recordings can be brought in state court and decided under the antiquated state copyright laws.*…

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Second Circuit Copyright Decision Vindicates Richard Prince’s “Appropriation Art”

April 28, 2013

Assume I were to take a well-known, in-copyright work of art, modify it in a variety of ways and publish the results as a coffee table book. To make this thought experiment easy, assume that the Statute of Liberty is covered by a U.S. copyright registration today—in fact, the Statue of Liberty was registered with the U.S. Copyright Office in 1876, but its registration has long-since expired. Assume I took 30 photographs of the Statue and published my book with the images modified in various ways. For example, I created collages, altered the face of the Statue and superimposed various objects on the Statue. Instead of holding a torch and a tablet, in one picture she is holding a photo of the head of Osama Bin Laden, and in anther she is holding a day-glo image of the World Trade Center buildings. In some cases I used only parts of the Statue, and in others I painted objects that obscured the face. You get the idea. Would the sculptor be able to assert copyright infringement, or would my book be protected by the copyright doctrine of fair use? The legal question, more precisely, would be: is my use of the Statue sufficiently transformative to qualify as fair use? An issue like this faced the Second Circuit Court of Appeals in a much-watched case, Cariou v. Prince. The court released its decision…

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YouTube Scores Big Victory on Remand in Viacom DMCA Copyright Case

April 21, 2013

The copyright content industry has launched two no-holds-barred legal challenges against non-piratical websites that host third-party videos. That is, service providers whose intent is not obviously to induce or encourage copyright infringement and that follow the “notice and take down” rules of the Digital Millennium Copyright Act (DMCA).  Until last Thursday the outcome had been a complete loss for the content industry in one case, UMG v. Veoh (9th Cir. 2013). In the second case, Viacom v. YouTube, the content owners were hanging on by their fingernails following an adverse summary judgment ruling by Southern District of  New York District Court Judge Louis Stanton in 2010, followed by a largely (but not entirely) affirming decision by the Second Circuit in 2012. However, following Judge Stanton’s post-remand decision, issued on April 18, 2013, the content owners are left with a complete loss in the second case as well. Absent another appeal to the Second Circuit, Viacom v. YouTube is over. The outcome of these two cases in the influential Second and Ninth Circuits is not only a loss for the copyright owners, but a significant level of clarification as to what hosting sites such as YouTube and Veoh should do to ward off future attempts to pierce the copyright liability safe harbors created by the DMCA. The conclusion of the YouTube case (assuming no further appeal) is particularly significant. When Google purchased Youtube for $1.65 billion in…

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Video Porn Mass Copyright Litigation Plaintiffs Not Welcome in Massachusetts

April 16, 2013

Copyright owners who wish to file mass copyright suits based on a ”BitTorrent Swarm” joinder theory—cases in which dozens (sometime hundreds) of anonymous defendants are joined in a single suit and then identified by serving subpoenas on their ISPs—are not welcome in Massachusetts. I’ve written about the phenomenon of BitTorrent swarm mass copyright suits before, but it looks like the door has been all but closed to these cases in the District of Massachusetts. As a reminder, here’s how these cases work. Assume you are the CFO of an adult movie publisher. Sales aren’t doing very well (given all the free porn on the Internet), and you’re under pressure to increase revenues. You hear about a gambit used by some other adult movie companies, and you decide to give it a try. You know your movies are being downloaded from the Internet, infringing your copyrights. You sue a group of downloaders, all of whom are part of the same “Bit Torrent Swarm,” as “Does”—that is, anonymous defendants whose names will be substituted into the suit at a later date. You contend that the fact they are part of the same “swarm” justifies joining them all in a single case.* *This argument relies on Rule 20(a)(1)) of the Federal Rules of Civil Procedure, which allows multiple defendants to be joined in a single case where the claims arise “out of the same transaction,…

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News Monitoring Service Based on AP Articles Not Protected by Fair Use

April 1, 2013

Do you think U.S. copyright law protects the author of this news snippet from copying? – Job seekers can roll the dice to land work at another of the four casinos coming soon to Ohio. Hollywood Casino Toledo has posted more than 600 job listings on its website this week. . . . restaurant workers, slots and table games supervisors, groundskeepers and security officers. The casino is scheduled to open in the spring with . . . How about this one? – The military intelligence complex an hour outside Washington where the WikiLeaks case goes to court this week is known as a cloak-and-dagger sanctum off-limits to the public — a reputation that’s only partly true. . . . low-level clearance and a Lady Gaga CD. The prosecution can only hope that their arguments, or the evidence, will reveal the secrets of how, . . . Would it make a difference if you knew that the 58 words in first excerpt are taken from a 109 word article, and the 61 words in the second article from a 540  word article, and that both articles were (as they appear) factual news pieces? People constantly ask “how much can I copy and be safe” under copyright law? Thirty seconds from a several minute piece of music?  10% of a news article?* *The “10% rule” and “30 second rule” have become the equivalent of legal urban legends. Neither has a basis under U.S. copyright law. The answers to these questions are most often determined by application…

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Supreme Court First-Sale Ruling Favors Gray Market Importers of Copyrighted Works, But Is Likely Only One Round in an Ongoing Battle Over the Right to Exclude Imported Works

March 20, 2013

Last week I published a post on the lawsuit challenging the “first-sale” doctrine in the context of digital files. On Tuesday the Supreme Court issued a decision holding that the first-sale doctrine applies to copies of copyrighted works lawfully made abroad. To understand the facts of this case picture this scenario. You are a student in Thailand, and you use English-language textbooks in your studies there. You see that the textbooks are not pirated copies—they are legal copies, authorized for foreign publication. When you come to the United States to continue your education you see the same textbooks are sold at much higher prices. Why not get ahold of some of the books being sold in Thailand and sell them at below-U.S. prices but above Thailand prices? There is money to be made there! Math student Supap Kirtsaeng recognized this arbitrage opportunity. He asked his family in Thailand to buy copies of foreign edition English language textbooks at Thai book shops and ship them to him in the U.S. He sold the textbooks on EBay, reimbursed his buyers and pocketed the difference. He was successful to the tune of almost a million dollars in sales and $100,000 in profits. However, the fact that Kirtsaeng was undercutting U.S. prices infuriated book publisher John Wiley & Sons, Inc., which sued Kirtsaeng in U.S. District Court in Manhattan, arguing that Kirtsaeng violated its copyright rights by reselling…

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Copyright, Redigi and the Star Trek Transporter

March 14, 2013

Last week’s New York Times article on digital resales, Imagining a Swap Meet for E-Books and Music, is a reminder that U.S. District Court Judge Richard Sullivan’s decision on the pending cross-motions for summary judgment in Capitol v. Redigi can be expected quite soon. The motions were argued on October 5, 2012 (transcript), and six months is a fairly long time for a judge to decide motions of this sort. (For my earlier blog post on this case see Redigi Case Poses A Novel Copyright Question on the Resale of Digital Audio Files – Is “Digital First Sale” Legal?) Ever since copyright protection began to be applied to software in the early 1980s the industry has complained that the law lags behind the technology. The Redigi case is another example of this lag. The hearing transcript illustrates the difficulty of applying copyright law to new digital technologies, as the lawyers and the judge stuggle to find an analogy that will help them apply the copyright “first sale” doctrine to the Redigi “forward and delete” system. The Redigi System. To briefly recap, Redigi can be used to copy (reproduce, migrate, transport, all verbs used by the parties) an iTunes file from a consumer’s computer to a Redigi server (aka the “cloud”), during which process it deletes the file from the owner’s computer. The file, although located on Redigi’s servers, remains accessible only…

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Seventh Circuit: Embedding and Linking Is not Contributory Copyright Infringement

November 8, 2012

Before the Internet made file sharing ubiquitous, liability for “indirect” copyright infringement was something of a legal backwater.* Massive file sharing of audio, image and video files has changed that. Where a website actually hosts a copyrighted file uploaded by a user, the legal rights of the parties are relatively clear: the uploader (and subsequent downloaders) are liable for “direct” infringement.  The legal rights of the website owner are governed by the Digital Millennium Copyright Act (DMCA).** *A notable exception being the Supreme Court’s pre-Internet decision in Sony Corp. of America v. Universal City Studios, Inc., which rejected a claim of contributory infringement directed at the VCR, since Sony did not encourage copyright infringement, and the VCR was capable of commercially significant noninfringing uses. **Caveat: the courts are still working at interpreting and applying the DMCA. The most recent appellate decisions are Viacom v. Youtube (2nd. Cir. 2012) and UMG v. VEOH (9th Cir. 2011). However, there are many situations where the DMCA does not apply because the illegal file is not being hosted by the defendant (that is, the file is not resident on a server owned or controlled by the defendant). In those cases, where there are countless uploaders and downloaders (many of which cannot easily be identified), copyright owners will sometimes sue the website owner. A single case, if successful, has the potential to inhibit access to thousands of illegal files. However,…

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Porn Movies, Copyright Trolls and Joinder (Yes, Joinder)

October 31, 2012

In Third Degree Films v. Does 1-47 (D. Mass. October 2, 2012), Judge William Young took on the “copyright trolls” in the adult film industry as best he could, holding that the plaintiff (a publisher of copyright-protected adult films that are being shared on the Internet) cannot join 47 “John Doe” defendants in a single action — it must instead file 47 individual suits. The issue here is part of a larger controversy, the “porn film copyright shakedown.” The way this works is as follows. Copyright holders file Doe suits, which identify defendants only by IP address (all the plaintiff knows at that point). They then subpoena the ISPs and identify the owner of the IP address.  Having identified the owners, they tell them that, absent a quick settlement (typically under $5,000), they will name them in the suit and serve them.  Most people, rather than suffer the embarrassment (or what Judge Young calls the “reputational cost”) of having court records show that they downloaded films with titles like “Big Butt Oil Orgy 2,” settle out-of-court. Judge Young describes this process as “misusing the subpoena powers of the court, seeking the identities of the Doe defendants solely to facilitate demand letters and coerce settlement, rather than ultimately serve process and litigate the claims.”* *As one court put it, a defendant – “whether guilty of copyright infringement or not — would then have to decide whether to pay money to…

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