The California First Appellate District (Marchiano, Margulies, Dondero writing) issued a First Amendment decision in an interesting right of publicity case on Thursday. The class action plaintiffs were a group of one hundred and eighty-six Indie Rock musicians whose band names were featured in a centerfold spread “Indie Rock Universe” in the November 15, 2007 issue of Rolling Stone.

The spread contained five pages of content and four pages of advertisements for Camel cigarettes. The plaintiffs brought three claims against Rolling Stone and R.J. Reynolds: (1) the unauthorized use of name in violation of California Civil Code section 3344, (2) a common law right of publicity claim for unauthorized use of name for commercial advantage, and (3) a claim for unfair competition claim for violation of California Business and Professions Code sections 17200-17203.

At bar, Rolling Stone appealed from the trial court’s order denying its special motion to strike a class action complaint under California’s Anti-SLAPP provisions. Rolling Stone (R.J. Reynolds wasn’t a party on appeal) argued that  there wasn’t a triable issue as to whether the foldout constituted commercial speech, and that the plaintiffs did not present evidence sufficient to establish that they had a probability of prevailing on the merits. The California Court of Appeals agreed and reversed, finding that Rolling Stone was shielded by the First Amendment’s Freedom of Speech and Press protections.

Simply put, there is no legal precedent for converting noncommercial speech into commercial speech merely based on its proximity to the latter. There is also no precedent for converting a noncommercial speaker into a commercial speaker in the absence of any direct interest in the product or service being sold. We thus conclude that the Feature is noncommercial speech.

The Court of Appeals next looked to New York Times Co. v. Sullivan, 376 U.S. 254, 279-280 (1964)  for the proposition that a “plaintiff who is either a public official or public figure may not recover damages for defamation absent proof that the defendant published defamatory statements with ‘actual malice,’ that is, either with knowledge of their falsity or with reckless disregard for the truth.” The Court of Appeals found that as non-commercial speech the plaintiff needed to show actual malice for the commercial misappropriation claims brought under the common law and Section 3344. The Court dismissed finding that the plaintiff could not present evidence that would surmount the First Amendment defense.

Freedom of Press

It is well established that “The choice of material to go into a newspaper, and the decisions made as to limitations on the size and content of the paper, and treatment of public issues and public officials-whether fair or unfair-constitute the exercise of editorial control and judgment. It has yet to be demonstrated how governmental regulation of this crucial process can be exercised consistent with First Amendment guarantees of a free press as they have evolved to this time.” ( Miami Herald Publishing Co., Division of Knight Newspapers, Inc. v. Tornillo (1974) 418 U.S. 241, 258 [41 L.Ed.2d 730, 94 S.Ct. 2831].) “[T]he courts have long held that the right to control the content of a privately published newspaper rests entirely with the newspaper’s publisher. The First Amendment protects the newspaper itself, and grants it a virtually unfettered right to choose what to print and what not to.” ( Eisenberg v. Alameda Newspapers, Inc. (1999) 74 Cal.App.4th 1359, 1391 [88 Cal.Rptr.2d 802].)

There are a number of new copyright decisions issued in Australia over the last couple of weeks that look worthy of a mention.  The plaintiff in Rutter v. Brookland was an internationally renowned flautist.  The defendant was a winery that launched a brand marketed around the flute-playing Greek God Pan. The winery asked the plaintiff flautist to compose an original piece of music that would be included on a promotional CD; perform a series of shows to market the wine; and provide the winery with manuscript of the original composition for reproduction on the wine series’ label. The flautist agreed to license her composition and name for promotional purposes for a twelve month period.

The winery continued to use twelve bars of the composition on its wine labels after the expiration of the licensing agreement. It later revised the wine label to include four bars of the composition. The Honourable Justice Buchanan found that the winery infringed the flautist’s copyright in her musical composition by continuing to produce and distribute labels that included the composition. The Court found that both the label that incorporated the twelve bar section and the label that included the four bar section were infringing.

The test for improper appropriation

In American copyright law, the concept of improper appropriation — that in addition to showing a unauthorized taking, a copyright owner must show that a defendant took too much of a work — isn’t explicitly incorporated into the Copyright Act. 17 U.S.C. 501(a) states that anyone who violates any of the exclusive rights of a copyright owner . . .  is an infringer . . .” Courts were left by Congress to formulate the standards for determining whether a particular use is potentially liable.

The concept that the appropriation of a small but qualitatively important portion of a preexisting work may constitute copyright infringement was incorporated into American law by Justice Story in his opinion in Folsom v. Marsh. 9 F.Cas. 349. No. 4901 (C.C.D. Mass. 1841) (Whether a use is infringing does “not necessarily depend on upon the quantity taken . . . “)

The standard for improper appropriation in Australian copyright law is partially set forth in Section 14(1) of the Copyright Act, which states that a person infringes a preexisting work when they use a “substantial part” of a “work or other subject-matter.”  The Court in Rutter interpreted the phrase “substantial part” as referring to a qualitative analysis instead of a quantitative analysis.   Citing Autodesk Inc v Dyason [No. 2] [1993] HCA 6; (1993) 176 CLR 300, 305 (Mason CJ):

It is clear that the phrase ‘substantial part’ refers to the quality of what is taken rather than the quantity … in determining whether the quality of what is taken makes it a ‘substantial part’ of the copyright work, it is important to inquire into the importance which the taken portion bears in relation to the work as a whole: is it an ‘essential’ or ‘material’ part of the work?

In Rutter, the Court found that both the twelve bar section of the flautist’s composition that was included on the original wine label, and the four bar section used on the revised label, were “immediately recognisable” excerpts that were “significant, essential and material part[s] of the composition.”

Statute of limitations

The Court applied a six year statute of limitations from the date of injury and limited the scope of the claim to infringement that occurred in the six years proceeding the filing of the complaint.  Section 134(1) of the Australian Copyright Act states that no infringement action may be “brought for infringement after the expiration of six years from the time when the infringement took place . . . ”

As a comparison, the United States Copyright Act 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.” 17 U.S.C. 507(b).  The Act doesn’t explicitly define when a claim accrues.  A majority of U.S. Courts have interpreted the limitations period as a discovery rule, beginning to run when a plaintiff either discovered or with due diligence should have discovered the injury; although, some courts have considered the limitations period as beginning to run on the point of injury, similarly to the limitations provision of the Australian Copyright Act.

Damages

Section 115(2) and of the Australian Copyright Act provides that a court may grant a plaintiff in an infringement suit an injunction and either damages or accounting of profits. The flautist in Rutter elected actual damages, in lieu of an accounting of profits, so the Court used the original license between the parties to calculate an average royalty per bottle of wine sold, and then multiplied the rate by the number of bottles sold by the winery that used the label in the last six years.

The Court also awarded additional damages.  Section 115(4) of the Australian Copyright Act gives a Court discretion to award additional damages in circumstances when infringement is (i) flagrant, or (ia) there is a need for deterrence of similar infringement, or (ib) a defendant doesn’t respond with appropriate conduct after it is informed of the infringement,or (iii) the defendant benefited from the infringement.

Section 115(4) to a certain extent makes damages under the Australian Copyright Act similar to actual damages in the American Copyright Act, with the exception that the American Copyright Act doesn’t allow a Court to access additional damages for willful infringement unless a plaintiff elects statutory damages.  17 U.S.C. 504 grants a plaintiff the choice to elect actual damages and additional profits of the infringer. The Australian Copyright Act forces a defendant to elect either actual damages or additional profits, but a Court can in its discretion award additional damages if a plaintiff benefits from the infringement.

Moral rights and false endorsement

The plaintiff also claimed damages should be accessed for the defendant’s violation of her moral right to attribution.  The Court found that violation of moral rights did not increase the flautists losses, and that since there is no “double counting” of damages for violation of moral rights, it had already accessed the appropriate additional damages.

The plaintiff also argued that it should receive additional copyright damages for the flautist’s personal association with the musical composition used on the label.  The Court found that there was no inference of personal endorsement raised merely by the use of the musical composition on the wine labels and that it wasn’t appropriate or necessary to add additional damages.  The decision in Harolds Stores, Inc. v. Dillard Dept. Stores, Inc., 82 F.3d 1533 (10th Cir. 1996) aside, most American courts have found that a plaintiff will not be awarded damages for loss of goodwill or consumer confusion for a copyright claim.  Loss of goodwill or consumer confusion is traditionally the province of a state law claim based on a right of publicity or a trademark claim, if and when the claims aren’t preempted, and is not an appropriate basis for awarding damages for a claim brought under the Copyright Act, which targets unauthorized infringement, not unauthorized endorsement.