Tag Archives: copyright litigation

SCOTUS Gives Guidance Regarding Attorney Fee Awards in Copyright Cases

by: Kelly A. Williams, a shareholder at Picadio Sneath Miller & Norton, P.C.

SupremeCourtImage_1On June 16, 2016, the U.S. Supreme Court issued an opinion on awarding attorneys’ fees in copyright cases for the first time in two decades and issued the first copyright case in two years. The case is Kirtsaeng v. John Wiley & Sons Inc., case number 15-375.  Section 505 of the Copyright Act provides that a district court “may  . . . award a reasonable attorney’s fee to the prevailing  party.”  The issue presented to the Supreme Court was whether a court, in exercising that authority, should give substantial weight to the objective reasonableness of the losing party’s position.  The court held that it should but that courts must also give due consideration to all other circumstances relevant to granting fees.  It further held that the district courts retain discretion, in light of those factors, to make an award of attorneys’ fees even when the losing party advanced a reasonable claim or defense.

Kirtsaeng, who was from Thailand, came to the U.S. to go to Cornell University.  While there, he discovered John Wiley & Sons, an academic publishing company, sold virtually identical, English language textbooks in the U.S. and Thailand, but sold them at a much cheaper price in Thailand.  He had family and friends in Thailand buy the books, ship them to him in the U.S. and sold them at a profit.

Wiley sued Kirtsaeng for copyright infringement, claiming Kirtsaeng’s sale of the books violated its exclusive right to distribute its textbooks.  Kirtsaeng invoked the “first sale doctrine” as a defense, which enables the lawful owner of a book (or other work) to resell or otherwise dispose of it as he or she wishes.  Wiley countered that the first sale doctrine did not apply to books manufactured abroad.  The circuit courts were split on the issue, and the issue went up to the Supreme Court.  The Supreme Court agreed with Kirtsaeng and held that the first sale doctrine does allow the resale of foreign made books.

Kirtsaeng went back to the district court and sought $2 million in attorneys’ fees as the prevailing party pursuant to section 505.  The District Court denied the motion, relying on Second Circuit precedent that gave “substantial weight” to the “objective reasonableness” of Wiley’s infringement claim.  The rational for that approach was that the imposition of a fee award against a copyright holder with an objectively reasonable—although unsuccessful—litigation position will generally not promote the purposes of the Copyright Act.  The District Court and the Second Circuit, on appeal, agreed that Wiley’s position was reasonable.  They also found that the other factors to be considered did not outweigh the reasonableness finding.   These non-exclusive factors were set forth in Fogerty v. Fantasy Inc., 510 U.S. 517 (1994).  In that case, the Supreme Court identified the non-exclusive factors as the frivolousness of the case, the loser’s motivation, the objective unreasonableness of their case, and considerations of compensation and deterrence, all of which are to be applied in a manner that’s faithful to the purposes of the Copyright Act.

In Kirstaeng, the Supreme Court explained that objective reasonableness can be only an important factor in assessing fee applications—not the controlling one.  District courts must take into account a range of considerations beyond the reasonableness of litigating positions.  Thus, a court may award fees even though the losing party offered reasonable arguments.  The Supreme Court cited as an example the situation where a court orders fee-shifting because of a party’s litigation misconduct, or the court decides to deter repeated instances of copyright infringement (i.e. copyright infringement “trolls”).  “Although objective reasonableness carries significant weight, courts must view all the circumstances of a case on their own terms, in light of the Copyright Act’s essential goals” (for instance—enriching the general public through access to creative works).

The Supreme Court concluded that the Kirstaeng matter should be remanded to the District Court because it appeared that the court had put too much emphasis on the “reasonableness” question.  Thus, the Supreme Court ordered the remand to ensure that the District Court evaluates the motion consistent with the analysis that it set forth—giving substantial weight to the reasonableness of Wiley’s litigating position, but also taking into account all other relevant factors.

Advertisements

Copyright Infringement Suit Over Hit Song Fails Due to Lack of Valid Copyright Registration

by: Kelly A. Williams, a shareholder at Picadio Sneath Miller & Norton, P.C.

Copyright SignRapper Rick Ross and his producers sued LMFAO members Skyler and Stefan Gordy in December 2013, claiming that “Party Rock Anthem,” which topped the Billboard charts for six weeks and sold more than 7.5 million copies in the U.S., infringed Rick Ross’s 2006 hit “Hustlin’.”  The court held that Rick Ross and his producers didn’t have the copyright registration necessary to sue for infringement.  The court determined that Ross and his producers never presented evidence showing they were the owners of “Hustlin’,” and the three different registrations for the song at the U.S. Copyright Office were all inaccurate.

Interestingly, the members of LMFAO didn’t dispute that they had Ross’ “every day I’m hustlin” lyrics in mind when they drafted their “every day I’m shuffling” lyric.  However, they raised several defenses including lack of standing and fair use.  They won on lack of standing.  If they had not, the court had previously ruled that it would leave the fair use issue for trial.  That issue was whether LMFAO transformed Ross’ lyric into something new.

Also of note was the Register of Copyrights’ finding that the misrepresentations on three registrations for Ross’s Hustlin’ song were strong enough that the Register would cancel all three.  The court also commented on this, finding that the misrepresentations were dramatic and unexplained especially because two of them were filed by major, global music corporations.  The court’s ruling did not cancel the registrations.  However, it did bar Ross from bringing the infringement action because it turned on whether there was a valid registration, and Ross and his producers didn’t have one.

The case is found at Roberts v. Gordy, case no. 1:13-cv-2470 in the U.S. Dist. Court for the S.D. Florida.

Monkeys Cannot Own Copyrights

by: Robert Wagner, intellectual property attorney at the Pittsburgh law firm of Picadio Sneath Miller & Norton, P.C. ()

l1aYeA little over a year ago, we discussed an interesting case where the owner of a camera that took a picture of a monkey could not register a copyright in the picture because the monkey was the one took a picture of itself. Well, that case reemerged last year when attorneys for PETA who “represent” the monkey filed a lawsuit in California arguing that the photographer violated the monkey’s copyright when he published pictures that the monkey took. (Naruto v. Slater, 3:15-cv-04324-WHO, C.D. Cal.) Last week, the Court granted the photographer’s motion to dismiss, holding that a monkey is not entitled to register a copyright with the Copyright Office or bring suit for copyright infrinement.

The monkey brought suit under Sections 106 and 501 of the Copyright Act (17 U.S.C. §§ 106 and 501), alleging that the publication of the photographs it took violated its copyrights in these photographs. The Court initially noted that there is no per se bar to an animal being a proper plaintiff in some limited circumstances, so it chose not to focus on that aspect of the case. Instead, the Court looked to the language of the Copyright Act, its legislative history, court opinions interpreting the Act, and the regulations of the Copyright Office. Taking all of these together, the Court found no indicating that Congress ever intended for animals to be able to hold copyrights or bring suit under the Act. In particular, the Court noted the Copyright Office has considered this very situation–whether a monkey can hold a copyright–and concluded that it cannot. See Compendium of U.S. Copyright Office Practices § 313.2 (December 2014).

So, for now at least, photographs taken by monkeys (and other animals) cannot be copyrighted by the animal.

“Happy Birthday to You” Song Copyright Stricken

by: Kelly A. Williams, a shareholder at Picadio Sneath Miller & Norton, P.C.

Good Morning to You Productions Corp. v. Warner Chappell Music, Case. No. 2:13-cv-04460, C.D. Cal. is about whether Warner/Chappell was properly asserting that it owned a copyright in the song “Happy Birthday to You.”

Birthday CakeThe case is a class action suit led by film production companies and a California musician who were working on a documentary about the song, “Happy Birthday to You.”  Warner/Chappell claimed to have a copyright on the song and demanded that Plaintiffs pay a $1,500 licensing fee to use the song.  The court goes through a large amount of historical evidence presented by both sides on cross motions for summary judgment.  After reviewing the evidence, the court found that Warner/Chappell did not own a valid copyright in the “Happy Birthday” lyrics and that the music for the song had entered the public domain years ago.  The origin of Warner/Chappell’s claim that it owned the copyright went back to a previous company which had acquired a song from two sisters that had the same music but different words, titled “Good Morning to All.”  The court could not find any reference to the “Happy Birthday” words in the agreement between the sisters and the purchasing company, Summy Co. (Defendants were successors-in-interest to Summy Co.).  Thus, the court ruled in favor of Plaintiffs.  Plaintiffs are seeking to have Warner/Chappell return the millions of dollars they collected over the years.  Also, we are all now free to sing “Happy Birthday to You” without fear of having to pay $1,500 (unless the case gets reversed on any appeal).

2d Circuit Punts on Copyright Registration Question Again

by: Robert Wagner, intellectual property attorney at the Pittsburgh law firm of Picadio Sneath Miller & Norton, P.C. ()

Think!An interesting copyright question continues to percolate in the Circuit Courts over what “registration” means as a prerequisite for filing a copyright claim in federal court. The Second Circuit, in The A Star Group, Inc. v. Manitoba Hydro, (No. 14-2738) noted the Circuit split on the issue but declined again to weigh in.

Under 17 U.S.C. § 411(a), a copyright holder must register its work before it can initiate a lawsuit against an infringer:

no civil action for infringement of the copyright in any United States work shall be instituted until preregistration or registration of the copyright claim has been made in accordance with this title.

The question is what is sufficient to satisfy the “registration” requirement–is the filing of the application sufficient, or does the application need to be accepted and granted by the Copyright Office?

Currently, the Circuit Courts on split on the issue. The Fifth and Ninth Circuits require only that the copyright holder file the application. See, e.g., Apple Barrel Prods., Inc. v. Beard, 730 F.2d 384, 386-87 (5th Cir. 1984); Cosmetic Ideas Inc. v. IAC/InteractiveCorp,  606 F. 3d 612, (9th Cir. 2010). While the Tenth and Eleventh Circuits require that the Copyright Office grant the application. See, e.g., M.G.B. Homes, Inc. v. Ameron Homes, Inc., 903 F.2d 1486, 1488-89 (11th Cir. 1990) ;  La Resolana Architects, PA v. Clay Realtors Angel Fire, 416 F.3d 1195, 1202-05 (10th Cir. 2005). The Seventh Circuit appears to have taken conflicting views on this matter. Compare Chicago Bd. of Educ. v. Substance Inc., 354 F.3d 624, 631 (7th Cir. 2003) with Gaiman v. McFarlane, 360 F.3d 644, 655 (7th Cir. 2004).

The Second Circuit chose not to wade into this issue and was able to decide the case without having to choose a side. At some point, however, the U.S. Supreme Court will likely need to resolve this dispute as the Circuit split continues. As it stands now, a copyright holder can face very different results depending on where the case is filed, which is not a helpful situation when a national right, such as a copyright, is involved.

Court Holds That IP Address Evidence Is Not Sufficient to Allege Claim for Copyright Infringement

Guest post by Cara Disheroon, attorney at Picadio Sneath Miller & Norton, P.C. ()

Cara L DisheroonIn Elf-Man LLC v. Cariveau, No. C13-0507RSL, 2014 U.S. Dist. LEXIS (W.D. Wash., Jan.17, 2014), the U.S. District Court for the Western District of Washington found that a production company’s complaint alleging copyright infringement for the internet downloading of its film, “Elf-Man,” did not state a “plausible” ground for relief when the company’s only evidence of infringement was the use of defendants’ IP addresses.

The production company initially filed an action against 152 Doe defendants for allegedly downloading the film using the BitTorrent application, which identified defendants through their IP address.  Following a dismissal of the Doe defendants in the original complaint, plaintiff filed a First Amended Complaint naming eighteen individual defendants.  Four of these defendants filed a motion to dismiss arguing that the complaint failed to state a claim that was “plausible” under the Federal Rules.

The court agreed stating that plaintiff provided no factual allegations that supported claims that defendants directly or indirectly stole copyrighted material.  Noting that plaintiff alleged only that the defendants purchased internet access and failed to ensure that others did not use that access to download copyrighted material, the Court addressed the claims of direct, contributory, and indirect infringement in turn.   Regarding the direct and indirect infringement allegations, the court reasoned that the mere identification of defendants’ IP address “tells us very little about who actually downloaded Elf-Man using that IP address.”  Citing various other possibilities, including another family member, guest, or freeloader who could have engaged in the infringing activity, the Court found that plaintiff alleged facts that were merely possible.  In the eyes of the court, it was also possible that defendants simply failed to secure their connection against third-party interlopers.  The conclusory allegations of the complaint therefore failed to give rise to a plausible inference.

Regarding the indirect infringement claim, the Court again found that plaintiff’s complaint was conclusory and failed to provide facts that would support a finding that defendants intentionally encouraged or promoted the infringement.  Plaintiff argued that defendants should be held liable for contributory infringement “because they failed to take affirmative steps to prevent unauthorized use of their internet access….” The Court, while agreeing with plaintiff that courts continue to analyze contributory liability claims and that not all issues had been litigated, held that courts have fixed the requirement that defendant’s contribution to the infringement be intentional.  Absent this essential element of the claim, defendants’ motion to dismiss was granted.

The decision arguably adds to the already difficult burden of copyright holders to protect their works from online infringement but also demonstrates the balancing act of courts which require proof that a particular individual behind the IP address actually pirated the copyrighted work.

Sharing a Publication at Work May Constitute Copyright Infringement

by: Kelly A. Williams, a shareholder at Picadio Sneath Miller & Norton, P.C.

wd-pa-courthouseDo you work in an office that receives a single copy of a trade publication, which is passed around the office for multiple people to read?  Be careful because such use may constitute copyright infringement—at least that is what one publisher argues.

In Energy Intelligence Group, Inc. v. The United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO/CLC (“USW”), Civ. Action. No. 11-00428, 2013 U.S. Dist. LEXIS 123080 (W.D. Pa. Aug. 29, 2013) (Judge Conti), Energy Intelligence Group, Inc. and Energy Intelligence Group (UK) Limited (collectively “EIG”) filed suit to seek damages from Defendant USW for sharing its single subscription to the “Oil Daily” with multiple USW employees.  USW, located in Pittsburgh, Pennsylvania, is a labor organization, which provides collective bargaining services to its union members.  USW subscribed to the Oil Daily, beginning in 1992.  From 1992 to 1999, the Oil Daily was sent in paper copy.  Starting in 1999, EIG began sending the Oil Daily in electronic form.  USW subscribed to the Oil Daily through a subscription agent, EBSCO Information Services (“EBSCO”).

EIG’s suit involves 2,880 issues of the Oil Daily, which were published from December 1999 to March 2011.  EIG owns valid U.S. copyright registrations for each of these publications and provides copyright notices on its website, articles, emails and publications, including on the Oil Daily itself.  In February 2006, EIG sent a letter to all subscribers informing them that single-user subscriptions were not to be shared by multiple readers.  This letter was not sent directly to USW but was sent to EBSCO.  However, the court determined that EBSCO was USW’s agent and this constituted notice to USW, as well as EBSCO.

Mary Dimoff, USW’s librarian, was the sole subscriber to the Oil Daily.  When she received the Oil Daily in hard copy, she maintained a list of USW recipients to receive the Oil Daily, and she routed the paper to these individuals over the course of three to four days.  When Ms. Dimoff started receiving the Oil Daily in electronic form, she forwarded it to the recipients via email.  Through various communications with EIG and EBSCO, Ms. Dimoff revealed to EIG that she was sharing her subscription, and EIG filed suit.

USW conceded that it copied and distributed the 2,880 issues of the Oil Daily.  However, USW asserted that it was permitted to do so based upon several different defenses including, implied license, equitable estoppel, fair use, and laches.  USW also argued that damages should be limited to the three-year period prior to the filing of the complaint.  The parties filed cross motions for summary judgment on the defenses and the damages issues.

The court held that factual issues precluded the entry of summary judgment on all but one issue which was the equitable estoppel defense.  The court concluded that it would be impossible for USW to prove that the equitable estoppel defense applied because it could not prove all four factors necessary to establish such a defense: (1) the plaintiff had actual or constructive knowledge of the defendant’s infringing conduct; (2) the plaintiff intended or expected that defendants would act on the plaintiff’s misrepresentations or concealments; (3) the defendant was ignorant of the true facts; and (4) the defendant relied on the plaintiff’s conduct to its injury.

The court found that USW had sufficient evidence to prove that EIG had at least constructive knowledge of the infringing conduct for approximately three years before filing suit and thus, met the first factor.  However, USW could not prove the last three factors.  As for the second factor, the court determined that EIG did not misrepresent or conceal its intent to assert its copyrights because it affixed its copyright notice on every edition of the Oil Daily.  With respect to the third factor, the court rejected USW’s argument that it acted innocently because it had the notice of the copyright on the Oil Daily and because USW never followed up with EBSCO or with EIG to confirm if its actions were permissible.  Finally, the court held that USW could not show that it relied on EIG’s conduct to its detriment because EIG provided the copyright notice directly on the Oil Daily and sent its terms and conditions to EBSCO.  Therefore, EIG made no misrepresentations and did not conceal its copyrights.

The Energy Intelligence Group case is an interesting copyright case.  For more details on the other defenses and the factual issues raised, you can read the entire case here.

Preliminary Ruling Okaying Use of Copyrighted Articles During Patent Prosecution as Fair Use

by: Robert Wagner, intellectual property attorney at Picadio Sneath Miller & Norton, P.C. ()

Magistrate Judge Jeffrey J. Keyes from the U.S. District Court for the District of Minnesota issued an important report and recommendation affirming the ability of patent attorneys to use copyrighted articles during patent prosecution (e.g., to submit them to the USPTO to fulfill disclosure requirements) as fair use.

BACKGROUND

In American Institute of Physics, et al. v. Schwegman Lundberg & Woessner, P.A.  (No. 12-cv-00528), various publishers sued a law firm that had copied their copyrighted scientific articles in order to assess whether the articles were prior art and, if they were, sent copies to the USPTO to fulfill its obligation to disclose prior art. The publishers originally argued that any use by the law firm of these articles without payment constituted copyright infringement. However, they dropped their claims as to the firm’s (1) making copies to be sent to the USPTO, (2) sending copies to the USPTO, and (3) retaining one copy for its files. They continued their infringement claims as to the downloading of the articles, making other copies that existed in the firm’s files, and distributing the copies to its clients or others in the firm. The law firm argued that none of these actions infringed because of the fair use exception.

THE COURT’S DECISION

In assessing the applicability of the fair use defense, a court must consider (1) the purpose and character of the accused infringer’s use, (2) the nature of the copyrighted work, (3) the amount of used, and (4) the effect of the copying on the relevant market.

The Court determined that the nature and purpose of the firm’s use was different from that of the publishers. The publishers publish the works for the betterment of science and to allow other scientists to test and validate the authors’ findings. In contrast, the firm used the articles to satisfy a legal requirement of disclosure to assist the USPTO in determining whether an invention was new and novel. The Court further found that the intended audience for the two parties was different and did not overlap. The publishers’ audience was scientists, students, libraries, etc., whereas the firm’s audience was the USPTO and lawyers in the firm.

The Court also considered the nature of the articles to slightly favor the law firm. Because the articles were primarily factual and informational in nature, they fell a bit further from the creative types of expression more strongly protected by copyright law.

The Court looked at the amount of use and also concluded that, despite the copying of the entire article, this factor also favored the law firm. In order to satisfy its obligation of disclosure, the firm had to use the entire article. Thus, its entire use was consistent with its allowed purpose.

Finally, the Court looked to whether there were any other factors that might favor either party. It concluded that the law firm’s use was consistent with the overriding Constitutional basis for both the patent and copyright laws, which is to promote the progress of the science and useful arts. Such copying ultimately furthered this objective and the public good by assisting the USPTO in weeding out improper patents.

Ultimately, in weighing all of the factors, the Court concluded that the law firm’s use of the copyrighted articles was fair use and not copyright infringement.

 

Ninth Circuit Confirms Righthaven LLC Lacked Standing to Bring Copyright Infringement Claims

by: Robert Wagner, intellectual property attorney at Picadio Sneath Miller & Norton, P.C. ()

Copyright SignIn what appears to be the conclusion to the saga that was the Righthaven LLC copyright troll experiment (see past posts here), the Ninth Circuit affirmed the District Court’s determination that Righthaven lacked standing to sue for copyright infringement in Righthaven LLC v. Hoehn, No. 11-16751. As the Ninth Circuit confirmed, a plaintiff must have more than a bare right to sue in order to have standing.

As we discussed two years ago, Righthaven LLC was set up to acquire copyrights from various entities and then sue alleged infringers who used any or all of the copyrighted works. In particular, Righthaven purported to obtain assignments from the Las Vegas Review-Journal. However, these assignments were nothing more than a bare right to sue with restrictions. Righthaven obtained no right to exploit the copyrights or obtain any royalties. Instead, the paper retained essentially every meaningful right associated with the copyright, including an exclusive license, the right to veto any potential copyright litigation, the right to receive proceeds from any litigation, and the right to revert ownership back to itself should it choose.

Nonetheless, Righthaven proceeded to sue hundreds of individuals who used some or all of these copyrighted works. Eventually, as the result of discovery and inquiries by the Court, the true nature of Righthaven’s rights became apparent. At that point, the District Court determined that Righthaven was not, in fact, the true owner of the copyright and dismissed Righthaven’s copyright claims. Righthaven appealed this determination to the Ninth Circuit, which affirmed.

Under the Copyright Act, only the “legal or beneficial owner of an exclusive right under a copyright” has standing to sue for infringement. 17 U.S.C. § 501(b). An assignment of a bare right to sue is not sufficient to confer standing. To determine whether a party has sufficient exclusive rights, courts are to look at the substance and effect of any contract purporting to assign ownership, rather than the words or labels given by the parties.

In this case, the Ninth Circuit found that Righthaven held none of the exclusive rights typically associated with a copyright owner. Instead, it only had a bare right to sue, which was insufficient to confer standing.

With this finding, it appears that the Righthaven experiment in copyright trolling is over. It will be interesting to see if others take up the mantle or whether this was a fleeting experiment.

Patent Prosecution Law Firms Beware . . .

By: Joe Carnicella, intellectual property attorney with Picadio Sneath Miller & Norton, P.C.

On April 15, Thomson Reuters published a very interesting article that should be read by attorneys who represent clients in preparing and filing patent applications.  The article can be found here.  The article reports that at least three cases have been filed by publishers and copyright holders of scientific, technology and medical journals (American Institute of Physics and John Wiley & Sons Ltd.) against law firms for using copyrighted materials as part of the patent application process.  The law firms have been accused of “wrongly using copyrighted works to promote their business interests.”  In particular, the article reports that the plaintiffs are not complaining about copies being submitted to the USPTO, but rather, they are objecting to the fact that law firms made and kept additional copies of the copyrighted materials.  The law firms have responded by arguing that, inter alia, copies made during the course of the representation constitute fair use.  We will continue to monitor these cases.