Monthly Archives: November 2009

Towle on revising boilerplate to reflect developments in ecommerce

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Filed under Transactional

I don’t raise transactional issues as often as I should. Raymond Nimmer points on his blog to a new article by Holly K. Towle on how to update licensing agreement boilerplate to reflect developments in ecommerce. Ms. Towle is a partner with K&L Gates and co-author, along with Professor Nimmer, of The Law of Electronic Commercial Transactions.

The article provides a nice overview of a series of different topics including, among other things, changes to what constitutes written notice and a signature under the E-Sign Act; amendment clauses after the E-Sign Act; and merger, force majeure, integration, audit, and damage limitation provisions in ecommerce agreements.

business and transactions attorneys

Quality King injunction retroactively vacated

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Filed under Vacatur of Injunction

Matrix Essentials v. Quality King Distributors, Inc., 90-CV-1070 (E.D.N.Y. 2009)

The Eastern District of New York found on Friday that a 1990 injunction entered between Quality King and Matrix Essentials was retroactively vacated to 2002, when the first proven breach of the injunction occurred:

The dramatic change in the diversion market from 1990 (when the consent decree was issued), to the period for which L’Oreal seeks damages (2002-2007), is sufficient, in the court’s view, to justify retroactive vacatur.  Other factors, however, also support the court’s conclusion.  As noted in Matrix I, the re-sale of untainted product is completely lawful, as it can support neither a claim of unfair competition nor trademark infringement.  See Matrix I, 522 F.Supp.2d at 478.  There was never an allegation that product sold during the time period of 2002-2007 was in any way tainted or mislabeled.  Accordingly, there is no question but that the conduct engaged in by Defendants, and the Pro’s Choice Parties was, in the absence of the 1990 Incunciton, completely lawful. Finally, the fact that the 1990 Injunction was entereed into upon consent of the parties, and not after any hearing or findings by the court, weighs in favor of retroactive vacatur.

(H/t Daniel Ballard for the docs, the highlighting and the pointer.)

trademark attorneys

Second Circuit rejects copyright misuse as a cause of action

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Filed under Misuse

Lava Records LLC v. Amurao, 2009 WL 3806366 (2d Cir. 2009)

The Defendant-Counterclaimant appealed a judgment from the Southern District of New York that denied him attorneys’ fees and rejected his counterclaim for copyright misuse. The Appellant argued that copyright misuse was not only an affirmative defense to a claim of copyright infringement, but a cause of action in and of itself.  Copyright misuse, as many are you are familiar, is most often viewed as a defense to a hodgepodge of situations where a copyright owner tries to leverage their copyright beyond the scope intended in the Act, such as through anti-competitive behavior or overbroad infringement claims.

The Second Circuit rejected the argument that it should create a cause of action for copyright misuse:

We also decline to create an independent cause of action for “copyright misuse,” as Amurao urges us to do. Amurao, who has cited no case in which “copyright misuse” was allowed as an independent cause of action for damages rather than as a defense to an infringement claim, has not made a persuasive case for the creation of such a cause of action here.

copyright litigation attorneys

Apple granted summary judgment on its copyright infringement and DMCA claims against Psystar

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Filed under Software

Apple, Inc. v. Psystar Corp., 08-03251 WHA (N.D. Cal. 2009)

Apple won a thorough victory on Friday in its suit against Pystar Corp.  Apple distributed its Mac OS X operating system under a license where customers were contractually precluded from using the operating system on non-Apple computers. Psystar modified Apple’s operating system to run on computers that it sold. In the motion at bar, Apple was granted summary judgment on a series of claims, including direct infringement, contributory infringement, and violation of the DMCA. The Court also rejected Psystar’s 117 defense, copyright and trademark fair use defenses, and copyright misuse defense.

Apple’s remaining claims left for trial are (1) breach of contract; (2) induced breach of contract, (3) trademark infringement; (4) trademark dilution; (5) trade dress infringement; and (6) state unfair competition under California Business and Professions Code § 17200; and (7) common law unfair competition.

copyright litigation attorneys

Exclusive Rights is now on facebook

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Filed under Meta

Hi All,

There was a great WordPress plugin released recently that allows bloggers to stream an RSS feed on facebook using facebook’s new WordPress interface capabilities.  Pretty darn cool. If any of you prefer to follow Exclusive Rights on facebook and learn of new posts from wall updates, you can “friend” the blog at facebook.com/exclusiverights. How’s that for Web 2.0?

In other news, Exclusive Rights topped 300 followers on RSS and 100 on Twitter a couple of weeks ago. Thanks for reading.

copyright attorneys

Form 19 and oral arguments in Reed Elesevier v. Muchnick

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Filed under Registration, Supreme Court

There’s a section of last month’s Supreme Court oral arguments in Reed Elsevier v. Muchnick that I’ve been meaning to point to for a while. Counsel for the Petitioners, when arguing that registration is a case processing rule and not jurisdictional, raised Form 19:

MR. SIMS: . . . This Court’s own forms for copyright infringement, which were first promulgated in the 1930s, have patterned our argument and are contrary to the amicuses’. They have always treated the registration provision of the model complaint differently from the jurisdictional provisions. Those are in separate sections, not next to each other even.
CHIEF JUSTICE ROBERTS: We have forms for copyright infringement actions?
MR. SIMS: You do. The Federal Rule –
(Laughter.)
CHIEF JUSTICE ROBERTS: Live and learn.
MR. SIMS: And because they haven’t changed very much in 70 years, you probably haven’t spent much time with them.
JUSTICE GINSBURG: It’S Form 19.
MR. SIMS: Yes. It was originally Form 17. We have gone through the history. But I think there is really only one change and in every respect it is identical to what it was in 1938. And, again, as I say, it separates out the registration provision from the jurisdictional provision.

The federal Forms are adopted under Federal Rules of Civil Procedure Rule 84, which states that they are “sufficient under the [F.R.C.P.] and are intended to indicate the simplicity and brevity of statement which the rules contemplate.” (I like Chief Justice Roberts was unaware of Form 19.) Petitioners made the rather clever argument that registration was historically not a jurisdictional requirement through the fact that registration wasn’t included in the Form’s jurisdiction section:

COMPLAINT FOR COPYRIGHT INFRINGEMENT

AND UNFAIR COMPETITION

1.         <Statement of Jurisdiction.  See Form 7.>

<a.  For diversity-of-citizenship jurisdiction.> The plaintiff is [a citizen of State A] [a corporation incorporated under the laws of State A with its principal place of business in State A].  The defendant is [a citizen of State B] [a corporation incorporated under the laws of State B with its principal place of business in State B].  The amount in controversy, without interest and costs, exceeds the sum or value specified by 28 U.S.C. § 1332.

<b.  For federal-question jurisdiction.> This action arises under [the United States Constitution; specify the article or amendment and the section] [a United States treaty; specify] [a federal statute, ___U.S.C. § ___].

<c.  For a claim in the admiralty or maritime jurisdiction.> This is a case of admiralty or maritime jurisdiction.  <To invoke admiralty status under Rule 9(h) use the following:  This is an admiralty or maritime claim within the meaning of Rule 9(h).>

2.         Before <Date>, the plaintiff, a United States citizen, wrote a book entitled ____________ _________________________________________________.

3.         The book is an original work that may be copyrighted under United States law.  A copy of the book is attached as Exhibit A.

4.         Between <Date> and <Date>, the plaintiff applied to the copyright office and received a certificate of registration dated <Date> and identified as <Date, Class, Number>.

5.         Since <Date>, the plaintiff has either published or licensed for publication all copies of the book in compliance with the copyright laws and has remained the sole owner of the copyright.

6.         After the copyright was issued, the defendant infringed the copyright by publishing and selling a book entitled <______________>, which was copied largely from the plaintiff’s book.  A copy of the defendant’s book is attached as Exhibit B.

7.         The plaintiff has notified the defendant in writing of the infringement.

8.         The defendant continues to infringe the copyright by continuing to publish and sell the infringing book in violation of the copyright, and further has engaged in unfair trade practices and unfair competition in connection with its publication and sale of the infringing book, thus causing irreparable damage.

Therefore, the plaintiff demands that:

(a)        until this case is decided the defendant and the defendant’s agents be enjoined from disposing of any copies of the defendant’s book by sale or otherwise;

(b)        the defendant account for and pay as damages to the plaintiff all profits and advantages gained from unfair trade practices and unfair competition in selling the defendant’s book, and all profits and advantages gained from infringing the plaintiff’s copyright (but no less than the statutory minimum);

(c)        the defendant deliver for impoundment all copies of the book in the defendant’s possession or control and deliver for destruction all infringing copies and all plates, molds, and other materials for making infringing copies;

(d)       the defendant pay the plaintiff interest, costs, and reasonable attorney’s fees; and

(e)        the plaintiff be awarded any other just relief.

Date:  <Date> <Signature of the attorney or unrepresented party>

________________________________________

<Printed name>

<Address>

<E-mail address>

<Telephone number>

publishing attorneys

A&E denied motion to dismiss claim stemming from its use of “Rocky Top” for 12-14 seconds

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Filed under Fair Use

House of Bryant Publications, LLC v. A & E Television Networks, 2009 WL 3673055 (M.D. Tenn. 2009)

The Plaintiff was the copyright owner of the musical composition “Rocky Top,” the state song of Tennessee. The Defendant, cable television network A&E, was involved in the production and distribution of a show City Confidential.  One episode from the show, which ran around forty-seven minutes in length, featured a section on Knoxville, Tennessee’s cultural scene (“and, as the stark-raving orange clad masses will attest, they play a little football too.”)

The show featured the UT marching band playing “Rocky Top” for six to seven seconds, where the song was clearly heard; and then, after a break of five to six seconds, the song reappeared less prominently for another six to seven seconds. The Plaintiff brought suit alleging that A&E’s use of the “Rocky Top” in the program was an unauthorized infringing use. A&E moved to dismiss arguing fair use, which the Court denied.

Judicial notice

The Plaintiff filed its complaint without attaching a copy of “Rocky Top” or the allegedly infringing show. A&E asked the Court to take judicial notice of the sheet music and it’s television show so that it’s motion to dismiss wouldn’t be converted into a motion for summary judgment.  Federal Rule of Civil Procedure 12(d) states that if “matters outside the pleadings are presented to and not excluded by the court, the [Rule 12(b)(6) ] motion must be treated as one for summary judgment under Rule 56.”

The Court found that the discussion of judicial notice was unnecessary and instead found that it could consider the sheet music and the television episode part of the pleadings:

[U]nder certain circumstances, material “that is not formally incorporated by reference or attached to a complaint may still be considered part of the pleadings.” Greenberg v. Life Ins. Co. of Virginia, 177 F.3d 507, 514 (6th Cir.1999) (internal citations and quotations omitted) (discussing “documents” not attached to the complaint, but not limiting the potential scope of the rule thereto). This occurs when material “is referred to in the complaint and is central to the plaintiff’s claim…. In such event, the defendant may submit an authentic copy to the court to be considered on a motion to dismiss, and the court’s consideration of the [material] does not require conversion of the motion to one for summary judgment.” Id. The Sixth Circuit has also noted that “a defendant may introduce certain pertinent documents if the plaintiff fails to do so…. Otherwise, a plaintiff with a legally deficient claim could survive a motion to dismiss simply by failing to attach a dispositive document upon which it relied.” Weiner v. Klais & Co., Inc., 108 F.3d 86, 89 (6th Cir.1997).

Fair use

The Court, perhaps looking to encourage a settlement,  found that dismissing the claims on fair use grounds was improper at the stage of the proceedings.  Both the Plaintiffs and A&E used Lennon v. Premise Media Corp., 556 F.Supp.2d 310 (S.D.N.Y.2008) as precedent.  In that case, Lennon’s estate sued the producers and directors of a movie over the unauthorized use of fifteen seconds of “Imagine.” The filmmakers used the song as a background during a section of their movie that argued that scientists who advocate  society should abandon religion were “lifting a page of John Lennon’s songbook.” The Court in House of Bryant distinguished the current case from Lennon, where the S.D.N.Y. found the use was transformative, on the grounds that in Lennon there were affidavits and declarations identifying transformative aspects:

Here, because the defendant seeks the dismissal of the plaintiff’s Complaint without the benefit of discovery, there is nothing to “ease” the court’s task of finding a transformative use. Moreover, in contrast with Lennon, the transformative nature of “Rocky Top” is unapparent from a basic viewing of the Episode. In the Episode, there is no allusion to “Rocky Top” prior to its playing, and there is no perceptible attempt to actually place “Rocky Top” in any sort of larger context. As indicated above, just before “Rocky Top” plays, there is a general discussion of UT being a haven for college football, but there is no commentary, criticism or even discussion of “Rocky Top.” Rather, basically, the excerpt from “Rocky Top” simply plays, fades, and then stops, and the Episode moves on to the next topic.

music attorneys

6th Cir. finds that jury fair use instructions not erroneous

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Filed under Fair Use, Jury Instructions

Bridgeport Music, Inc. v. UMG Recordings, Inc., 2009 WL 3617470 (6th Cir. 2009)

This past summer there was a storm of discussion on the intertubes about whether fair use was a question that was appropriate for a jury, or whether it was exclusively the domain of judges. The question arose in Sony v. Tenenbaum when Judge Gertner asked the parties to brief whether “fair use was historically treated as an equitable defense and, if so, whether it is properly decided by the judge or a jury.”

The Court in Tennenbaum recognized that many courts have labeled fair use an equitable defense, and that generally equitable defenses, such as latches and acquiescence, historically were the province of judges, not juries.  The Tenenbaum Court, however, noted that authorities on the issue were “conflicting” or “imprecise,” and that there has been a string of decisions finding that fair use is appropriate for a jury:

Jartech, Inc. v. Clancy, 666 F.2d 403 (9th Cir. 1982) (upholding special jury verdict finding that defendants’ use of films was fair use); BUC INt’l Corp. v. Int’l Yacht Council, 489 F.3d 1129, 1137 (11th Cir. 2007) (noting that fair use defense was presented to the jury); New York Univ. v. Planet Earth Found, 163 Fed. Appx 13 (2d. Cir. 2005) (upholding the jury’s fair use finding; see also Roy Export Co. Estab of Vaduz Liech Black Inc. v. Columbia Broad Sys. Inc., 503 F.Supp. 1137 (D.C.N.Y. 1980) citing Meeropol v. Nizer, 560 F.2d 1061, 1071 (2d. Cir. 1977) (characterizing fair use as a question for the jury to decide)); Harris v. San Jose Mercury News, Inc., No. C 04-05262 CRB, 2006 WL 995151, at 1 (N.D. Cal. Apr. 10, 2006) (raising fair use as a mixed question of law and fact, yet declaring the issue more appropriately resolved by a jury even when facts were not in dispute.)

William Patry also weighed in at the time on Tenenbaum’s counsel’s blog, stating that “[t]he occasional statements about fair use being an equitable defense are, in my opinion ahistorical (Judge Leval agrees).”

Well, we can add another to the list of fair use jury cases. Bridgeport alleged that the song “D.O.G. in Me,” by the R&B group Public Announcement, a UMG recording artist, infringed George Clinton’s work “Atomic Dog.”A jury found UMG liable for infringement, rejecting a fair use defense.

On appeal, UMG argued that the District Court’s fair use charge was “erroneous” and “prevented the jury from considering its fair-use defense, i.e., that copying certain elements from “Atomic Dog” in “D.O.G. in Me” was intended as an homage or tribute and that a properly instructed jury would have concluded that the use of these elements for that purpose was fair.” The Sixth Circuit rejected the argument finding that the instructions were not erroneous:

Specifically, the defendant assigns error to the district court’s charge to the jury that an homage or tribute is “not necessarily fair use.” That charge is, however, an accurate statement of the law. See 17 U.S.C. § 107 (purpose and character of the use is only one factor); Campbell, 510 U.S. at 578-90 (weighing all factors in light of the purposes of copyright). Moreover, UMG failed to introduce any evidence that would have explained why the songwriter chose to include elements of “Atomic Dog” to honor George Clinton, nor was the purported tribute acknowledged in the credits or liner notes to the album.

music attorneys

7th Cir opines on originality standard for derivative works

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Filed under Derivative Work

Schrock, Daniel v. Learning Curve International, Inc., 08-1296 (7th Cir. 2009)

HIT Entertainment granted Learning Curve a license, which was not part of the record, to make “Thomas & Friends” train toys.  Learning Curve hired a photographer to take promotional shots of the toys. After four years, the relationship between Learning Curve and the photographer soured. Learning Curve continued to distribute the promotional shots in advertisement and on the internet. The photographer registered the promotional photos and brought suit against Learning Curve and HIT alleging infringement.

The District Court granted summary judgment for Learning Curve finding that the images were a derivative work of the toys, and that the photographer needed both [1] permission from Learning Curve to make the photographs; and [2] permission from Learning Curve to have a copyright in the derivative works. Since Learning Curve never explicitly granted the photographer the right to make a derivative work, said the District Court, the photographer never had a copyright in the photos.

The Seventh Circuit reversed finding that, assuming there was no agreement to the contrary,  the photographer only needed permission to take the pictures, not permission to obtain a copyright in the works. The Seventh Circuit relied on their holding in See Liu v. Price Waterhouse LLP, 302 F.3d 749, 755 (7th Cir. 2002) (Kanne, J., writing), as opposed to language from Gracen v. Bradford Exchange, 698 F.2d 300 (7th Cir. 1983) (Posner, J., writing), which suggesting that explicit permission was required for an author to have a copyright in a derivative work, not just permission to make the work.

Originality and derivative works

The Seventh Circuit, assuming that the photos were derivative works for the purposes of the opinion, found that the promotional photos “possessed sufficient incremental original expression to qualify for copyright.” The Seventh Circuit opined that Gracen’s statement that “a derivative work must be substantially different from the underlying work to be copyrightable,” 698 F.2d at 305, “should not be understood to require a heightened standard of originality for copyright in a derivative work.” The Seventh Circuit instead looked to Buckew and found that “the only ‘originality’ required for [a] new work to be copyrightable . . . is enough expressive variation from public-domain or other existing works to enable the new work to be readily distinguished from its predecessors.” Bucklew v. Hawkins, Ash, Baptie & Co., LLP, 329 F.3d 923, 929 (7th Cir. 2003) (Ponser, J., writing).

Remand

The Seventh Circuit remanded the case for further findings on whether the photographer granted HIT and Learning Curve an oral non-exclusive license in the photos; and to see whether Learning Curve had the power to authorize the photographer to make the photos, under the licensing agreement between HIT and Learning Curve.

(H/t Rebecca Tushnet.)

copyright litigation attorneys

Glenn Beck

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Filed under ICANN

Is there any other figure in American politics whose name alone conjures such heated emotions? I’m not sure I can think of any.

Some of you may be aware  of an internet meme which took root in early September, “Is Glenn Beck the one responsible for raping and murdering a girl in 1990?” The inflammatory question, which is meant to play on Beck’s style of making accusations and then noting that they haven’t been refuted, began on a Fark board and spread like fire, finding a focal point within a day on the website glennbeckrapedandmurderedayounggirlin1990.com. Two days later, Beck filed an ICANN complaint through WIPO.

T.D. Ruth has written a three part series on the affair, Beck’s complaint, and the responsive pleadings at The Brown Tweed Society. The series is definitely worth a click-through:

trademark attorneys