Copyright Law Blog: Exclusive Rights

Monthly Archives: June 2009

AIPLA files amicus in Reed Elsevier v. Muchnick

Shourin Sen - 19 June 2009 – 8:52 am

Filed under Jurisdiction, Registration, Supreme Court

The American Intellectual Property Law Association filed an amicus brief in Reed Elsevier on June 8. The AIPLA’s brief appears to act, to a certain extent, as the opposition brief to the Department of Justice’s filing that we discussed on Wednesday. Both the AIPLA and the Solicitor General argued that 411(a) is a claim processing rule and not a jurisdictional requirement. But the central reach of the AIPLA’s brief is that the 411(a) shouldn’t be read rigidly as to bar claims from proceeding before the Copyright Office grants or rejects a registration application. Indeed, the AIPLA’s brief takes an additional step and forwards that a plaintiff shouldn’t even need to mail a registration before filing suit:

What is less clear is from the text and legislative history of the statute is whether Section 411(a) permits a copyright owner to file an infringement action before the Copyright Office has acted to either issue or deny a certificate of registration, or even before the copyright owner has filed an application.

Although courts are divided on the question, the correct view is that the registration requirement is akin to a procedural condition precedent to prosecuting a lawsuit that may be satisfied “along the way.” This broader view of the requirement conforms to general proposition argued by Judge Walker in his dissenting opinion below that the registration requirement is more of a “claims processing rule.” The narrow view of the requirement improperly introduces a subject matter jurisdiction character into the statute by measuring compliance with the requirement only at the moment the action is commenced.

Documents

Brief of American Intellectual Property Law Association as Amicus Curiae in Support of Petitioners

Prior writings on Reed Elsevier v. Muchnick

Solicitor General files amicus in Reed Elsevier arguing that 17 U.S.C. 411(a) is a rigid claim processing rule

Shourin Sen - 17 June 2009 – 1:42 am

Filed under Jurisdiction, Supreme Court

The Solicitor General filed an amicus brief in Reed Elsevier v. Muchnick last week advocating that the Second Circuit’s decision should be vacated and remanded. The brief first argues, similarly to the petitioners and respondents, that the registration requirement set forth in 17 U.S.C. 411(a) is a processing rule and not a jurisdictional requirement. But the section of the brief is somewhat perfunctory.

It appears, instead, that the primary reach of the brief is to advocate for the Supreme Court to interpret 411(a) as a rigid requirement: That courts should raise the issue of registration sua sponte and refuse to adjudicate suits where a plaintiff has failed to comply with 411(a). After an extensive factual introduction lauding the merits of registration, the brief’s first argument that 17 U.S.C. 411(a) doesn’t limit a federal court’s jurisdiction is six pages in length, while the section arguing that the Court should interpret 411(a) as a rigid rule runs twice that.

The Solicitor General, however, noted that 411(a) shouldn’t be read so rigidly to bar “industry-wide settlements” involving non-registered works. This is important because if the Supreme Court were to read the 411(a) as a hardline requirement then, even if the registration provision isn’t a jurisdictional requirement, the parties’ settlement could potentially be barred. The SG addressed the issue in the brief’s final page:

Under the circumstances of this case, the inclusion within the plaintiff class of individuals who had not registered their copyrights provides no sound basis for vacatur of the district court’s judgment on appeal. An industry-wide settlement is unquestionably in the public interest because it recognizes freelance authors’ copyright rights while ensuring the public availability of their works—a key concern of the Copyright Act. See Fogerty v. Fantasy, Inc., 510 U.S. 517, 527 (1994) (“[C]opyright law ultimately serves the purpose of enriching the general public through access to creative works.”); New York Times Co. v. Tasini, 533 U.S. 483, 505 (2001). The parties determined that a global settlement of all possible claims—including those based on currently unregistered works (which could be registered in the future)—was necessary in order to guarantee the availability within the electronic archives of all of the newspaper and magazine contents at issue. The parties then invested substantial time and resources, all of which would be rendered nugatory by enforcement of Section 411(a)’s registration requirement at this late stage.

There’s a lot going on in the brief and it’s definitely worth a read in its entirety. For example, you know people who advocate reading 411(a) as requiring a decision by the Copyright Office before bringing suit got a kick out of footnote 14:

Section 411(a) requires the plaintiff to possess a registration certificate, to have been refused registration, or to have preregistered, at the time the suit is commenced. Although some courts have held that Section 411(a)’s precondition to suit is satisfied by simply filing an application for registration, see, e.g., Apple Barrel Prods., Inc. v. Beard, 730 F.2d 384, 386-387 (5th Cir. 1984), those decisions are contrary to Section 411(a)’s plain text, and therefore incorrect . . .

The brief also illustrates how the upcoming opinion could either have a relatively narrow footprint outside of global settlement situations or fundamentally change many aspects of copyright litigation, depending on how the Supreme Court describes the registration process. If the opinion is written broadly, it could influence the following types of questions that we’ve addressed in the past few months:

How much deference should a court grant the Copyright Office’s determination that a work has sufficient originality?;
Should a plaintiff be barred from bringing suit on a copyright claim until after the Copyright Office has addressed a registration application, or should a plaintiff be able to proceed immediately after filing?;
Should courts grant architectural depictions filed as “Architectural Works” the exclusive rights granted under the Act to “Architectural Plans,” and vice versa?;
Should a determination by the Copyright Office that a work merits registration be taken into account when accessing whether a plaintiff’s suit is objectively unreasonable for purposes of awarding attorneys’ fees?

Document:

Brief for the United States as Amicus Curiae Supporting Vacatur and Remand

Prior writings on Reed Elsevier v. Muchnick:

Merit briefs posted for Reed Elsevier v. Muchnick
Judge Posner weighs in on Reed Elsevier v. Muchnick
Supreme Court grants cert in Reed Elsevier, et al., v. Muchnick, et al. [contains a complete list of filings]

Contributory trademark infringement claims against flea market landowner dismissed

Shourin Sen - 16 June 2009 – 9:00 am

Filed under Contributory Liability, Secondary Liability

Malletier v. The Flea Market, Inc., 2009 WL 1625946 (N.D. Cal. 2009)

Judge Wilken addressed a rather fetching contributory trademark infringement issue last Wednesday. The Flea Market, located in Sacramento, was one of the largest open-air flea markets in the United States. The market stretched 120 acres, had over two thousand vendors, and received approximately four million visitors a year.

Storied fashion designer and manufacturer Louis Vuitton brought suit against The Flea Market, Inc., the operator of the market, and the real estate company that leased the land to the market. The real estate company moved to dismiss arguing that it didn’t have sufficient control over the vendors to be liable for contributory infringement. The Court dismissed, distinguishing the case from the Ninth Circuit’s holding in Fonovisa, Inc. v. Cherry Auction, Inc, on the grounds that in Fonovisa, the defendant ran the flea market, not just leased the land.

Contributory Infringement

The Court cited Lockheed Martin Corp. v. Network Soultions, Inc., 194 F.3d 980, 983 (9th Cir. 1999) for the test for contributory liability for trademark infringement:

“Contributory infringement occurs when the defendant either intentionally induces a third party to infringe the plaintiff’s mark or supplies a product to a third party with actual or constructive knowledge that the product is being used to infringe the service mark.” Plaintiff does not allege that Defendant induced a third party to infringe. Thus, Plaintiff must show that Defendant supplies a product to a third party with knowledge that the product is being used to infringe the mark. To satisfy the “supplies a product” prong of the test, the court “consider[s] the extent of control exercised by the defendant over the third party’s means of infringement.” Lockheed, 194 F .3d at 984.

The Court then proceeded to distinguish Malletier from Fonovisa:

[I]n Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259 (9th Cir.1996), the Ninth Circuit addressed this requirement in the context of flea markets. In that case, Cherry Auction, Inc. operated a swap meet in which vendors paid daily rental fees in exchange for booth space. Cherry Auction supplied parking, conducted advertising and retained the right to exclude any vendor for any reason at any time. Cherry Auction was also aware that vendors in their swap meet were selling counterfeit recordings in violation of the plaintiff’s trademarks and copyrights. The Ninth Circuit held that Cherry Auction was liable for contributory infringement because it “suppl[ied] the necessary marketplace” for the sale of infringing products. Id. at 265; Lockheed, 194 F.3d at 984.

Defendant distinguishes Fonovisa because in that case the defendant both owned and operated the market, whereas here, the property owner, Defendant, and the market operator, The Flea Market, are two separate and distinct entities. As a property owner, Defendant leases land to The Flea Market without exercising any specific, direct control over the Flea Market’s tenants’ business operations. Therefore, Defendant argues, it cannot be liable for having any control over the sale of the infringing products.

Plaintiff has not alleged any facts showing a relationship between Defendant and the vendors. The only facts alleged in the complaint that specifically refer to Defendant state that it and The Flea Market are “closely related to each other and collectively own the land, building, structures and fixtures at the market.” The complaint also states that Defendant receives “substantial sums of money” from The Flea Market’s lease agreements with the market’s tenants and vendors. No case supports the proposition that a property owner may be liable for contributory trademark infringement if it only leases property to a separate and distinct entity, which in turn operates a flea market and rents space to a vendor, which in turn infringes trademarks. Property ownership alone does not establish that Defendant exercised control over the sale of the infringing products.

Los Angeles adult movie producer’s suit survives summary judgment in Ontario

Shourin Sen - 11 June 2009 – 6:53 pm

Filed under Canada, Registration

Jules Jordan Video Inc. v. Elmaleh, [2009] FC 488.

I thought we’d expand our reach and take a look at a rather fun judgment issued on May 11 by the Honourable Mr. Justice Harrington of the Federal Court in Ottawa, Ontario. The plaintiffs were a Los Angeles corporation that wrote, produced, directed (and performed) adult movies, and the sole shareholder/employee of the company. The plaintiffs alleged copyright infringement in thirteen works, which were registered in both the United States and Canada. The plaintiffs filed two suits, one in Canada and the other in California, seeking damages in the U.S. and an injunction in Canada.

The defendant was found liable for violating the plaintiff’s right of publicity in the California action, but the copyright claim was dismissed. The plaintiff had registered the works in his personal name, instead of his company’s, and the federal district court in California found that the registration was invalid. In the U.S. registration is considered either a case process rule or jurisdictional (see Reed Elsevier v. Muchnick); a plaintiff can file suit in Canada without registration, but can only seek an injunction against an innocent infringer. See Canadian Copyright Act Section 39.

The Defendants in Jules Jordan Vide, Inc. v. Elmaleh filed a motion for summary judgment, arguing that one of the two parties, either the individual or the company didn’t have standing. The Court denied and found with that while only one of either the individual or the company owned the copyrights, the motion was best handled at trial.

[The individual]’s “admission” that he owns the copyright is of little value. According to Phipson on Evidence: “Admissions are receivable to prove matters of law…though…these are generally of little weight, being necessarily founded on mere opinion (section 4-11, p. 78)”. The fact that Mr. Gasper is shown on the Canadian Register as owner merely creates a rebuttable presumption in his favour (David Vaver, Copyright Law (Toronto: Irwin Law, 2000) at 247). [Ed: similar to the U.S.]

There are any number of ways in which the relationship between Mr. Gasper and his company could be characterized in law. There is not enough material in the record to allow me to come to any conclusion. For instance, Jules Jordan, as employer, may be the owner pursuant to s. 13 of the Copyright Act, should the necessary conditions have been fulfilled.

Their relationship may be a joint venture, principal and agent, assignor and assignee, or licensor or licensee, be it on an exclusive or non-exclusive basis. Section 36 of the Copyright Act contemplates that an assignor may be named as a co-plaintiff. One might also have to consider the distinction between legal ownership on the one hand, and beneficial ownership on the other. See F.C. Yachts Ltd. v. Splash Holdings Ltd., 2007 FC 1257.

The financial arrangement between the plaintiffs was not probed. How was income treated? Did it all go to Jules Jordan, except for Gasper’s salary? Standing to sue is not a question to be answered simply by looking at the Copyright Register.

Third Circuit holds discovery rules govern claim accrual under the Copyright Act

Shourin Sen - 10 June 2009 – 9:00 am

Filed under Statute of Limitations

William A. Graham Co. v. Haughey, 2009 WL 1564223 (3d. Cir. 2009)

On Friday, the Third Circuit (Scirica, Hardiman, Sloviter writing) issued an order addressing one of the most consistently litigated areas of copyright law. 17 U.S.C. 507(b) provides that “[n]o civil action shall be maintained under the provisions of [the Copyright Act] unless it is commenced within three years after the claim accrued.” The Act, however, doesn’t explicitly state when a claim accrues. As we discussed last week, federal courts have at times adopted two different methods for determining claim accrual under the Copyright Act. If a court applies injury rules, a cause of action accrues at the time of injury; under discovery rules, a claim accrues when the plaintiff discovers, or with due diligence should have discovered, the injury that forms the basis for the claim.

Litigation concerning how to determine when a copyright claim accrues kicked into gear after the Supreme Court’s opinion in TRW Inc. v. Andrews, 534 U.S. 19 (2001). In the case, the Supreme Court addressed a statute of limitations provision from the Fair Credit Reporting Act:

An action to enforce any liability created under this subchapter may be brought . . . not later than the earlier of . . .

(1) 2 years after the date of discovery by the plaintiff of the violation that is the basis for such liability; or

(2) 6 years after the date on which the violation that is the basis for such liability occurs.

The Ninth Circuit interpreted the “6 years” period as incorporating a general discovery rule because Congress hadn’t “expressly legislated otherwise.” The Supreme Court overturned and found that “to the extent such a presumption exists, a matter this case does not oblige us to decide, the Ninth Circuit conspicuously overstated its scope and force.”

So, if TRW cleared away a hard line presumption for the discovery rule, it still left the circuit courts a great deal of latitude for how to interpret statute of limitations provisions, and whether to incorporate a softer presumption for discovery rules. And following the case, as one would expect, courts have at times reached differing interpretations on this question. While many courts have adopted the discovery rule, there are a series of cases where courts have applied the injury rule. See e.g., Auscape International, 409 F.Supp.2d 235 (S.D.N.Y. 2004); Vasquez v. Torres-Negron, 2007 WL 2244784 (S.D.N.Y. 2007); Roberts v. Keith, 2006 WL 547252 (S.D.N.Y. 2006); Med. Educ. Dev. Servs., Inc. v. Reed Elsevier Group, PLC, 2008 WL 4449412 (S.D.N.Y. 2008). To the best of my knowledge (please let me know in the comments if I’m missing anything), the Ninth Circuit is the only other circuit to directly address the issue of when a copyright claim accrues post TRW. Polar Bear Prod., Inc. v. Timex Corporation, 384 F.3d 700 (9th. Cir. 2004).

The Plaintiff in William A. Graham Co. v. Haughey was an insurance brokerage firm. The Defendant was a former sales employee who struck out on his own. The Defendant entered into an agreement with the Plaintiff to purchase some of its accounts. The Plaintiff provided the Defendant with documentation related to the accounts, including extensive proposals, pursuant to a confidentiality agreement. The Defendant later used the proposals to target new clients. Although the alleged infringement took place between 1992 and 2005, the Plaintiff didn’t find out about the infringement until 2004.

The question on appeal was whether the defendant was only liable for the infringement that occurred after 2002 (injury rules) or whether the defendant could be held liable for all of the infringement since 1992, because the plaintiff neither discovered or with due diligence should have discovered the injury (discovery rules). The Third Circuit found that, provided Congress hasn’t codified an “explicit command” or “implication from the structure and text of the statute, a court should apply a general discovery rule.” Regardless, the Third Circuit also found that structure of the Copyright Act favors use of the discovery rule. I’ve quoted here at length because I find the analysis interesting:

USI would have us set aside that analysis, applied by this court less than a year ago, in favor of a single district court decision in another circuit which used the injury rule to determine when claims accrue under the Copyright Act. See Auscape Int’l v. Nat’l Geographic Soc’y, 409 F.Supp.2d 235, 247 (S.D.N.Y.2004). We decline to do so. Even the court in Auscape conceded that “the text and structure of the [Copyright Act] lend no guidance” as to “Congress’ intent with regard to when an infringement claim accrues .” Id. at 244. This concession answers in the negative the first question raised in Disabled in Action: whether “Congress has specified an accrual date by ‘explicit command’ or ‘by implication from the structure and text of the statute.’ “ 539 F.3d at 209 (quoting TRW, 534 U.S. at 27-28).

Further, the text and structure of the Copyright Act actually favor use of the discovery rule. As noted by Graham, criminal actions under the Copyright Act must be “commenced within 5 years after the cause of action arose.” 17 U.S.C. § 507(a) (emphasis added). Just six years prior to the amendment to the Copyright Act that added the civil limitations period now codified at 17 U.S.C. § 507(b), the Supreme Court interpreted language similar to § 507(a)’ s criminal limitations period in the Admiralty Act (“cause of action arises”) to embody the injury rule. McMahon v. United States, 342 U.S. 25-26, 27 (1951); see also TRW, 534 U.S. at 32 (noting that petitioner “offer[ed] a strong argument” that use of the word “arise” in a statute of limitations provision signals congressional intent to adopt the injury rule (citing McMahon, 342 U.S. 25)). Significantly, Congress used different language in the civil limitations provision (“after the claim accrued”), which the Supreme Court had previously interpreted as embodying the discovery rule. See Urie v. Thompson, 337 U.S. 163, 169-170 (1949) (construing “cause of action accrued” in Federal Employers’ Liability Act and holding that statute of limitations was not triggered until injured employee should have known of injury). Given the maxim of statutory construction that “when the legislature uses certain language in one part of the statute and different language in another, the court assumes different meanings were intended,” Sosa v. Alvarez-Machain, 542 U.S. 692, 711 n. 9 (2004) (quotation omitted), Graham persuasively argues that the criminal and civil limitations periods embody different claim accrual rules and that § 507(b) should be interpreted to embody the discovery rule.

USI, once again pointing to Auscape, interprets the legislative history of the Copyright Act’s statute of limitations provision as evidence of congressional intent to adopt the injury rule for civil claims brought pursuant to the Copyright Act. However, Congress provided no “directive” mandating use of the injury rule in that legislative history. Disabled in Action, 539 F.3d at 209.

For example, until the statute of limitations provision now codified at 17 U.S.C. § 507(b) was enacted in 1957, the Copyright Act lacked a statute of limitations period for civil actions and courts borrowed state statutes of limitation for analogous claims. See S.Rep. No. 85-1014 (1957), as reprinted in 1957 U.S.C.C.A.N.1961, 1961-62. USI notes several instances in the legislative history of § 507(b) in which congress persons and witnesses argued that § 507(b) was necessary to provide a “uniform” or “fixed” limitations period. However, these statements reflected dissatisfaction with the use of state statutes of limitations, which ranged from one to eight years and therefore encouraged forum-shopping. See id. at 1962; see also Copyrights-Statute of Limitations: Hearing on H.R. 781 Before H. Comm. on the Judiciary, 84th Cong. 9, 35, 40 (1955) (hereafter “Hearing”). None of these statements addressed the separate issue of when a claim would accrue under the new federal three-year statute of limitations.

USI also relies on a statement in the Senate Report that “due to the nature of publication of works of art … generally the person injured receives reasonably prompt notice or can easily ascertain any infringement of his rights. The committee agrees that 3 years is an appropriate period for a uniform statute of limitations for civil copyright actions and that it would provide an adequate opportunity for the injured party to commence his action.” S.Rep. No. 85-1014 (1957), as reprinted in 1957 U.S.C.C.A.N.1961, 1962. Again, this statement does not speak directly to the accrual of actions, but rather seeks to support the three-year limitations period adopted by Congress. Moreover, the fact that Congress believed that infringement was “generally” a public act does not necessarily imply that, in cases in which infringement was not public, Congress intended to reject application of the discovery rule. Indeed, the quoted passage speaks of whether the injured party has “reasonably prompt notice” of infringement-an inquiry consistent with the discovery rule.

USI next points to what we view as an unenlightening exchange between Representative Shepard J. Crumpacker and a lobbyist for the motion picture industry during a House committee hearing. Representative Crumpacker was concerned that a movie company could make a movie that infringed on a writer’s script, secretly show that movie in a small town, sit on the movie until the statute of limitations passed, and then release the movie generally while claiming that the writer was barred from enforcing his or her rights. Hearing at 47. The lobbyist responded that each performance of the film would constitute a separate act of infringement. Id. at 48. This exchange is not illustrative of Congressional intent regarding when copyright claims accrue, but is cited by USI because the lobbyist also stated that “if [an act of infringement] occurred three years ago … [, then it] would be barred in three years.” Id. That single statement by a witness at a congressional hearing, which no congress person commented on or agreed with, signifies nothing and is hardly a basis to conclude that Congress intended to apply the injury rule.

USI also notes that Congress considered including certain express provisions to permit tolling of the statute of limitations, including where the infringer was guilty of fraudulent concealment, and it argues that the consideration of these exceptions would have been unnecessary had Congress intended to apply the discovery rule to claims under the Copyright Act. Of course, had Congress included those limited exceptions within § 507(b), the holding in TRW might well have inclined us to reject the discovery rule here. But the important fact is that Congress rejected inclusion of any statutory exceptions to the statute of limitations period, and did so because “the Federal district courts, generally, would recognize these equitable defenses anyway.” H. Rep. No. 84-2419, at 2 (1956).

Moreover, the legislative history makes clear that Congress intended the Copyright Act’s statute of limitations to apply “to the remedy of the person affected thereby, and not to his substantive rights,” id., by which Congress meant that “[e]quitable considerations are available to prolong the time for bringing suit,” id. at 3. Further, Congress feared that inclusion of specific statutory exceptions to the three-year limitations period “might result in unfairness to some persons.” S.Rep. No. 85-1014 (1957), as reprinted in 1957 U.S.C.C.A.N.1961, 1963. Thus, this case actually presents the opposite situation as TRW: Congress considered, but rejected, inclusion of specific statutory exceptions to the Copyright Act’s statute of limitations in order to ensure that the courts could consider any equitable circumstances sufficient to excuse a plaintiff’s failure to sue within the three-year limitations period.

Finally, USI argues that use of the discovery rule would be inappropriate as a matter of policy. USI notes that in TRW the Supreme Court stated that it has “recognized a prevailing discovery rule … in two contexts, latent disease and medical malpractice, ‘where the cry for such a rule is loudest.’ “ TRW, 534 U.S. at 27 (quoting Rotella v. Wood, 528 U.S. 549, 555 (2000)). USI would distinguish copyright infringement, arguing that “there is nothing intrinsically ‘hidden’ or ‘latent’ about copyright infringement because it is by its nature a public act that is only very rarely hidden from the copyright owner.” USI’s Reply Br. at 16. That may be true in some instances but not in all. Technological advances such as personal computing and the internet have “ma[de] it more difficult for rights holders to stridently police and protect their copyrights.” John Ramirez, Note, Discovering Injury? The Confused State of the Statute of Limitations for Federal Copyright Infringement, 17 Fordham Intell. Prop. Media & Ent. L.J. 1125, 1158 (2007) (concluding that discovery rule is appropriate for copyright actions).

Bon Jovi’s motion to dismiss defendant’s Lanham Act and misappropriation of name counterclaims denied

Shourin Sen - 9 June 2009 – 9:00 am

Filed under Lanham Act, Misappropriation

AFL Philadelphia LLC v. Krause, 2009 WL 1562992 (E.D. Pa. 2009)

The last time we checked in on this case the Court issued a rather elegant complete preemption and Merell Dow analysis. On Thursday, the Court addressed Bon Jovi’s motion to dismiss the defendant’s Lanham Act and misappropriation of name counterclaims. I’ll let Judge Baylson reintroduce the facts of this case (apparently with help from his clerk):

In sports, as in legal battles, there are winners and there are losers, and the case before this Court tells the tale of both. In the instant matter, the local arena football team the Philadelphia Soul-partially owned by rock icon Jon Bongiovi (also known as Bon Jovi)-rose in a “Blaze of Glory”

to win the 2008 national championship Arena Bowl and then was “Shot Through the Heart”

when its 2009 season was cancelled by the League due to financial problems. The team and League remain “Living on a Prayer”

that they will return in the 2010 season and beyond. In the meantime, the Philadelphia Soul and a former employee are trading accusations concerning the fall-out of the season’s cancellation, in which they each experienced a taste of “Bad Medicine.”

To “kick off” this legal battle, Plaintiffs AFL Philadelphia LLC and Bongiovi brought copyright infringement, trademark infringement, and other assorted actions against [the Defendant]. Responding with a “turnover,” Defendant brought Counterclaims under the Lanham Act and for misappropriation of name. In the “first quarter” of what will undoubtedly be a hard fought battle, this Court will declare Defendant the winner and DENY Plaintiffs’ Motion to Dismiss Defendant’s Counterclaims.

Win.

The defendant was the former director of ticket sales for the Philadelphia Soul, an Arena Football League franchise. The AFL canceled its 2009 season, a move that the defendant claimed was “hugely unpopular” with the Soul’s fans. The AFL’s season ticket holders were apparently irate about a team decision not to immediately issue refunds, and there were press reports of complaints to the AG.

Defendant further alleges the following: after his termination, the Philadelphia Soul sent an email to its fans about the season’s cancellation that falsely designated the origin of the email as having been sent from Defendant’s Philadelphia Soul email address; Defendant did not send the email, had no role in notifying fans of the season’s cancellation, and never authorized the Philadelphia Soul to use his name or email address for such a notification; by this false designation, the Philadelphia Soul sought to cause confusion amongst fans as to Defendant’s association with the unpopular decision to cancel the 2009 season and the resulting controversy over season ticket refunds; and the Soul traded on his good name and reputation amongst the fan base.

Secondary Meaning

The Court cited Lewis v. Marriott Int’l., Inc., 527 F.Supp.2d 422, 426 (E.D.Pa.2007) as analogous precedent, finding that the defendant’s counterclaim sufficiently pled factors that would establish secondary meaning, and that it wasn’t necessary for the defendant to establish secondary meaning between his name and the Philadelphia Soul:

In the instant case, Defendant has pled the following allegations related to secondary meaning: his well known and very favorable reputation in the sports and entertainment business as a media personality and public relations specialist for which Defendant was hired, utilization of Defendant’s reputation and relationships to promote the team and sell tickets, record breaking ticket sales due directly to his efforts, the distribution of an email falsely designated as having been sent from Defendant’s Philadelphia Soul email address, Plaintiffs’ intent to cause confusion amongst fans as to Defendant’s connection with the unpopular email by their false designation, and actual deceit or at least a tendency to deceive the public who received the falsely-designated email. Based on these allegations, the Court finds the following factors tend to show secondary meaning: length of use of Defendant’s favorable reputation in the industry during his tenure as Director of Sales, the extent of sales leading to buyer association based on Defendant’s reputation and relationships, large numbers of sales based on record breaking ticket sales, the fact of copying Defendant’s name by sending the falsely designated email, and actual confusion by the recipients of the email. Although this list represents only five of the eleven factors, Judge Robreno in Lewis denied defendant’s motion to dismiss based on the same factors present here.

Likelihood of Confusion

Bon Jovi argued that the defendant didn’t plead likelihood of confusion because the email did in fact originate from the Philadelphia Soul. The Court found that because the email contained the defendant’s name in the “From” line, it indicated that it “originated from the Defendant, albeit in his role as a Philadelphia Soul employee.”

Misappropriation of Name Claim

The Court found that the defendant adequately pled that Bon Jovi sought to appropriate the value of his name by benefiting from his reputation and prestige.

BrighTALK “Copyright War” Summit Tomorrow

Shourin Sen - 8 June 2009 – 9:16 am

Filed under News

BrightTALK will host a group of webcasts on the “Copyright War” tomorrow:

This summit will explore the latest developments and theories in copyright law for a digital age. It aims to present viewpoints from all sides of the discussion, from academics, inventors, IP owners, legal professionals and software developers, among others.

Presentations include, among others:

“Recording Industry vs. the People” — Ray Beckerman, Attorney at Law, Ray Beckerman, P.C.
“Anti-Counterfeiting Trade Agreement (ACTA), WIPO and in Canada” — Howard Knopf, Moffat & Co. , Macera & Jarzyna LLP
“Online Legal Issues: Facebook, MySpace, Twitter, YouTube, Blogs” — Jefferson Coulter, Member, www.coultertm.com/about.html
“Successfully Defending Software Audits” — Robert J. Scott, Managing Partner, Scott & Scott, LLP
“Creative Commons: The Sharing Standard” — Fred Benenson, Outreach Manager, Creative Commons

You can see the rest of the roster and register (for free) for the summit at: http://www.brighttalk.com/summit/copyrightwar.

An adept decision addressing the copyright registration backlog

Shourin Sen - 5 June 2009 – 9:00 am

Filed under Copyright Office, Jurisdiction, Registration

Tri-Marketing, Inc. v. Mainstream Marketing Services, Inc., 2009 WL 1408741 (D. Minn. 2009)

I’ve spent a couple of posts over the past few weeks discussing how courts are dealing with the registration backlog at the Copyright Office. To briefly review, due to what appear to be temporary troubles implementing a new electronic registration system, the backlog for paper registration at the Copyright Office has grown from six to eighteen months. There was a decision issued on May 19 by Judge Donovan W. Frank from the federal district court in St. Paul that adeptly dealt with this issue. Tri-Marketing and Mainstream Marketing are telemarketing companies that generate leads for the insurance industry. Tri-Marketing alleged that Mainstream infringed its copyright in its website. Here’s the relevant passage dealing with the registration backlog (emphasis mine):

TRI operates a website that provides information about its business and allows for the purchase of its services. TRI updated its website in both 2004 and 2007. On April 3, 2008, TRI sought copyright registration for both the 2004 and 2007 websites by delivering a deposit of both websites, two corresponding Form TX applications, and two $45 fees to the Copyright Office. Bolder Calls updated its website in November 2005 and again in December 2007. According to TRI, Bolder Calls copied elements of TRI’s 2004 and 2007 websites. TRI notified Bolder Calls of its alleged infringement on February 19, 2008.

Why is this paragraph particularly notable? As we encountered in Facebook v. Power Ventures, the primary situation where a court risks running into a mudstorm by allowing a case to proceed after a copyright registration is filed, but before the Copyright Office has issued a ruling on the registration, occurs when there is a dispute about what rendition of a work is underlying an infringement claim. This situation seems to me to arise most often with websites, where a plaintiff can make many amendments in a short period of time. To give a hypo for this problem, let’s say around the time a copyright holder files a registration for a website, she makes twenty different changes to the website. All of the versions of the website would of course be granted copyright, but the copyright owner can only bring suit for the portions of the work that she has registered. Without being able to resort to a copyright registration to see exactly what rendition of the website is underlying the claim, there is no way for the litigants or the tribunal to be sure of the boundaries of the suit.

So back to Tri-Marketing, Inc v. Mainstream Marketing Services: The Plaintiff claimed infringement of a website, the type of work that may cause trouble if the Court were to allow the case to proceed before the Copyright Office has issued a decision. By noting that all of the versions of the website were included in the registration application, the Court discounted the possibility that the suit would proceed without the parties being sure of the breadth of the copyright claim.

A second reason I like the above paragraph is that the Court didn’t shy away from the fact that the registration was filed thirteen months prior to the decision. This is an important piece of information, I think, if this case were to head for appeal. The Court found that since there was no Eighth Circuit precedent directly on point, the interests of justice and judicial economy favored letting the litigation proceed sans Copyright Office determination:

The Court recognizes the split of authority on this issue and notes that it is aware of no Eighth Circuit case directly on point. After reviewing the relevant and persuasive case law and the reasons supporting the two separate approaches, this Court endorses the “application approach” to federal jurisdiction over copyright claims. First, the language used in Action Tapes by the Eighth Circuit suggests that it would adopt the application approach. See Action Tapes, 462 F.2d at 1013 (“However, the copyright owner may not sue for infringement under the federal Copyright Act until the owner has delivered ‘the deposit, application, and fee required for registration …’ ”). Second, the application approach promotes the interests of justice and judicial economy. See, e.g., Int’l Kitchen Exhaust Cleaning Assoc., 81 F.Supp.2d at 72. Because TRI alleges that it has properly delivered the deposit, application, and fee required for the registration of the asserted copyrights, the court finds that it has subject matter jurisdiction over TRI’s copyright claims.

In related news

The Copyright Office this past Friday issued a press release concerning its processing time. This strikes me as a prudent move that allows courts to take judicial notice of an official release when determining whether to allow a claim to proceed without a copyright office determination.

Copyright Office Improves Processing Time and Service

A recent Washington Post article focused on the lengthy processing times the Copyright Office is experiencing in wake of its transition from a paper-based to an electronic processing environment. The Copyright Office is working diligently to improve processing times and service to the public in general. To clarify, current processing times by filing method are as follows:

E-Service with Electronic Deposit: 5 months for 90% to be completed; 33% completed in 2.5 months

E-Service with Physical Deposit: 6.5 months for 90% to be completed; 33% completed in 3 months

Paper Claims: 18 months for 90% to be completed; 33% completed in 12 months

You can save money and time and help us improve our services by filing claims online via eCO. Please visit www.copyright.gov for more information.

Equitable tolling of the SOL for filing a timely action that is dismissed for lack of personal jurisdiction

Shourin Sen - 4 June 2009 – 9:00 am

Filed under Statute of Limitations

L.A. Printex Industries, Inc. v. At Last Sportswear, Inc., 2009 WL 1285923 (S.D.N.Y. 2009)

This decision is almost a month old but I’ve been meaning to write about it for a while. As many of you know, the Copyright Act states that a copyright owner must commence a suit “within three years after the claim accrued.” The Copyright Act, however, doesn’t explicitly state when a claim accrues. Federal courts have at times used two different rules for determining when a claim for copyright infringement accrues: under the injury rule, a claim accrues at the time of infringement; under the discovery rule, accrual often occurs later, at the time a “plaintiff knows of the infringement or is chargeable with such knowledge.” See Bridgeport Music Inc. v. Diamond Time, Ltd., 371 F.3d 883 (6th Cir. 2004).

Nowhere is there as many divergent decision by district courts in regards to the statue of limitations than in the Second Circuit. On May 4, Judge Jed S. Rakoff issued an order finding that the Court didn’t need to decide what rule to apply because the statute of limitations was equitably tolled because the plaintiff had filed a complaint in the Central District of California, which was dismissed for lack of personal jurisdiction. I may be reading too much into the decision, such is the state of armchair quarterbacking, but it almost seems like the Court was relieved not to have to decide the issue:

Defendant urges this Court to join several other courts in this district in finding that the 2001 Supreme Court decision TRW Inc. v. Andrews, 534 U.S. 19 (2001), necessitates reconsideration of the Second Circuit’s previous adoption of a discovery rule. See Auscape International, 409 F.Supp.2d 235 (S.D.N.Y.2004); Vasquez v. Torres-Negron, No. 06 Civ. 819, 2007 WL 2244784, at *5 (S.D.N.Y. Jul. 11, 2007); Roberts v. Keith, No. 04 Civ. 10079, 2006 WL 547252, at *2-3 (S.D.N.Y. Mar. 7, 2006); Med. Educ. Dev. Servs., Inc. v. Reed Elsevier Group, PLC, No. 05 Civ. 8665, 2008 WL 4449412, at *10 (S.D.N.Y. Sept. 30, 2008). Plaintiff argues, in response, that the Second Circuit’s pre- TRW rule remains the law in this Circuit and, unless changed by the Court of Appeals itself, must be followed. Cf. Home Design Servs., Inc. v. B & B Custom Homes, LLC, 509 F.Supp.2d 968 (D.Colo.2007) (rejecting the argument that TRW mandates the reassessment of the discovery rule in the copyright context).

The Court need not resolve this issue, however, because the Court finds that the statute of limitations was equitably tolled for a period sufficient to defeat defendant’s claim that the statute of limitations has run.

* * * * *

Here, plaintiff filed a timely action against At Last on May 15, 2008 in the Central District of California. It litigated defendant’s motion to dismiss for lack of personal jurisdiction, and then, when the California Action was dismissed, it filed the instant action within three weeks, a span of time that suggests reasonable diligence, see Abbas v. Dixon, 480 F.3d 636, 642 (2d Cir.2007) (noting that “[d]ue diligence on the part of the plaintiff in bringing an action … is an essential element of equitable relief”) (quotation marks and alterations deleted).

Defendant attempts to characterize plaintiff as a chronic litigator, but there is nothing to suggest that the instant action is frivolous and a copyright holder is understandably assiduous in defense of its copyright. Defendant also argues that plaintiff should have either abandoned the California Action when defendant filed its motion to dismiss in the California Action-at which point the statute of limitations had not run under any rule-or moved for transfer of venue when personal jurisdiction was found not to exist. The Court does not believe, however, that plaintiff was obligated to abandon the California Action mid-stream just because defendant asserted it was not subject to personal jurisdiction. And while plaintiff, as it now acknowledges, could have avoided the statute of limitations problem altogether by seeking transfer, nonetheless, given the fact that plaintiff promptly brought suit in the Southern District of New York after the California Action was dismissed, the Court does not see this
oversight as reason to deny plaintiff equitable tolling.

As the Supreme Court has noted, “[w]hen a lawsuit is filed, that filing shows a desire on the part of the plaintiff to begin his case and thereby toll whatever statutes of limitation would otherwise apply.” Goldlawr, Inc. v. Heiman, 369 U.S. 463, 467 (1962). Defendant has been on notice since at least May 15, 2008 that it will be called upon to defend against plaintiff’s lawsuit and cannot claim that it suffers any prejudice as a result of plaintiff’s actions.

Accordingly, the Court finds that the statute of limitations was equitably tolled during the four and one-half months that the California Action was pending. The instant action was therefore timely brought regardless of whether an injury rule or a discovery rule is applied. Defendant’s motion to dismiss is therefore denied.

SG on Cablevision cert petition: “[A]rtificial truncation of the possible grounds for decision would make this case an unsuitable vehicle for clarifying the proper application of copyright principles”

Shourin Sen - 1 June 2009 – 9:00 am

Filed under Supreme Court

Cable News Network, Inc., et al. v. CSC Holdings, Inc., et al. (Brief for the United States as Amicus Curiae)

The big news from this weekend is that the Solicitor General has filed a brief arguing against the Supreme Court granting cert in Cable News Network v. CSC Holdings. The SG’s amicus brief was filed in response to an order from the Supreme Court inviting the United States to weigh in on the case. To briefly review, Cablevision planned to offer a DVR-like service. The service would differ from preexisting DVRs in that it would allow users to record content housed on a hard drive at Cablevision locations, and not on a DVR at a user’s home. A group of content companies brought suit for copyright infringement arguing that Cablevision, by providing the service, would directly infringe their works. The Second Circuit found that (1) buffer copies weren’t sufficiently fixed to be considered copies for purposes of liability for copyright infringement; (2) even though Cablevision would house the content on its servers, it the consumers would make the copies; and (3), the playing of the content by consumers wouldn’t constitute a public performance.

The Solicitor General made two arguments against granting cert:

No Circuit split or conflict with Supreme Court precedent

The SG’s first argument was that the Second Circuit’s decision doesn’t conflict with precedent from other Circuit Courts or the Supreme Court:

The Second Circuit is the first appellate court to address the copyright implications of the shift from a set-top-based to a network-based system of enabling consumers to record and play back television programs of their own choosing. The decisions on which petitioners rely addressed different technologies and arose in different factual contexts. As a result, there is no conflict between the outcome of this case and any previous decision.

The Second Circuit’s decision, however, is unlikely to be the last appellate ruling to address these issues. Other cable providers may initiate services that are similar to respondents’ RS-DVR. Analogous issues also may arise with respect to other network-based services for copying and playing back copyrighted works. Deferring review of the legal issues raised by various network-based playback technologies would allow those
issues to be more fully explored by litigants and the lower courts. This Court would then be in a better position to address the legal significance, if any, of the differences between various technologies and services.

Stipulations make the case a bad vehicle for deciding issues

Secondly, the SG argued that the parties’ agreement not to litigate fair use and secondary liability made the case an unsuitable vehicle for clarifying the legal framework surrounding the RS-DVR:

Petitioners argue that the Court should use this case to “set a standard for copyright protection in the marketplace of automated access to and delivery of copyrighted works.” This case, however, presents an unsuitable vehicle for clarifying the applicable legal framework because the parties’ agreement not to litigate two critical issues—secondary liability and fair use—distorts the questions that remain and would prevent the Court from seeing whole the fundamental controversy in this case.

Less than a month into this litigation, the parties stipulated that petitioners would not pursue any claims based on principles of secondary liability, and that respondents would not raise any fair-use defense. As a result, neither the district court nor the court of appeals addressed those issues, and this Court would have no opportunity to consider them if it granted review. This case therefore presents no opportunity for the Court to “have the final say” even as to the legality of the particular (and currently unique) RSDVR service that respondents seek to offer.

Other commentators on the brief

Sherwin Siy from Public Knowledge:

This brief is a heartening development, showing that the Solicitor General’s office has made a thorough and thoughtful intervention. Hopefully the Court will think so as well.

Ben Sheffner from Copyrights & Campaigns:

Of course, DoJ does not get the last word; its brief is only a recommendation, which the Supreme Court is under no obligation to follow. That said, the Court does accord considerable respect to the solicitor general’s opinions, and the chances of cert. being granted — a long-shot in any case — just dropped dramatically.

John Palfrey from the Berkman Center: