Category: Copyright

August 30, 2007 Copyright

Copyright infringement threshold set at 70%

Bensbargains.net, LLC v. XPBargains.com, No. 06-1445, 2007 WL 2385092 (S.D. Cal. August 16, 2007).

Before we get into this case, I’d like to thank all the long time readers of Internet Cases. Some of you have been with me since the beginning way back in January 2005. Hard to believe, but this is the 300th post to this weblog. Onward and upward!

And now for an interesting copyright decision from California.

Ben Chui searches the web for good deals on products — from pens to mountain bikes — and posts his findings on his website bensbargains.net. In October 2005, Chui noticed that a competing website, XPBargains.com began featuring a lot of the same deals. Chui sued for copyright infringement in the U.S. District Court for the Southern District of California.

XPBargains.com moved for summary judgment. The court granted the motion in part and denied it in part. Although it was largely a win for XPBargains.com, the game ain’t over.

There were two main issues in the case. The first related to whether Chui owned a copyright in the selection and arrangement of the deals he selected. The second important issue was whether XPBargains’s conduct amounted to actionable copying.

On the first issue, whether the collection of deals was copyrightable, the court found that there was Feist originality because the “compilation [was] not an inclusive list of all deals for all products.” Instead, Chui used “his individual judgment to select among multiple deals for various product.”

As for actionable copying, the court held that some of XPBargains’s postings were similar enough to Chui’s selections to raise a triable issue. Interestingly, the court set that threshold at 70%. (It’s unusual for a court to be so mathematical.) For those instances where the number of identical selections appeared on both Chui’s site and XPBargains.com, the court held that the question of infringement could continue to trial.

Opinion appears below (or click through if it’s not showing up in the RSS feed):

August 23, 2007 Copyright

Open source license bars claim for copyright infringement

Jacobsen v. Katzer, No. 06-1905, 2007 WL 2358628 (N.D. Cal. August 17, 2007).

Plaintiff Jacobsen wrote some decoder definition files and made them available under an open source license used by the Java Model Railroad Interface Project. This open source license granted broad rights to members of the general public to do certain things with the software, including

— the right to distribute and create derivative works from the software, provided that the licensee give proper credit to the JMRI Project original creators.

— the right to make or give away verbatim copies of the source form without restriction provided that the licensee duplicate all of the original copyright notices and associated disclaimers.

— the right to distribute the copyrighted work “in a more-or-less customary fashion, plus [have] the right to make reasonable modifications.”

— the right to “distribute [the material] in aggregate with other (possibly commercial) programs as part of a larger (possibly commercial) software distribution provided that [the licensee] not advertise [the material] as a product of [the licensee’s] own.”

Jacobsen sued defendant Katzer for copyright infringement, claiming that without permission or consent, Jacobson made copies of the software, distributed copies to the public, or created derivative works. He also moved for a preliminary injunction. The court denied the motion.

The opinion explains the distinction between causes of action for infringement on one hand, and and breach of contract on the other, when a licensee violates some term of the agreement. In general, the court observed, a non-exclusive license, like the one in this case, is a waiver of the right to sue for infringement. So long as the licensee’s use of the work is within the scope of the license (say, only to distribute and not make copies), any other violation of a condition of the agreement, (like providing attribution), would allow only for a breach of contract action.

In this case, the court looked to the open source license at issue and found that

[T]he scope of the nonexclusive license is, therefore, intentionally broad. The condition that the user insert a prominent notice of attribution does not limit the scope of the license. Rather, Defendants’ alleged violation of the conditions of the license may have constituted a breach of the nonexclusive license, but does not create liability for copyright infringement where it would not otherwise exist.

Accordingly, the Court found that Jacobsen’s claim properly sounded in contract and therefore had not met his burden of demonstrating likelihood of success on the merit of his copyright claim.

Case appears below (or click through if it’s not showing up in the RSS feed):

August 3, 2007 Copyright, DMCA

Internet Archive malfunction leads to interesting DMCA and infringement case

Healthcare Advocates, Inc. v. Harding, Earley, Follmer & Frailey, — F.Supp.2d —-, 2007 WL 2085358 (E.D. Pa., July 20, 2007). [Download the opinion]

(This case has been pretty well covered already in the legal blogosphere, including here and here, but this is my $0.02 anyway.)

Plaintiff Healthcare Advocates sued defendant law firm Harding, Earley Follmer & Frailey, as well as a number of attorneys and staff at the firm for copyright infringement and violation of the anticircumvention provisions of the Digital Millennium Copyright Act (“DMCA”). The defendants moved for summary judgment, asserting that the alleged infringement was excused under the doctrine of fair use, and that the alleged conduct under the DMCA did not constitute a “circumvention” as contemplated under the statute. The court granted the defendants’ motion for summary judgment.

The dispute between the parties arose from a novel factual scenario. The defendants used the Internet Archive’s Wayback Machine to access cached versions of the plaintiff’s website. A few days earlier, the plaintiffs had configured a robots.txt file to be used in connection with their site, which should have – in the normal course of operations – prevented the web pages from showing up in the Internet Archive. [More on robots.txt files] But as it turns out, the Internet Archive’s servers were malfunctioning when the defendants conducted their searches, so the pages that should have been excluded under the instructions in the robots.txt file showed up anyway.

The plaintiff claimed that by viewing the archived pages on their office computers without authorization (such lack of permission stemming from the exclusion instructions in the robots.txt file), the defendants violated the plaintiff’s exclusive right under 17 U.S.C. §106 to publicly display their copyrighted works, thereby committing infringement. And by accessing the cached versions in spite of the robots.txt file, the plaintiff argued, the defendants circumvented a technological measure used to prevent access to a copyrighted work, in violation of 17 U.S.C. §1201.

The court agreed that the plaintiffs established the two necessary elements of copyright infringement, namely, (1) ownership of valid copyrights in the web pages, and (2) that the defendants, by viewing the web pages on their office computers, violated the exclusive display right under §106. But the court went on to determine that there was no infringement, because the use made by the defendants was a protected fair use.

On the fair use question, the most significant factor in the court’s analysis was the “purpose and character” of the subsequent use that the defendants had made. The defendants had viewed the archived web pages in connection with their work in defending their client against allegations of infringement in another case brought by Healthcare Advocates. In holding that this investigation of the plaintiff’s online materials was a permissible fair use, the court stated that “[i]t would be an absurd result if an attorney defending a client against charges of trademark and copyright infringement was not allowed to view and copy publicly available material, especially mater that his client was alleged to have infringed.”

As for the DMCA anticircumvention claims, the court held that because the malfunctioning of the Internet Archive servers made it such that the exclusion instructions in the robots.txt file were not present, there was no protective measure in place to be circumvented. Plaintiffs had argued that even though the protective measure was not in place, defendants should have known that they did not have permission to view the cached pages, as some of the requests were met with messages that the page was blocked by the website owner. The court rejected this argument, and, nodding to the case of I.M.S. Inquiry Mgmt. Sys., Ltd. v. Bershire Info. Sys., Inc., 307 F.Supp.2d 521 (S.D.N.Y. 2004), held that a lack of permission is not circumvention under the DMCA.

June 21, 2007 Copyright

The $64,000 question: should you ignore Ron Coleman’s client?

No.

Defendant Nyarko turned a deaf ear on Plaintiff Burch’s demands that Nyarko pay Burch a licensing fee for the use on Nyarko’s website of four photos Burch took in Ghana. In fact, Burch claimed that Nyarko got pretty angry when Burch asked him for payment. So Burch sued for copyright infringement, and won.

Nyarko ignored the suit as well, so the court entered a default judgment. Then it came time to prove up the damages. This was all done on paper. Burch submitted some documents showing that he’d lost some revenue through the unauthorized use, and his attorneys submitted a declaration talking about how much Burch had spent on fees and court costs.

The court could have awarded up to $600,000 in statutory damages, because the copyrights in the photos were registered in time. So in a certain sense, you might consider Nyarko lucky when the court slapped him with a judgment of about $64,000, reflecting an award of $60,000 in statutory damages, plus attorney’s fees and costs.

The court looked at a number of factors to arrive at the amount of the award. Part of the basis was the fact Nyarko hadn’t been cooperative in the dispute. Another reason was because of the lost revenue Burch suffered. And the fact that the court found it necessary to deter others from ripping off other people’s works probably played some part in it as well. If there’s one thing to learn from the case, it’s to not be too flippant when an able attorney’s client tells you to pay up.

Burch v. Nyarko, No. 06-7022, 2007 WL 1732401 (S.D.N.Y. June 15, 2007).

June 13, 2007 Copyright

Colorado federal court allows discovery of anonymous P2P defendants

Warner Bros. Records Inc. v. Does 1-20, Slip Op., 2007 WL 1655365 (D.Colo. June 5, 2007)

Good cause for discovery before Rule 26(f) conference existed in light of looming threat of deletion of server data

A number of record companies, including Warner Brothers, UMG and Electra, filed yet another copyright infringement lawsuit against some individual P2P users on May 30 of this year. They didn’t know the names or the locations of the defendants, but only knew that the IP addresses from which the alleged infringement occurred belonged to Qwest Communications. So the plaintiffs asked the court for permission to obtain immediate discovery from Qwest to find out each John Doe defendant’s true name, address, telephone number, e-mail address, and Media Access Control address.

Unless a party seeking immediate discovery can show good cause as to why it should be otherwise, under Fed. R. Civ. P. 26(d), “a party may not seek discovery from any source before the parties have conferred as required by Rule 26(f).”

In this case, the record companies argued that because ISPs such as Qwest typically keep server logs for only brief periods of time, the plaintiffs might never identify the defendants without getting access to the data right away. The court held that “good cause exists where the evidence sought ‘may be consumed or destroyed with the passage of time, thereby disadvantaging one or more parties to the litigation.'” It granted the plaintiffs’ motion and allowed the service of the subpoena.

June 12, 2007 Copyright

“Counterfeit orders” alleged to give rise to copyright infringement

Hackers accused of unlawful distribution of copyrighted works

DeVry/Becker Educational Development Corp. produces materials used by persons studying for the CPA exam. It maintains a database which it uses to track and process orders of the copyrighted study materials. DeVry has filed a lawsuit in the U.S. District Court for the Northern District of Illinois [No. 07-3280 — download the complaint here], alleging that a number of John Doe defendants accessed the database and caused unauthorized orders to be shipped to residences in New York and Pennsylvania.

Not surprisingly, the complaint alleges common law fraud and violations of the Computer Fraud and Abuse Act [18 U.S.C. 1030], which prohibits unauthorized access to certain computer systems. The more creative claims, however, are for copyright infringement.

DeVry’s theory is that by causing the delivery of the study materials, the John Doe defendants engaged in an unauthorized distribution of the copyrighted works. It’s an interesting theory, and it raises some conceptual issues as to what “distribution” means. The complaint (e.g. at paragraph 52) says that DeVry is the one who (relying on the “counterfeit orders”), sent the course materials. It will be interesting to see whether one who is doing the sending can be different than the one doing the distributing.

DeVry Becker Ed. Dev. Corp. v. Does 1-10, No. 07-3280 (N.D. Ill., filed June 11, 2007).

March 29, 2007 Copyright

Ninth Circuit rules on Perfect 10 v. CCBill appeal

Another expansion of CDA immunity, as court holds online service providers are immune from state law-based intellectual property claims arising from content provided by third parties.

Perfect 10 v. CCBill, — F.3d —- (9th Cir. March 29, 2007)

Nearly three years after a significant district court opinion [340 F.Supp.2d 1077 (C.D. Cal. 2004)] examining the contours of DMCA safe harbor provisions and immunity under 47 U.S.C. 230, the Ninth Circuit has ruled in the appeal of Perfect 10 v. CCBill. This is a significant decision. Joe Gratz has posted a copy of the opinion.

One aspect of the opinion that is immediatley striking is the Ninth Circuit’s interpretation of 47 U.S.C. 230(e)(2). This provision requires the court to “construe Section 230(c)(1) (one of the immunity provisions) in a manner that would neither ‘limit [n]or expand any law pertaining to intellectual property.'” Gucci Am., Inc. v. Hall & Assocs., 135 F. Supp. 2d 409, 413 (S.D.N.Y. 2001).

Perfect 10 had brought a number of state law claims that arguably sounded in intellectual property, like unfair competition, false advertising and violations of the right of publicity. The district court held that the unfair competition and false advertising claims were not intellectual property claims, so the immunity was not limited by Section 230(e). But the lower court held that the right of publicity claim was one properly classified as intellectual property, so as for that, there was no immunity.

In this decision the Ninth Circuit made a bold leap to define “intellectual property” as it is used in Section 230. (You may recall this was almost an issue last year in the case of Almeida v. Amazon.com, Inc.)

Here’s the heart of the Ninth Circuit’s opinion on this point:

Because material on a website may be viewed across the Internet, and thus in more than one state at a time, permitting the reach of any particular state’s definition of intellectual property to dictate the contours of this federal immunity would be contrary to Congress’s expressed goal of insulating the development of the Internet from the various state-law regimes. *** In the absence of a definition from Congress, we construe the term “intellectual property” to mean “federal intellectual property.”

Accordingly, the Ninth Circuit reversed the district court’s holding that the claim for violation of the right of publicity was not barred by Section 230 immunity. So as the law stands now, at least in the Ninth Circuit, providers of interactive computer services are immune from suit under state-law intellectual property claims arising from content provided by third parties.

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