Last week the U.S. Court of Appeals for the Federal Circuit reversed the U.S. District Court for the Northern District of California’s ruling of fair use in Oracle America, Inc. v. Google LLC, and held that a verbatim and non-transformative taking in the presence of an actual or potential licensing market fatally undermined the defense. Oracle had sued Google for copyright infringement, alleging that Google had unlawfully used 37 packages of Oracle’s Java application programming interface – “pre-written Java source code programs” that serve as shortcuts for various computer functions to save programming time – in its Android-powered devices. Google copied verbatim 11,500 lines of Oracle’s copyrighted computer code as well as the structure, sequence, and organizing of the packages. After a second jury trial on fair use, Google prevailed on its fair use defense, and Oracle appealed after the district court rejected its post-trial motion for judgment as a matter of law. Continue reading
Cryptocurrencies and blockchain technology are no longer relegated to the most esoteric corners of the Internet. While these important technological and social innovations were once widely unknown, or considered the purview of the dark web, they have now reached the mainstream. Federal and state governments, as well as major corporations, are taking notice. Here are a few recent noteworthy developments:
U.S. District Court for the Eastern District of New York ruled on March 6, 2018 that virtual currencies are commodities regulated under the Commodities Exchange Act (CEA). In this important decision, the court held that the Commodity Futures Trading Commission had standing to sue under the CEA to protect investors against fraud and manipulation in virtual currency markets. This allowed the CFTC to bring claims against Coin Drop Markets alleging that this defendant “offered fraudulent trading and investment services related to virtual currency.” Rulings like this challenge the common assumption that cryptocurrencies are unregulated, and may signal the shrinking of the crypto “wild west” frontier. Continue reading
While brand owners often benefit from the endorsement of online and social media “influencers,” such endorsements must not mislead consumers as to the relationship between the brand and individual endorsing the brand’s products or services. To ensure that “material connections” between brands and influencers are clearly and fully disclosed, the FTC has put forth guidelines designed to assist brand owners with meeting this requirement. Under the guidelines, brands are subject to liability for failing to disclose material connections between themselves and those individuals who promote or endorse the brand. To the extent an advertiser contravenes these guidelines, however, no private right of action exists; instead, it is up to the FTC to take action. A recent decision by the U.S. District Court for the Southern District of New York has added a further limitation, holding that a violation of the FTC guidelines cannot support a claim for false advertising under either federal or California state law. Continue reading
On Monday a California appeals court handed down a decision in the closely watched case of de Havilland v. FX Networks, LLC et al., triggering a collective sigh of relief from studios, networks, and other content producers. The court’s decision reaffirms two widely recognized principles: (1) that the First Amendment’s protection of creative works is not limited by the mere fact that a work generates income, and (2) that an individual cannot censor the way in which she is depicted in a creative work merely because she does not like that depiction.
These principles, as applied to the entertainment industry, have been challenged in recent years with a wave of cases such as de Havilland. For instance, a case in New York, Porco v. Lifetime Entertainment Services, LLC, was allowed to proceed after an appellate court held that the newsworthiness exception to New York’s statutory right of publicity did not apply to a docudrama that substantially fictionalized the life story of a real person. The court stated that such a work was “mainly a product of the imagination” and thus “nothing more than [an] attempt to trade on the persona of the plaintiff.” Continue reading
MoviePass, the subscription movie ticket and streaming service, has grown its user base exponentially in recent months, but it may become a victim of its own success. The $7.95 per month service, which supplies its users with an unlimited number of monthly movie theater tickets and access to streaming content, has over two million users and counting. Purchasing multiple movie theater tickets for these two million users every month, however, generates a significant operating loss. MoviePass hopes to reverse its fortunes through a combination of monetizing the information its users provide, partnerships with movie studios (including acting as a distributor) and theater chains, as well as a gradual process by which its users stop “binging” the service and become more passive consumers. Continue reading
A panel of the U.S. Court of Appeals for the Second Circuit today issued its much-anticipated opinion in the TVEyes appeal, reversing the decision of the U.S. District Court for the Southern District of New York, and holding that TVEyes’ copying, storage, and re-distribution for viewing, downloading, and sharing, of massive amounts of copyrighted TV content was not fair use.
TVEyes is a for-profit media company offering a service that allows its clients to “sort through vast quantities of television content in order to find clips that discuss items of interest to them.” TVEyes records 1,400 channels’ worth of TV broadcasts, 24 hours a day, and makes the copied content searchable by also copying the closed-captioned text that accompanies the videos. Clients can search for videos based on keywords and play unlimited video clips, each up to ten minutes in duration, and may archive, download, and share clips by e-mail. Clients pay $500 per month for these services. Continue reading
Last week, Judge Forrest of the U.S. District Court for the Southern District of New York in Goldman v. Breitbart News, LLC – one of a pair of cases pending in Manhattan federal court concerning the practice of “embedding” copyrighted content – issued a ruling in favor of the plaintiff, photographer Justin Goldman, holding that embedding (or framing) does not immunize content users from copyright infringement claims. The court declined to adopt the Ninth Circuit’s “server test” as set forth in Amazon v. Perfect 10, holding that the location of the allegedly infringed work does not determine whether a defendant has “publicly displayed’ that work in violation of the copyright owner’s exclusive rights. Put another way, “the fact that the image was hosted on a server owned and operated by an unrelated third party . . . does not shield” defendants from a finding that a plaintiff’s display right had been violated.
The court chiefly relied on the language of the Copyright Act, including § 101’s definition of “display,” which includes showing a copy of a work by any “device or process,” and transmitting or communicating a display by means of any “device or process.” The court explained that the Copyright Act does not require a user to possess, or to store at their own physical location, a copy of the work in order to display it within the meaning of the statute. The court further looked to legislative history and the 2014 decision in Aereo to note the application of the Copyright Act to new technologies. Continue reading
In a rare show of bipartisanship, Congress has proposed legislation that would financially benefit music creators who have either been overlooked in the past or are compensated on inconsistent terms. Three bills – the Fair Play, Fair Pay Act, the CLASSICS Act and the Music Modernization Act (all of which have bipartisan support) – were introduced in 2017 to reform Copyright laws and bring balance to the music industry. As copyright reform has gained much traction in the past month, with a House Judiciary field hearing that took place in New York City on January 26, 2018, the three bills represent hope for change and needed updates in the digital music era.
Fair Play, Fair Pay Act
The Fair Play, Fair Pay Act, introduced March 2017, aims to extend a copyright owner’s rights to include the right to perform a sound recording publicly by means of any transmission – including traditional broadcast. Currently, the Copyright Act affords the owners of musical compositions (the underlying music and lyrics) the right to perform a sound recording publicly, but only provides a much narrower public performance right for owners of sound recordings, limited to performance by means of digital transmissions by cable, satellite, and internet radio stations. For instance, when an internet radio station such as Pandora streams a song, the artist and record label receive a statutory royalty for the performance of the sound recording, but when that same song is played on terrestrial AM/FM radio, the artist and record label are not compensated (in both scenarios the writer and/or publisher of the song is paid for the performance of the composition, though). The radio industry has consistently defended the lack of monetary compensation for radio air play, citing the promotional value that radio uniquely brings an artist and record label. Continue reading
The U.S. Court of Appeals for the Sixth Circuit recently affirmed a lower-court decision that Viacom’s use of the trademark “BUBBLE GUPPIES” for promotional merchandise for its show of the same name did not infringe on a children’s clothing brand that had registered the trademark “GUPPIES,” primarily because the “GUPPIES” mark – which had been used for many years before Viacom’s use– was relatively unknown to the public.
According to the lawsuit, Plaintiffs Debbie and Dean Rohn have operated Guppie Kids, Inc., a children’s apparel brand, since 1990. The couple registered two trademarks for apparel-related items: one for the word “GUPPIE,” an acronym for “Growing Up Playing Pursuing Individual Excellence,” and the other for a logo: the word “GUPPIE,” in which a fish in a necktie forms the letter G. Continue reading
On January 9th, Kodak announced its intention to enter the cryptocurrency craze by developing a blockchain-based service that presumably allow participating photographers to get paid each time their licensed work is used on the Internet without their prior consent. As described on the company’s website, the digital platform, currently referred to as KODAKOne, will “provide continual web crawling to monitor and protect the [intellectual property] of images registered in the KODAKOne system.” Upon detection of an unlicensed use, Kodak will manage the post-licensing process and (i) have the picture removed, or (ii) compensate the participating photographer in the company’s own currency, referred to as KodakCoin. By December 11th, the company’s stock had more than tripled. Continue reading