2014 copyright update...copyright infringement plaintiff satisfied section 411(a)’s registration...

2014 COPYRIGHT UPDATE

12th Annual Rocky Mountain Intellectual Property & Technology Institute

Jesús M. Vázquez

May 29, 2014

Outline of Presentation

• Introduction • Copyright Legislation Update • Significant Copyright Cases • Copyright Reform • Questions & Concluding Remarks

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Introduction • Several bills under consideration in the 113th

Congress would have a significant impact on copyright law.

• Some bills would repeal or leverage certain compulsory copyright license fees or modify laws related to public performance rights and anticircumvention of technological access controls on consumer devices.

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Introduction (cont.)

• If signed into law, these bills would have significant implications on content right stakeholders, performing artists, and the entertainment industry.

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Copyright Legislation Update

– Next Generation Television Marketplace Act (H.R. 3720)

– Television Consumer Freedom Act of 2013 (S. 912)

– Unlocking Technology Act of 2013 (H.R. 1892)

– Free Market Royalty Act (H.R. 3219)

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Next Generation Television Marketplace Act (H.R. 3720)

• Bill focuses on changing the compulsory license fees that the Copyright Act requires for distribution of content in TV and broadcasting industries.

• Introduced to repeal compulsory license fees for some transmissions of TV programming by satellite carriers and to eliminate certain remedy categories.

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Television Consumer Freedom Act (S. 912)

• Would increase control by consumers over their cable or satellite services.

• Major TV distributors (CBS, News Corp.) incentivized to allow customers to purchase channels “a la carte.”

• Distributors of only bundled channels would not be allowed to pay the compulsory license fee – instead negotiate with individual rights holders to distribute content.

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Unlocking Technology Act of 2013 (H.R. 1892)

• Section 1201 of DMCA prohibited consumers from unlocking/bypassing technical access controls on software or hardware devices in order to protect the underlying work from infringement.

• Library of Congress exempted wireless mobile devices from the provisions in 2006 and 2010 to allow consumers to reprogram their devices to change their service providers.

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Unlocking Technology Act of 2013 (H.R. 1892)(cont.)

• In January 2013 the exemption expired – cell phone unlocking illegal again under Section 1201 of the DMCA.

• Public outcry led to various bills introduced in Congress to allow consumers to unlock their cell phones.

• The Unlocking Technology Act would amend Section 1201 of the DMCA.

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Unlocking Technology Act of 2013 (H.R. 1892)(cont.)

• Consumers could legally unlock the technical access controls on their personally owned devices as long as they do not infringe the underlying work once they have access to it.

• Also legal to unlock for maintenance and repair.

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Free Market Royalty Act (H.R. 3219)

• The FMRA would amend the U.S. Copyright Act to allow a right of public performance for any audio transmission of a sound recording.

• Performing artists would have the right to collect royalties when their songs are broadcast over radio or comparable online music services (Sirius XM; Pandora).

• Compulsory license fees for digital audio transmissions would be eliminated.

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Free Market Royalty Act (H.R. 3219)(cont.)

• In lieu of compulsory license fees, owners of the copyrights can directly negotiate the license terms to allow their recordings to be aired.

• Copyright owners can opt to have the terms negotiated on their behalf by SoftExchange, Inc., non-profit performing rights organization that collects royalties on behalf of sound recording copyright owners.

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Significant Copyright Cases

• Oracle America, Inc. v. Google Inc., --- F.3d --

- (Fed. Cir. May 9, 2014), 2014 WL 1855277 – Oracle’s Java Source Code is Copyrightable

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Oracle America, Inc. v. Google Inc. (cont.)

• On May 9 the Federal Circuit reversed a ruling that Oracle’s Java software cannot be copyrighted and reinstated a jury verdict that Google’s Android operating system infringes. The court allowed Google to argue on remand that it is protected by fair use.

• At issue is the software code for Java’s application programming interfaces (APIs), which are preset packages of Java code created so that programmers can use functions that are repeated often without having to rewrite them every time.

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Oracle America, Inc. v. Google Inc. (cont.)

• The court noted that programs that serve a function are not “automatically” beyond the scope of copyright law, and stressed that an original work – even one that serves a function – qualifies for copyright protection if the author had multiple ways to express the underlying idea.

• Google had other ways it could have created programming shortcuts, but it chose to copy the unique way that Java did it.

• The trial jury was split on the fair use question, which will be addressed again on remand.

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Significant Copyright Cases (cont.) • Psihoyos v. John Wiley & Sons, Inc., --- F.3d --

- (2nd Cir. April 4, 2014), 2014 WL 1327937, 2014 Copr.L.Dec. P 30, 589, 110 U.S.P.Q.2d 1325 – Discovery Rule Applies to Copyright Statute

of Limitations in Second Circuit

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Psihoyos v. John Wiley & Sons, Inc. (cont.)

• U.S. Court of Appeals for the Second Circuit ruled April 4, 2014, that the clock starts ticking for three-year statute of limitations under the Copyright Act when the copyright holder discovers that an infringement has occurred and not when the injury first began.

• Photographer sued textbook publisher for copyright infringement – case is one of several recently filed by photographers against educational publishers in which publishers argue claims accrue when infringement starts and are barred by SOL or by photographers failure to register.

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Psihoyos v. John Wiley & Sons, Inc. (cont.)

• Court declined to adopt either the “application rule” or the “registration rule” to determine whether copyright infringement plaintiff satisfied Section 411(a)’s registration requirement.

• “Claims do not accrue until actual or constructive discovery of the relevant infringement.”

• “We agree with our sister Circuits that the text and structure of the Copyright Act … evince Congress’ intent to employ the discovery rule, not the injury rule.”

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Significant Copyright Cases (cont.) • Garcia v. Google, Inc., 743 F.3d 1258 (9th Cir.

Feb. 26, 2014), 2014 Copr.L.Dec. P 30, 570, 109 U.S.P.Q.2d 1799 – Actors Have Independent Copyrights in Their

Own Performances

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Garcia v. Google, Inc. (cont.)

• On February 26 the U.S. Court of Appeals for the Ninth Circuit granted an actress’s request for a preliminary injunction that required Google – which owns YouTube – to take down a film in which she appeared. The film was an anti-Islamic film that led to death threats against the actress.

• The court’s recognition of an independent copyright interest that is separate from the copyrights in the film itself has important implications for creators and providers of content.

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Garcia v. Google, Inc. (cont.)

• Individual performers, actors and actresses, may now be able to control the use of their own performances in collaborative works, and use of the collaborative works themselves.

• Ms. Garcia was paid $500 for three and a half days of filming what she was told would be an adventure film.

• Her performance was later altered and her words were overdubbed and then used in the film which was broadcast on YouTube.

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Garcia v. Google, Inc. (cont.)

• The film spurred protests and death threats, and Garcia asked Google to take down the film pursuant to the take down provisions of the DMCA, but Google refused.

• The district court denied Garcia’s motion for preliminary injunction, but on appeal the Ninth Circuit reasoned that Garcia’s performance had the requisite minimal creativity to be copyrightable, that her performance was not a work for hire, and that she did not grant the film makers an implied license to use her performance in the film.

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Garcia v. Google, Inc. (cont.)

• The decision could have extreme implications for the entertainment industry and media. Ostensibly all films and TV shows would consist of work owned by numerous copyright owners. Films would have numerous competing copyright interests.

• By analogy, an individual musician could seek to protect his or her performance in a musical work, and an individual builder could seek to protect his contribution to an architectural work.

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Garcia v. Google, Inc. (cont.)

• Content creators should enter into written contracts with all creative performers regardless of the role or creative contribution. Contracts should make clear that the performer’s work is a work made for hire and is otherwise expressly assigned.

• Contracts should give the content owners the right to use the performance for any and all purposes, including derivative works.

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Significant Copyright Cases (cont.)

• Peter Mayer Publishers Inc. v. Shilovskaya, --- F.Supp.2d --- (S.D.N.Y. March 31, 2014), 2014 WL 1325744 – Conversion of print publication to eBook

does not result in derivative work

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Peter Mayer Publishers Inc. v. Shilovskaya (cont.)

• Publishing company with copyright to English translation of Russian novel filed suit against author’s descendants who held restored copyright interest in the novel under Uruguay Round Agreements Act (URAA).

• Court held that proposed ebook version of translation would not result in a new “derivative work” under Copyright Act and would not infringe any copyright interest held by descendants of author.

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Peter Mayer Publishers Inc. v. Shilovskaya (cont.)

• Section 514 of the URAA was adopted to bring U.S. law into compliance with Berne Convention, which requires recognition of the copyrights of foreign copyright holders.

• Section 514 restores copyright to foreign copyright holders whose works have not entered the public domain via expiration of the copyright’s term in its country of origin, but that have entered the public domain in the U.S.

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Peter Mayer Publishers Inc. v. Shilovskaya (cont.)

• Publisher argued that ebook was a mere copy of the translation and thus could be published under reasonable royalty arrangement in place between the descendants and the publisher.

• Descendants argued ebook version of the translation would be an “entirely different medium of expression” and could not be published without their permission.

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Peter Mayer Publishers Inc. v. Shilovskaya (cont.)

• Court agreed with publisher after consulting definition of derivative work in Copyright Act:

“a work based upon one or more preexisting works, such as a translation, musical arrangement, dramatization, . . . or any other form in which a work may be recast, transformed or adapted. A work consisting of editorial revisions, annotations, elaborations, or other modifications, which, as a whole, represent an original work of authorship, is a “derivative work.””

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Peter Mayer Publishers Inc. v. Shilovskaya (cont.)

• “The proposed ebook will not reflect the content-based changes referenced in the first sentence of the statutory definition of “derivative work.””

• “Moreover, the proposed ebook does not satisfy the originality element of the statutory definition.

• Publisher’s MSJ was thus granted.

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Significant Copyright Cases (cont.) • Authors Guild, Inc. v. Google Inc., 2013 WL

6017130 (S.D.N.Y. Nov. 14, 2013) – Google’s copying, use, distribution and display

of “snippets” from books copied in their entirety is fair use and does not infringe authors’ copyrights

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Authors Guild, Inc. v. Google Inc. (cont.)

• Search engines present a range of complex copyright issues, particularly in the context of fair use.

• The Google Books litigation hit a milestone in late 2013 when the district court found Google’s acts to be a protected fair use.

• Beginning in 2004 Google partnered with libraries to scan over 20 million books, many of which were still under copyright.

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Authors Guild, Inc. v. Google Inc. (cont.)

• Google uses the scans to allow users to search the contents of the works. If Google had permission or the works are in the public domain, users can see the full text of the book.

• If a book is still under copyright and the author has not authorized displaying the full text, Google returns only “snippets” of texts with the user’s search terms, and implements measures to prevent users from a full copy of the book.

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Authors Guild, Inc. v. Google Inc. (cont.)

• Authors Guild and individual authors filed a class-action lawsuit for copyright infringement in 2005. After years of unsuccessful attempts to settle, the class was certified in 2012.

• On interlocutory appeal, the Second Circuit vacated the certification and directed the district court to consider Google’s fair use defense.

• The court concluded that the four statutory factors weighed in favor of a finding of fair use.

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Authors Guild, Inc. v. Google Inc. (cont.)

• Notably, the court found Google’s use of the works to be highly transformative.

• The court also noted the “significant public benefits” of Google’s service, in that it preserved old and out of print books, and thus “all society benefits” from the service.

• Authors Guild indicated that it plans to appeal the Google Books decision.

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Significant Copyright Cases (cont.) • Asher Worldwide Enterprises LLC v.

Housewaresonly.com Inc., WL 4516415 (N.D.Ill. Aug. 26, 2013), 108 U.S.P.Q.2d 1493 – Website operators can be held personally liable for website’s infringement

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Asher Worldwide Enterprises LLC v. Housewaresonly.com Inc. (cont.)

• Asher/Plaintiff sells discounted commercial kitchen equipment through www.reliabuy.com website.

• Items sold on the Reliabuy.com website include product descriptions created by Asher employees or third parties.

• Asher applied for copyright registrations for the product descriptions.

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Asher Worldwide Enterprises LLC v. Housewaresonly.com Inc. (cont.)

• Individual defendants Marcia and Stuart Rubin owned and operated www.housewaresonly.com and www.restaurantkitchenwarehouse.com websites.

• Defendant websites sell discount kitchen equipment and compete directly with Reliabuy.com

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Asher Worldwide Enterprises LLC v. Housewaresonly.com Inc. (cont.)

• 100 of the copyrighted product descriptions posted to Reliabuy.com by Asher appeared on Housewaresonly.com between October 2009 and August 2010.

• In September 2010, individual defendants redesigned Reliabuy.com to feature sales of discounted commercial kitchen equipment.

• Rubins also launched second website, RestaurantKitchenWarehouse.com, which also focused on discounted commercial kitchen equipment.

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Asher Worldwide Enterprises LLC v. Housewaresonly.com Inc. (cont.)

• New website had more than 200 of Asher’s copyrighted descriptions.

• Asher filed suit in 2011 against two defendant websites asserting federal claims of copyright and trademark infringement.

• Asher subsequently filed and served amended complaint adding Rubins individually – Rubins moved to dismiss arguing they could not be held personally liable for websites’ infringement.

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Asher Worldwide Enterprises LLC v. Housewaresonly.com Inc. (cont.)

• The court noted that “for personal liability for corporate intellectual property infringement to extend to corporate officers, a special showing must be made that they acted willfully and knowingly and personally participated in the infringing activities or used the corporation to carry out their own deliberate infringement.”

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Asher Worldwide Enterprises LLC v. Housewaresonly.com Inc. (cont.)

• Because the Rubins comprised the entire workforce of the websites, there was a “reasonable inference they were personally involved in the corporation’s infringements” and Rubins’ attempts to shutter the websites and avoid service “leads to the inference that the Rubins knowingly and willfully participated in the infringements”

• Motion to dismiss was thus denied.

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Copyright Reform

• March 4, 2013 – Register of Copyrights of the United States and Director of the U.S. Copyright Office Maria A. Pallante delivers “The Next Great Copyright Act” speech at Columbia University.

• Pallante said orphan works, public performance rights for sound recordings, exclusive rights, incidental copies, DMCA, digital first sale and licensing were issues in need of review.

• March 20, 2013 – Pallante testifies before Congress and urges comprehensive copyright reform.

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Copyright Reform (contd.)

• April 24, 2013 – Representative Robert Goodlatte (R-Va.) announces that House Judiciary Committee would undertake in-depth review of U.S. copyright laws.

• July 31, 2013 – U.S. Department of Commerce publishes green paper on updating copyright policies for the internet age: Copyright Policy, Creativity, and Innovation in the Digital Economy.

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Copyright Reform (contd.) • Green Paper proposed that music licensing reform was

necessary to “spur rather than impede the development of new business models for the enjoyment of music online.”

• Green Paper calls for “maintaining an appropriate balance” regarding rights and exceptions to copyright law, with a focus on public performances, at issue in various cases including the Aereo case.

• Paper also addresses “keeping rights meaningful in the online environment” in the context of enforcement and differentiating abuses by individual file sharers and secondary liability for large-scale online infringement.

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Copyright Reform (contd.)

• Green Paper also addresses “moving licensing online” in the context of the opportunities provided by having online mechanisms to assist in licensing and recordation and the difficulties of building and developing online business models under the existing schemes.

• Recording Industry Association of America (RIAA) submitted lengthy comments, including defending statutory damages as a necessary deterrence to infringement.

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Copyright Reform (contd.)

• September 2013 – Copyright Office issues report recommending creation of a small-claims copyright tribunal as a voluntary alternative to Federal court for infringement cases with damages valued at no more than $30,000.

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Copyright Reform (contd.)

• December 2013 – U.S. Patent and Trademark Office holds public meeting on Department of Commerce Internet Policy Taskforce’s green paper Copyright Policy, Creativity, and Innovation in the Digital Economy published in July 2013.

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Questions?

Jesús M. Vázquez, Esq. Lewis Roca Rothgerber LLP

jvazquez@lrrlaw.com 303-628-9517

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