Copyright – Page 16 – Attorney Evan Brown

September 3, 2008 Copyright, DMCA, Litigation, Uncategorized

Veoh eligible for DMCA Safe Harbor

[Brian Beckham is a contributor to Internet Cases and can be contacted at brian.beckham [at] gmail dot com.]

Io Group, Inc. v. Veoh Networks, Inc., 2008 WL 4065872 (N.D.Cal. Aug. 27, 2008)

The U.S. District Court for the Northern District of California ruled that Veoh’s hosting of user-provided content is protected by the DMCA safe harbor provision, and that it does not have a duty to police for potential copyright infringement on behalf of third-parties, but rather must act to remove infringing content when so put on notice.

IO produces adult films; Veoh hosts, inter alia, its own “Internet TV channels” and user-posted content (much like YouTube). In June 2006, IO discovered clips from ten (10) of its copyrighted films ranging from 6 seconds to 40 minutes in length hosted on Veoh. Rather than sending Veoh a “DMCA Notice & Takedown” letter, IO filed the instant copyright infringement suit. (Coincidentally, Veoh had already removed all adult content sua sponte — including IO’s prior to the suit). Had Veoh received such a notice, so the story goes, it would have removed the content, and terminated the posting individual’s account.

When a user submits a video for posting, Veoh’s system extracts certain metadata (e.g., file format and length), assigns a file number, extracts several still images (seen on the site as an icon), and converts the video to Flash. Prior to posting, Veoh’s employees randomly spot check the videos for compliance with Veoh’s policies (i.e., that the content is not infringing third-party copyrights). On at least one occasion, such a spot check revealed infringing content (an unreleased movie) which was not posted.

Veoh moved for summary judgment under the DMCA’s Safe Harbors which “provide protection from liability for: (1) transitory digital network communications; (2) system caching; (3) information residing on systems or networks at the direction of users; and (4) information location tools.” Ellison, 357 F.3d at 1076-77. Finding that Veoh is a Service Provider under the DMCA, the Court had little trouble in finding that it qualified for the Safe Harbors. IO admitted that Veoh “(a) has adopted and informed account holders of its repeat infringer policy and (b) accommodates, and does not interfere with, “standard technical measures” used to protect copyrighted works”, but took issue with the manner in which Veoh implemented its repeat infringer policy.

Veoh clearly established that it had a functioning DMCA Notice & Takedown system:

Veoh has identified its designated Copyright Agent to receive notification of claimed violations and included information about how and where to send notices of claimed infringement.
Veoh often responds to infringement notices the same day they are received.
When Veoh receives notice of infringement, after a first warning, the account is terminated and all content provided by that user disabled.
Veoh terminates access to other identical infringing files and permanently blocks them from being uploaded again.
Veoh has terminated over 1,000 users for copyright infringement.

The Court held that Veoh did not have a duty to investigate whether terminated users were re-appearing under pseudonyms, but that as long as it continued to effectively address alleged infringements, it continued to qualify for the DMCA Safe Harbors; moreover, it did not have to track users’ IP addresses to readily identify possibly fraudulent new user accounts.

The Court further noted that: “In essence, a service provider [Veoh] is eligible for safe harbor under section 512(c) if it (1) does not know of infringement; or (2) acts expeditiously to remove or disable access to the material when it (a) has actual knowledge, (b) is aware of facts or circumstances from which infringing activity is apparent, or (c) has received DMCA-compliant notice; and (3) either does not have the right and ability to control the infringing activity, or – if it does – that it does not receive a financial benefit directly attributable to the infringing activity.”

The Court found that (1) there was no question that Veoh did not know of the alleged infringement — since IO did not file a DMCA Notice (2) it acted expeditiously to remove user-posted infringing content, (3) it did not have actual knowledge of infringement, (4) it was not aware of infringing activity, and (5) it did not have the right and ability to control the infringing activity (the Court did not address any financial benefit).

In sum: the Court “[did] not find that the DMCA was intended to have Veoh shoulder the entire burden of policing third-party copyrights on its website (at the cost of losing its business if it cannot). Rather, the issue [was] whether Veoh [took] appropriate steps to deal with [alleged] copyright infringement.”

There is much speculation as to how, if at all, this case will affect the Viacom / YouTube case. YouTube praised the decision, Viacom noted the differences. Each case turns on its own facts, but to the extent there are similarities, this decision is wind in YouTube’s sails.

Case is: IO Group Inc.(Plaintiff), v. Veoh Networks, Inc. (Defendant)

August 20, 2008 Copyright, DMCA, Fraud/Misrepresentation

Sender of DMCA takedown notice should consider fair use

Lenz v. Universal Music Corp., No. 07-3783 (N.D. Cal. August 20, 2008). [Download the opinion]

Hat tip to Joe Gratz for breaking this story.

One of the things that a person sending a takedown notice under the Digital Millennium Copyright Act (DMCA) has to swear to is that he or she “has a good faith belief that use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law.” 17 U.S.C. §512(c)(3)(A) (emphasis added). If the sender of the takedown notice makes a knowingly material misrepresentation as to whether the law authorizes the use of the material, the party whose content is taken down can sue under 17 U.S.C. §512(f). This serves as a backstop against DMCA takedown abuses.

Suppose that the complained-of work may be protected by fair use. If the sender is deliberately ignorant of that possibility, can that result in a misrepresentation that runs afoul of 512(f)? That question had not been answered before today, when the U.S. District Court for the Northern District of California said “yes.”

The case is Lenz v. Universal Music Corp., No. 07-3783. You may have heard of this case before, as it’s the one where the mom filmed her daughter dancing to Prince’s “Let’s Go Crazy” and uploaded that to YouTube, only to have it removed after a Universal DMCA takedown notice. Lenz sued under §512(f) and Universal moved to dismiss.

In its motion to dismiss, Universal contended that copyright owners cannot be required to evaluate the question of fair use prior to sending a takedown notice because fair use is merely an excused infringement of a copyright rather than a use authorized by the copyright owner or by law.

But the court disagreed. “[T]he fact remains that fair use is a lawful use of a copyright. Accordingly, in order for a copyright owner to proceed under the DMCA with ‘a good faith belief that use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law,’ the owner must evaluate whether the material makes fair use of the copyright.” The court went on to say that “[a]n allegation that a copyright owner acted in bad faith by issuing a takedown notice without proper consideration of the fair use doctrine thus is sufficient to state a misrepresentation claim pursuant to Section 512(f) of the DMCA.”

Because Lenz’s complaint contained allegations of this nature, it was detailed enough to pass Twombly muster [Bell Atlantic Corp. v. Twombly, — U.S. —-, 127 S. Ct. 1955, 1964-65 (2007)], and the case moves forward.

The practical effect of this decision is that one sending a DMCA takedown notice without considering whether the person who posted the content is making a fair use, does so at his or her peril. Let’s be clear — the decision does not mean that sending a takedown notice in a situation where it turns out to be a fair use will automatically result in a finding of §512(f) misrepresentation. But it does add another implicit item on the checklist of the takedown notice sender.

June 30, 2008 Copyright, Cybersquatting

Statutory damages for copying competitor’s catalog on website

Silver Ring Splint Co. v. Digisplint, Inc., 2008 WL 2478390 (W.D.Va. June 18, 2008)

Silver Ring and Digisplint are competitors in a niche industry, each producing and selling fine jewelry quality finger splints made of gold and sterling silver. Silver Ring sued Digisplint for copyright infringement alleging that Digisplint copied text from Silver Ring’s 1994 catalog, and posted that text on Digisplint’s website.

Before trial, the court awarded summary judgment to Silver Ring on the question of liability for copyright infringement. The question of damages proceeded to trial. Finding that “nearly identical and very similar text comprise[d] substantial portions of both [works],” and that the similarities were “obvious and persuasive,” the court awarded Silver Ring $30,000 in statutory damages pursuant to 17 U.S.C. §504(c)(1). It found that Digisplint’s copying was willful, and although Digisplint reaped no profits from the infringement, the award was to serve as a deterrent to future conduct of the sort.

Digisplint had filed a counterclaim pursuant to the Anticybersquatting Consumer Protection Act (ACPA) over Silver Ring’s registration of digisplint.com. The court found in favor of Digisplint on this claim, and entered an injunction against any further registration of a confusingly similar domain name. But because Silver Ring registered the domain name in 1998, prior to the enactment of the ACPA, Digisplint was entitled to no money damages, only an injunction.

June 19, 2008 Copyright

Auction of promo CDs covered under first sale doctrine

UMG Recordings v. Augusto, —F.Supp.2d —-, 2008 WL 2390037 (C.D. Cal. June 10, 2008)

Some record companies create promotional CDs that they distribute to music industry insiders before an album is released. These promo CDs bear the following language:

This CD is the property of the record company and is licensed to the intended recipient for personal use only. Acceptance of this CD shall constitute an agreement to comply with the terms of the license. Resale or transfer of possession is not allowed and may be punishable under federal and state laws.

Troy Augusto is not an industry insider, but he bought copies of promo CDs in record stores and online, and he resold those copies on eBay. Record label UMG sent a notice to eBay under eBay’s Verified Rights Owner program (“VeRO”) and got Augusto’s account suspended. UMG also sued Augusto for copyright infringement. Augusto counterclaimed under Section 512(f) of the Digital Millennium Copyright Act (“DMCA”), claiming that UMG knowingly misrepresented to eBay that the auctions infringed UMG’s copyrights.

Both sides moved for summary judgment on whether Augusto had infringed, and Augusto also moved for summary judgment on the DMCA misrepresentation claim. The court granted Augusto’s motion as it related to infringement, but denied it as to misrepresentation.

The court found that Augusto’s conduct was protected by the first sale doctrine. This principle is codified at 17 U.S.C. §109(a) and provides that “the owner of a particular copy or phonorecord lawfully made under [Title 17 of the United States Code]… is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.” To invoke the first sale doctrine, Augusto had to show that (1) the CDs were lawfully manufactured with UMG’s authorization, (2) UMG transferred title to the CDs, (3) Augusto was the lawful owner of the CDs, and (4) Augusto disposed of, but did not reproduce, the CDs.

In this case, it was undisputed that the CDs were lawfully manufactured by UMG and that Augusto did not reproduce them. The remaining elements, i.e., that UMG transferred title to the CDs and Augusto was the lawful owner of them, hinged on the question of whether the mailing of the CDs to the industry insiders resulted in a transfer of title.

The court found that title to the CDs passed because the language on them did not create a valid license, and the recipients were entitled to treat the CDs as gifts pursuant to the Postal Reorganization Act, 39 U.S.C. §3009.

In determining that the purported license was invalid, the court found that a significant hallmark of a license — an intent to regain possession — was missing. Further, the absence of any recurring benefit to UMG (the recipients were under no obligation to promote the music) suggested the distribution was a mere gift or sale, and not a license.

Moreover, the only benefit to UMG in having the provision enforced as a license would be to restrain trade, which would run contrary to century old Supreme Court precedent.

The court determined that the CDs were, under the Postal Reorganization Act, a gift. Under that act, if one mails unordered merchandise to a consumer without the consumer’s consent, the merchandise may be treated as a gift, and the consumer may dispose of it as he or she sees fit. Despite UMG’s argument to the contrary, the court held that industry insiders receiving the promo CDs were consumers. The court further held (rejecting UMG’s argument) that the Postal Reorganization Act did not apply only to merchandise for which payment was requested.

In rejecting Augusto’s DMCA Section 512(f) claim that UMG misrepresented the fact of infringement when it demanded eBay remove the auctions, the court found that UMG had a subjective good faith belief in its assertions. Under the holding of Rossi v. MPAA, 391 F.3d 1000 (9th Cir. 2004), this subjective good faith belief could not constitute a Section 512(f) misrepresentation.

June 18, 2008 Copyright

UMG and Motley Crue sued for infringement of band photos

Toma v. Motley Crue et al., No. 08-3479 (N.D. Ill., Filed June 17, 2008)

The purported owner of the copyright in photos taken of members of Motley Crue way back in 1981 has filed suit in the U.S. District Court for the Northern District of Illinois, alleging that the band, Universal Music Group and Singatures Network have committed copyright infringement. [Read the Complaint] Interesting to see UMG, who is frequently on the dishing-it-out side in so many of the file sharing lawsuits now being put in the position of taking it.

The claims in the lawsuit are pretty straightforward, and the complaint is written in typical federal pleading bare bones style. In a nutshell, plaintiff Toma allegedly acquired the copyright in the photos through assignment from the photgrapher, one Michael Pinter (though Toma didn’t seek registration until March of this year). The defendants are alleged to have committed infringement by “publishing and selling” copies of the images.

Toma seeks actual damages plus costs and attorney’s fees (not sure of the basis for an attorney’s fee award given the timing of registration) as well as injunctive relief from any futher infringement.

June 9, 2008 Copyright, Uncategorized

Ben Stein’s “Expelled” film permitted to use clip from Lennon’s “Imagine”

Judge Stein of the U.S. District Court for the Southern District of New York ruled last week that use of portions of the song “Imagine” in the film “EXPELLED: No Intelligence Allowed” were protected as fair use. Plaintiffs Yoko Ono and record label EMI sued Defendants (the producers of the film) for copyright infringement seeking an injunction to stop the use. After hearing oral arguments and viewing the movie, the Court found that the Plaintiffs failed to meet the burden of showing irreparable harm since “on the basis of the current record, defendants are likely to prevail on their affirmative defense of fair use.”

“Expelled”, a full-length movie on intelligent design narrated by Ben Stein uses a 15-second clip of the song with the words “nothing to kill or die for, and no religion too” transposed on the screen over black and white archive sequences (including a military march and a close up of Stalin). Immediately preceding the excerpt several speakers express the hope that science will diminish religion. In a voiceover, Stein notes the speaker “would like you to think he’s being original but he’s merely lifting a page out of John Lennon’s songbook.”

According the one producer, “the film undertakes to inspire viewers to participate in the scientific, political, cultural, and religious debates surrounding [intelligent design].” Defendants obtained permission to include every song in the movie except Imagine. Defendants timed the films release to coincide with state “Academic Freedom” bills (which permit teachers to criticize the theory of evolution.)

The Court first determined that Plaintiffs established a prima facie case of copyright infringement by showing (1) ownership of a valid copyright and (2) unauthorized copying. Accordingly, absent the injunction there is a presumption of irreparable harm. Turning next to Defendants defense of fair use, the Court held that (quoting Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 and U.S. Const. art. I, § 8, cl. 8), that “some opportunity for fair use of copyrighted materials [is] necessary to fulfill copyright’s very purpose, ‘[t]o promote the Progress of Science and useful Arts. . . ‘.”

Taking the fair use factors into consideration, the Court held that: (1) the use of Imagine is not merely exploitative, and since the movie stimulates debate, the commercial purpose of “Expelled” weighs weakly against fair use (Defendants’ use is transformative and for purposes of criticism and commentary, i.e., “what the filmmakers see as the naïveté of John Lennon’s views [in that] ‘Imagine’ is a secular anthem caught in a loop of history recycling the same arguments from years past through to the present,” thus “it is not necessary that defendants [transform] the music or lyrics of the song”, nor that Defendant’s could have made the film without the clip, moreover, the failure to seek permission did not weigh against fair use (2) the film comments on the song, and does not exploit its creative virtues, (3) “both quantitatively and qualitatively, the portion of ‘Imagine’ that defendants copy is reasonable in light of their purpose for doing so [, and thus] weighs in favor of fair use”, and (4) there is absolutely no evidence that the film’s use will usurp the market for “Imagine.”

Balancing the potential hardships to the parties if an injunction were issued, the evidence favored Defendants, especially since Plaintiffs were not likely to lose any licensing revenue. Unless Yoko and EMI expel this decision on appeal, they will not Win Ben Stein’s Money.

Case is: Lennon v. Premise Media, No. 08-3813

Court reconsiders “making available” in file-sharing case

A U.S. District Court judge in Minnesota presiding over the case of Capitol Records Inc. v. Jammie Thomas has issued an Order breathing new life into the Defendant’s case.

Thomas was found liable for copyright infringement for activities over the KaZaA network, and had moved for either a new trial or lowering of damages on the ground that the amount of the jury award ($220,000 for 24 songs at $9,250 each) was excessive and a violation of due process. The Court’s Order however, stated that it was “contemplating granting a new trial for a different reason”, because Jury Instruction No. 15 which stated that that “[t]he act of making copyrighted sound recordings available for electronic distribution on a peer‐to‐peer network, without license from the copyright owners, violates the copyright owners’ exclusive right of distribution, regardless of whether actual distribution has been shown” was contrary to prevailing case law. Specifically, the Court noted that binding Eighth Circuit precedent from National Car Rental System, Inc. v. Computer Associates Int’l, Inc., required that “[i]nfringement of [the distribution right] requires an actual dissemination of either copies or phonorecords…”

The order notes that this precedent appears to require “actual dissemination” but that neither party brought this to the Court’s attention. The Order goes on to state that “at least one authority relied upon by Plaintiffs…Atlantic Recording Corp. v. Howell [blogged here], has since been vacated, and, on reconsideration, that court has now held that making sound recordings available for distribution is not actionable under the Copyright Act and that ‘actual distribution’ is required.” The Court invited amicus briefs on the issue, and will hear arguments in the case on July 1, 2008.

Case is: Civil File No. 06‐1497 (MJD/RLE)

Distribution under the Copyright Act requires more than merely making copies available

Atlantic Records v. Howell, No. 06-2076 (D. Az. April 29, 2008)

Several record companies, including Atlantic Records, sued Pamela and Jeffrey Howell after the record companies learned, through their private investigator, that the Howells used KaZaA to share files. After discovery in the matter closed, the record companies moved for summary judgment, asserting that the Howells infringed the copyright in the sound recordings merely by making them available for the public to copy. The court found in favor of the Howells and denied the motion.

The Copyright Act provides that an owner of a copyright enjoys certain exclusive rights in connection with the work including, among other things, the exclusive right to distribute copies of the work. The record companies case was a bit problematic on this point, as the only evidence of record was that the allegedly infringed files were in KaZaA’s shared folder. There was no indication that actual copies of the files had been transferred.

In support of the argument that making the sound recordings available was an unauthorized distribution, the record companies relied heavily on Hotaling v. Church of Jesus Christ of Latter-Day Saints, 188 F.3d 199 (4th Cir. 1997). In Hotaling, the court held that a library which created a number of unauthorized copies of a work and made those copies available in its various branches could be liable for infringement, despite the absence of evidence that any member of the public had viewed the unauthorized copies.

The Hotaling decision was based largely on policy grounds. The library kept no records of who had viewed the unauthorized copies, thus the plaintiff could not provide direct evidence that the works were distributed to the public. The court opined it would be against sound policy for defendants to avoid liability through the omission of record keeping.

The court in this case rejected and criticized the Hotaling decision, holding that evidence of making a copy available “only shows that [a] defendant attempted to distribute the copy, and there is no basis for attempt liability in the statute, no matter how desirable such liability may be as a matter of policy.”

The recording companies argued that although the term “distribution” is not explicitly defined in the Copyright Act, it is synonymous with the term “publication,” which the statute defines to include “[t]he offering to distribute copies or phonorecords to a group of persons for purposes of further distribution, public performance, or public display.” 17 U.S.C. § 101. In other words, if the Howells offered to distribute the copyrighted works to the public for purposes of further distribution, they distributed the works within the meaning of the Copyright Act.

But the court looked to the plain meaning of statutory provision granting an exclusive right to distribute, which requires an identifiable copy of the work to change hands in one of a number of prescribed ways (e.g., sale or lease) for there to be a distribution. The court found it untenable that the definition of a different word in a different section of the statute was meant to expand the meaning of “distribution” and liability to include offers to distribute.

A guide to registering the copyright in your blog

The required procedures for registering claims of copyright in the United States Copyright Office don’t match up well with the practicalities of modern web publishing. It would be almost a full time job to file new copyright applications each time a blog is updated, let alone prohibitively expensive. And what on earth forms are you supposed to fill out? How do you send in a copy of your blog to claim copyright registration in it?

Sarah Bird, Esquire over at SEOmoz.org has written an excellent little article titled Copyright: Sample Forms and Strategies for Registering your Online Content which helps cut through the confusion and anachronisms you’ll face when sending materials to the Copyright Office. She’s a terrific writer (I wish I could write so clearly), and does a great job outlining a subject that is needlessly confounding.