It’s long been widely assumed that in-line linking is not a basis for copyright infringement. Following a recent decision by a Southern District of New York federal judge, that is no longer true.
Justin Goldman took a photograph of Tom Brady. Under the copyright laws, one of his exclusive rights is the right of public display.
Goldman posted the photo to Snapchat. It went viral and was embedded in a tweet. A number of mainstream media publications posted the tweet by embedding the tweet into articles on their sites. Because the tweet was linked “in-line” (displaying content from one site within another via a link), none of the publications downloaded the image, copied it, or stored it on their own servers.
Is this copyright infringement? Specifically, did the embedded tweet violate Goldman’s right of public display?
SDNY judge Katherine Forrest held that it could, and granted summary judgment to Goldman on this issue, leaving for trial or later motions whether Goldman released his image into the public domain by posting it on Snapchat and whether the defendants have a fair use defense.
In her ruling the judge outright rejected the Ninth Circuit’s so-called “server test,” established in Perfect 10 v. Amazon in 2007. This case held, in the context of a search engine, that whether a website publisher is directly liable for infringement based on the public display right turns on whether an image is hosted on the publisher’s own server, or is embedded or linked from a third-party server. Judge Forrest stated:
The plain language of the Copyright Act, the legislative history undergirding its enactment, and subsequent Supreme Court jurisprudence provide no basis for a rule that allows the physical location or possession of an image to determine who may or may not have “displayed” a work within the meaning of the Copyright Act.
However, the judge took pains to distinguish the in-line linking at issue in this case from the images at issue in Perfect 10:
In Perfect 10, Google’s search engine provided a service whereby the user navigated from webpage to webpage, with Google’s assistance. This is manifestly not the same as opening up a favorite blog or website to find a full color image awaiting the user, whether he or she asked for it, looked for it, clicked on it, or not. Both the nature of Google Search Engine, as compared to the defendant websites, and the volitional act taken by users of the services, provide a sharp contrast to the facts at hand.
This dicta may be of some reassurance to Google and other search engines, but it leaves publications that want to engage in in-line linking with a great deal of uncertainty.
As noted, this case is not over – the defendants can proceed to trial (or seek summary judgment) on defenses such as fair use and waiver. In theory, the case could go to the Second Circuit, and the Second Circuit could either adopt or reject the server test. However, it seems unlikely this will happen. Given the potential damages and the costs of defense, the more likely outcome is that the case will settle, leaving this decision on the books. (See update below). If so, the extent to which it will be persuasive on other courts, or even with other judges within the Southern District, is an open question.
In the meantime, online publications face a tough decision: do they pull back on in-line linking based on this decision, or do they assume this case is an outlier, and the server test remains good law? No lawyer can provide an unequivocal answer to this question, other than to say that the legal risks of in-line linking are now greater than they were before this decision was issued.
[Update]: On March 19, 2018, the federal district court judge certified her decision for immediate appeal to the Second Circuit. The order stated, in relevant part, as follows:
The Court credits the parties’ representations that its February 15, 2018 Opinion, . . . has created tremendous uncertainty for online publishers. In this case, the embedded image was hosted on Twitter; given the frequency with which embedded images are “retweeted,” the resolution of this legal question has an impact beyond this case. . . . Accordingly, in order to bring resolution to an important and controlling question of law and to more efficiently resolve this matter, the Court certifies its February 15, 2018 Opinion for interlocutory appeal. All other proceedings are stayed pending this appeal.
[Update 2 – May 2019]: The Second Circuit denied interlocutory review, and the case settled as to all defendants. Accordingly, this case will not be heard by the Second Circuit, and the District Court’s opinion will stand unreviewed.
Copyright law is confusing, but music copyrights take it up a notch. Often, judges and jurors with no background in a music genre are asked to determine whether two works are “substantially similar” after being subjected to esoteric analysis by musicologists who present arguments that even a trained musician might find hard to follow.
However, whether Pharrell Williams and Robin Thicke’s 2012 recording of “Blurred Lines” infringes Marvin Gaye’s 1976 composition of “Got To Give It Up” presents issues of copyright law that are challenging even by the arcane standards of music copyright law.
A quick recap: in 2015 a California jury found that Pharrell Williams and Robin Thicke’s (“Williams”) recording of Blurred Lines infringed the copyright in the composition of Got To Give It Up, and awarded Marvin’s Gaye’s heirs over $7 million in damages. The judge reduced this damages award to $5.3 million, but awarded a “running royalty” of 50% of future songwriter and publication royalties, which over time could be millions more.
After losing the jury trial Williams and Thicke appealed to the Ninth Circuit Court of Appeals, which heard oral argument in October 2017.
The copyright and music communities have been entranced by this case, and there are strong opinions on both sides. How will the Ninth Circuit rule? What arguments did the parties make that will determine the outcome of the appeal?
One way to answer these questions is to read the hundreds of pages of dense legal briefs Williams and Gaye filed with the Ninth Circuit. However, because the Ninth Circuit releases videos of oral arguments (on Youtube, no less) an easier alternative is to watch the video. The parties had only 30 minutes each to make their case, so they were forced to cut the chaff and argue the issues that are most important to their cases. All-in-all, watching the oral argument can be more edifying (and a lot less time consuming) than reading the briefs.
In this case oral argument is particularly interesting for two reasons: first, both sides were represented by preeminent appellate lawyers, two of the best in the country, so the arguments of the parties are well-articulated. Second, the oral argument makes it clear that the appeal may turn on one key issue: in a case claiming infringement of a musical composition created before sound recordings became protected by copyright, is the copyright limited to the sheet music? Or, may the copyright owner go beyond the sheet music deposited with the copyright office and play for the jury a contemporaneous sound recording of the composition?
First, some background on this issue.
It has long been a requirement that to register a copyright a copy of the work be deposited with the Copyright Office – the so-called “deposit copy.”
However, pre-1978 the Copyright Act did not protect sound recordings, only musical compositions. Gaye wrote Give It Up in 1976 and registered the sheet music for the composition, which was little more than a sketch of the melody, lyrics and chords (a “lead sheet”). But, he did not register his recording of the song. Indeed, since sound recordings were not protected the Copyright Office would not have accepted a deposit of the recording.
At the trial of this case, there was never any question that the jury would hear Blurred Lines, the allegedly infringing work. But as the case developed leading up to trial, a hotly contested issue was whether Gaye’s heirs should be limited to the lead sheet of Give It Up, or whether they could also play the recording for the jury.
The trial judge sided with Williams on this issue – he held that the scope of Gaye’s copyright was defined by the sheet music deposit filed with the Copyright Office 40 years earlier. This led to the surprising fact (widely commented on during the trial) that Gaye was never allowed to play Give It Up for the jury.
However, trial are messy, and despite this ruling, during trial (according to Williams), the judge allowed Gaye’s music experts to testify about the sound recording and play musical excerpts based on parts of the sound recording that were not present in the sheet music.
At oral argument before the Ninth Circuit it quickly became clear that whether this was permissible would be the focus of the hearing. Williams’ lawyer argued that the deposit copy (the sheet music submitted to the Copyright Office) strictly defines the scope of the copyright. In other words, Gaye’s copyright is defined, note for note, by the sheet music. Because the judge let Gaye go beyond the sheet music, she argued, the court should order a new trial.
The lawyer for Gaye’s heirs argued that the deposit copy does not define or limit the scope of the copyright in the composition. The best evidence of the composition, she argued, is the studio recording of Give It Up. Therefore, even if the jury did hear evidence present in the sound recording but not in the sheet music, the jury verdict should stand.
Gaye’s lawyer also argued that an expert can testify to what is “implied” in the sheet music – the sheet music deposit can be “interpreted” based on what would be understood by a knowledgeable musician. And, the sound recording may be relevant to that interpretation. Therefore, to the extent that Gaye’s music expert went beyond the sheet music “note for note,” this interpretation was permissible.
The problem, for the lawyers and the judges at the hearing, is that there appear to be no clear precedents to help determine which view of the law is correct. No court has squarely addressed this issue, and there is no legislative history to guide the Ninth Circuit judges.
It’s difficult to predict how the Ninth Circuit will resolve this issue, assuming they address it at all. Gaye’s lawyer had a “Plan B” argument that she stressed to the court, which is that even if the court accepts Williams argument regarding the limiting scope of the deposit copy, Gaye’s expert provided enough evidence for the jury to find in favor of Gaye based on the sheet music alone, without any evidence from the recording. Courts often will usually take the easier of two routes to a decision, so the Ninth Circuit may be able to avoid the issue that attracted most of the time and attention at the hearing by accepting this alternative argument.
However, if the Ninth Circuit does address the relevance of the sound recording to the pre-1978 composition, it will be an important copyright law precedent. There is a large catalog of pre-1978 music that is potentially subject to infringement claims, and the likely success of those claims will be viewed in light of the Ninth Circuit’s holding in this case.
If the Ninth Circuit does uphold the jury verdict in favor of Gaye, I wouldn’t discount the likelihood that Williams and Thicke will seek review by the Supreme Court. $5.3 million is a lot of money, and 50% of the future royalties for Blurred Lines is likely to increase that number substantially. The unusual issue of copyright law at the heart of this case could induce the Supreme Court to accept an appeal of this case.
Lastly, a discussion of the Blurred Lines case would be incomplete without a mention of Skidmore v. Led Zeppelin, in which the heirs of Randy Wolfe (aka Randy California), asserted copyright infringement of the 1967 Spirit song “Taurus” in the opening notes to “Stairway to Heaven.” That case was tried in federal court in California in 2016, and resulted in a jury verdict of non-infringement for Led Zeppelin, the opposite result to Blurred Lines. The judge in that case held that Wolfe’s case would be limited to the pre-1978 deposit copy, and refused to allow Wolfe to play the sound recording of Taurus for the jury. He appears to have been more strict than the judge in Blurred Lines in refusing to allow Wolfe’s expert to provide any interpretation of the sheet music.
The Led Zeppelin case is on appeal to the Ninth Circuit, although oral argument has not yet taken place and therefore any decision is likely to be issued after a decision in Blurred Lines. If the Blurred Lines panel of judges doesn’t decide the sound recording issue, the Ninth Circuit may have a second opportunity to rule on the issue in the Led Zeppelin case. If the Blurred Lines judges do decide that issue, it will be binding throughout the Ninth Circuit, including the court in the Led Zeppelin appeal.
Update: The Ninth Circuit issued its decision on March 21, 2018, upholding the jury verdict. The court did not decide the question of whether Gaye’s evidence should have been limited to the deposit copy, instead deciding the case under what I describe above as Gaye’s “Plan B.” The court stated:
The parties have staked out mutually exclusive positions. The Gayes assert that Marvin Gaye’s studio recording may establish the scope of a compositional copyright, despite the 1909 Act’s lack of protection for sound recordings. The Thicke Parties, on the other hand, elevate the deposit copy as the quintessential measure of the scope of copyright protection. Nevertheless, because we do not remand the case for a new trial, we need not, and decline to, resolve this issue in this opinion. . . . Both experts referenced the sound recording. Both experts agreed that sheet music requires interpretation. The question of whose interpretation of the deposit copy to credit was a question properly left for the jury to resolve.
Second Update: The case was reheard en banc, and the jury’s verdict in favor of Led Zeppelin was upheld. Link
If you were asked why copyright law exists you probably would respond along the lines of “to give authors and artists a financial incentive to create new works, and to protect the integrity of their works.” It’s unlikely you would respond, “to give someone the ability to manage their online reputation and remove defamatory online reviews.”
Yet, in a bizarre case that has wound its way through the courts of Massachusetts for the last six years, that is exactly what attorney Richard Goren attempted to do. Ultimately, Goren was unsuccessful, but only after years of litigation, culminating in an appeal to the First Circuit Court of Appeals, the highest federal court in Massachusetts.
Background. I first wrote about this case in 2014, and the facts are described in detail in that post. In short, a person named Christian DuPont (about which the case record discloses little beyond his name) published two posts on RipOffReport defaming Goren. RipOff, as is its practice, refused to take down the posts, claiming protection under Section 230 of the Communications Decency Act.
That’s when Goren’s copyright workaround strategy took hold.Goren sued DuPont for defamation in Massachusetts state court. DuPont didn’t show up, so he was defaulted. Goren then asked the court to assign to him ownership of the copyright in the posts.
Copyright in hand, Goren (and an LLC he assigned the copyright to) again asked RipOff to remove the posts; RipOff again refused.
Goren – disregarding the possible Streisland Effect consequences – then sued RipOff for copyright infringement in federal court in Massachusetts.
In the end RipOff won. The posts defaming the attorney remain on Rip Off Report to this day.
The Copyright Issue. Goren’s lawsuit asserted that he now owned the copyright in the two posts, and that RipOff was infringing that copyright by continuing to publicly display the posts without his consent.
RipOff’s defense was twofold: first, that when DuPont first published the posts he had assigned the copyrights to RipOff via RipOff’s online agreements. If that was the case the state court’s assignment to Goren was invalid, and Goren owned no copyright he could assert against RipOff.
Second, even if DuPont had not assigned the copyrights to RipOff, he had given RipOff a nonexclusive license to display the posts, and Goren owned the copyrights subject to this license.
These defenses required the court to consider two issues. First, did RipOff’s online agreement transfer ownership of the copyrights from DuPont to RipOff?
Second, if ownership was not conveyed, did the online agreement transfer a license to RipOff, allowing RipOff to continue to display the posts even after copyright ownership had been transferred to Goren?
The district court analyzed RipOff’s online agreement in this case in excruciating detail. The agreement was imperfect, but the court concluded that it was legally effective, at least as a matter of contract law. However, the court concluded that the conveyance of ownership was ineffective as a matter of copyright law. The Copyright Act requires that “[a] transfer of copyright ownership, . . . is not valid unless an instrument of conveyance, or note or memorandum of transfer, is in writing and signed by the owner of the rights conveyed….” 17 U.S.C. § 204. DuPont never signed an instrument transferring his ownership to RipOff, and therefore RipOff did not own the copyright in the posts.
However, RipOff was still left with a perpetual, irrevocable nonexclusive license to display the posts (a limited license does not require a signed conveyance), and therefore Goren’s copyright ownership was subject to the rights granted by this license.
The First Circuit upheld the district court’s ruling that, based on this reasoning, RipOff’s continued publication of the posts was not copyright infringement.
Attorney’s Fees. The district court found that the legal and factual basis for Goren’s copyright claims were “at best questionable,” notwithstanding Goren’s claim that he had litigated in good faith.The court awarded RipOff $123,000 in attorney’s fees under the Copyright Act. An award of attorney’s fees is infrequent in copyright cases, but the Supreme Court has vested broad discretion in district courts to award attorney’s fees to prevailing parties in copyright cases (seeKirtsaeng v. Wiley, USSC 2016), and this discretion is rarely upset by appeals courts. In this case the district court did not abuse its discretion, and therefore the fee award was upheld by the First Circuit.*
*RipOff’s post-judgment motion for attorney’s fees involved some procedurally complex issues. The First Circuit decision is worth reading by lawyers who seek statutory attorney’s fees in federal court.
Takeaway. If this case strikes you as crazy complicated, you’re in good company. If nothing else, it shows how the copyright system has the potential to be manipulated for purposes other than the policies that underlie copyright law. Goren failed in this case, but only because RipOff had the foresight to create an online agreement that required posters to give it a license – but for that, Goren’s copyright claim might have succeeded. The case is a reminder of how important it is that websites ensure that their online browsewrap/clickwrap agreements are effective. And, it teaches that (at least in the First Circuit) an online agreement will not be sufficient to effect an assignment.
Many copyright lawyers who have watched this case have applauded the outcome on the ground that what Goren attempted to achieve subverted the goals of copyright law, which are to “promote the progress of science” (Constitution, Article I Section 8. Clause 8) not for reputation management. In the words of Professor Eric Goldman (below), the case exposes the “ugly interface between copyright and reputation management.”
A recent opinion from an SDNY federal district court reminded me of a client I represented many years ago. The company insisted that the core functionalities and user interface of its software program were trade secrets. A competitor had copied these, and the client asked my firm to commence a lawsuit for misappropriation of trade secrets.
An investigation showed that the client’s software was disclosed to prospective clients in one-on-one meetings and at trade shows without any requirement that a confidentiality or nondisclosure agreement be signed. Once a customer licensed the software an NDA was part of the sale, but before then it was not.
A secondary concern was that the software was used by hundreds of employees (via a site license), but these employees were not told that the software contained trade secrets – only the manager that signed the license agreement agreed to this. Was this sufficient to protect the trade secrets in the software? I was concerned it was not.
I advised the client that we could not bring suit against the client’s competitor. The client was not pleased with this advise, but so it goes.
The court’s opinion in Broker Genius, Inc. v. Zalta reminded me of this engagement. In this case Broker was seeking a preliminary injunction against a competitor based on similar facts. Source code was not at issue – Broker claimed trade secret misappropriation only of the user interface and functionalities that would be viewed by end users of the software.
The court found that Broker did protect the confidentiality of its software before it entered into a license by limiting what prospects could see – in that respect it did a better job than my client.
However, Broker’s primary tool for protecting its trade secrets was the Terms of Use implemented via a clickwrap license. But, there were problems with this license. First, as was the case with my client:
Broker Genius licensed its software to its customers on a per company basis. Because these customers include companies with as many as 120 employees … only the person who initially sets up the corporate account on behalf of her organization is required to assent to the Terms of Use … other employees who may be more involved in everyday use of the software would not have the opportunity to individually assent and would not know what the Terms of Use were …
Second, the Terms of Use paralleled the Copyright Act, but didn’t contain a confidentiality provision. Broker’s Terms of Use stated that users of Broker’s software may not “[r]eproduce, modify, display, publicly perform, distribute or create derivative works of the Site or Apps or the Content.” This language tracks the exclusive rights language of Section 106 of the Copyright Act, but does not, as the court stated, “amount to a confidentiality or non-disclosure clause that notifies users of the secrecy of any aspect of [Broker’s software] or preclude [licensees] from describing to others the software’s functions, structure, and appearance.”
Third, the court questioned whether a clickwrap license was sufficient to protect trade secrets, although it did not base its decision on this fact.
Based on factors one and two above, the court denied Broker’s motion for a preliminary injunction.
Here are my takeaways from this case –
Don’t disclose your trade secrets to prospective customers. Either limit what they can see, or require an NDA. (Broker actually passed this test).
Don’t use a clickwrap agreement to impose a confidentiality requirement. Although the court did not base its decision on the fact that Broker had done this, clickwraps are suspect in the eyes of many judges, and I would not advise a client to base such an important contractual provision on a clickwrap.
If your software is going be used by many employees under a site license, the employees need to be reminded that the software is confidential every time they access the program, or at the very least periodically. You can’t assume an employee agrees to confidentiality based on a manager’s signature on a contract.
Make sure your contract, regardless of form (paper or clickwrap), contains an appropriate confidentiality/trade secret provision. Merely echoing the Copyright Act won’t accomplish this.
The trial between Alphabet’s Waymo and Uber over Waymo’s self-driving car trade secrets was scheduled to begin on December 4th before Judge William Alsup, of Oracle v. Google fame. (Readers familiar with coverage of that case know how smart and tough he is).
According to published reports, at the last minute evidence (a letter) was discovered suggesting that Uber has a team dedicated to collecting trade secrets from competing companies. Allegedly, the people involved use disappearing-message apps, anonymous servers, and secret computers and phones to communicate without leaving a trail. The purpose was to ensure there was no paper trail that would come back to haunt the company in any criminal or civil litigation.
However, now that this has been disclosed, that strategy has backfired.
Whether this Uber team targeted Waymo is not entirely clear, but there is enough suspicion that it did for Judge Alsup to have postponed the trial so Waymo can conduct additional discovery – discovery that would have already have taken place had Uber disclosed this earlier.
All of this has Judge Alsup royally peeved. According to press reports (links below) his comments at the hearing postponing trial included the following:
“I can no longer trust the words of the lawyers for Uber in this case. … If even half of what is in that letter is true, it would be an injustice for Waymo to go to trial”
“You [Uber’s lawyers] should have come clean with this long ago”
“You’re just making the impression that this is a total cover up”
“Any company that would set up such a surreptitious system is just as suspicious as can be”
“I have never seen a case where there were so many bad things done like Uber has done in this case”
So, Uber has a federal judge who is about to start a trial (not next week, but probably very soon), who distrusts Uber and, perhaps more importantly, its lawyers.*
This is bad news for Uber. It’s important that a trial judge trust the lawyers trying a case to tell him the truth. Trial lawyers are constantly making representations to the judge about the law and evidence, and if the lawyers representing one side of the case lose the judge’s trust, they are at a huge disadvantage. Once a judge catches a lawyer in a lie the judge will question everything the lawyer says.
While Judge Alsup must follow the rules of evidence and civil procedure in his courtroom, there are countless ways he can tilt the scales against Uber. Studies have shows that jurors believe that the judge knows what’s “really going on” in a trial, and they watch the judge closely to try to pick up on how he views the case. The judge can communicate how he feels about the case through body language, tone of voice and a thousand other subtle clues that can’t be reviewed on appeal. He can also rule against Uber on motions and procedural issues on which he has discretion, without fear of being reversed.
All of this leaves Uber at a disadvantage before the trial even begins.
Presumably, Uber’s executives and in-house counsel (and perhaps the Board of Directors) are on top of this situation and trying to figure out how to proceed. What are their choices?
Do nothing. Uber can decide to ignore its problems with the judge and proceed to trial. If the evidence supports Uber’s position that it has not actually used any of Waymo’s trade secrets (as Uber has repeatedly stated in its public announcements on this case), perhaps it can muscle its way through the case. It will have one strike against it, but that’s not an out.
Retain new counsel. The judge may no longer trust Uber’s lawyers, but it’s probably too late to change law firms. However, it may not be too late to bring in a new lawyer (one that Judge Alsup is known to “trust”) to help try the case. Judge Alsup has not set a new trial date, and depending on when he does, this is not out of the question. If the new trial date is far enough in the future, it may be possible to bring in a new firm to take over as lead counsel. By doing that Uber would be signaling to the judge that it recognized his problem with current counsel, and took steps to replace them. Of course, this ignores the possibility that Uber hid information from its lawyers, and that all of the fault with the newly discovered evidence lies with Uber, something Judge Alsup may already suspect.
File a motion asking Judge Alsup to recuse himself (withdraw from the case). A recusal motion may be based on evidence that a judge is biased or lacks impartiality. That said, recusal motions are always a long shot, and I don’t think Judge Alsup’s comments have crossed the line. And, an unsuccessful motion for recusal might only backfire and make things worse for Uber. Before filing a motion to recuse Judge Alsup, Uber would do well to keep in mind Emerson’s quote that “when you strike at a king, you must kill him.” That said, I’m pretty sure some associate at Uber’s law firm is feverishly researching Ninth Circuit recusal law today.
Settle the case. It’s almost certain that there have been settlement discussions in this case. Given its current problems, Uber’s cost/benefit analysis of settle/litigate has changed, and Uber should consider putting more on the table. This may include more money and some form of independent monitoring process that would give Waymo assurances that Uber is not using its trade secrets. It may even go so far as to put Uber’s self-driving car project on hold for some period of time.
None of these options is likely to be appealing to Uber, but these are the choices that face a party who has (and whose attorneys have) angered or alienated a judge. Uber is in a tough spot. How it will extricate itself – or whether it even can – remains to be seen.
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