Category: Copyright

Case is rare appellate decision under Semiconductor Chip Protection Act of 1984

Altera Corporation filed suit in the U.S. District Court for the Northern District of California against Clear Logic, Inc., a competitor in the semiconductor industry. Altera alleged that Clear Logic had violated the Semiconductor Chip Protection Act of 1984, 17 U.S.C. §901 et seq. (“SCPA”), by using the bitstream generated when programming Altera programmable logic devices to create application-specific integrated circuits. A jury found in favor of Altera, and awarded more than $30 million in damages, plus an additional $5 million in interest and costs.

Clear Logic appealed to the Ninth Circuit, arguing that the trial court improperly instructed the jury regarding the affirmative defense of legitimate reverse engineering, which is provided for under the SCPA. The court affirmed, however, holding that certain misstatements of the law in the jury instructions were harmless error.

The trial court’s instructions initially defined “legitimate reverse engineering” to allow copying and analyzing only “non-protectible concepts or techniques” embodied in a mask work. This was an incorrect statement of the law, but the court concluded that further instructions adequately provided correction. The later instructions explained that “it is permissible [under the SCPA] to reproduce ‘a registered mask work’ as a step in the process of creating an original chip, so long as the purpose of reproducing the chip is appropriate.”

Accordingly, the court held that the jury was able to properly conclude that the Clear Logic mask works incorporated into the application-specific integrated circuits were not original, but were copies prohibited under the SCPA.

Altera Corporation v. Clear Logic, Inc., — F.3d —, 2005 WL 2233252 (9th Cir., September 15, 2005).

The U.S. District Court for the Northern District of California has entered judgment in excess of $175,000 against a defendant accused of copyright infringement and unauthorized commercial use of photographs on the Internet.

Without authorization, defendant Adkins copied and posted over 100 of plaintiff IO Group’s copyrighted images. IO filed suit against Adkins in federal court, alleging violation of the Copyright Act (17 U.S.C. §101 et seq.) and unauthorized commercial use of the photographs in violation of California Civil Code §3344. IO had registered the copyrights in each of the images. It had also obtained releases from each of the models appearing in the photographs, whereby IO became the “exclusive proprietor of the models’ rights of publicity in the photographs.”

Adkins never responded to the summons, and the court entered judgment by default. The court determined that IO had alleged sufficient facts to state claims for copyright infringement and unauthorized commercial use of the photographs.

In awarding damages, the court found that IO was entitled to $1,000 per image as statutory damages for copyright infringement. See, 17 U.S.C. 504(c)(1). The court determined that such an amount was proper given the fact that over 100 images were involved, and that IO had previously taken steps to maintain the value of the photographs by limiting their distribution.

The court awarded $750 per image as damages for violation of California Civil Code §3344(a). It noted that such an award was not duplicative of an award of damages under the Copyright Act, as this portion of the case related to the models’ rights of publicity, not the unauthorized copying of the images. Earlier in the opinion, the court had noted the holding of Downing v. Abercrombie & Fitch, 265 F.3d 994 (9th Cir. 2001), which states that “[a] person’s name or likeness is not a work of authorship within the meaning of [the Copyright Act].”

IO Group, Inc. v. Adkins, 2005 WL 1492381 (N.D. Cal., June 23, 2005).

Nearly everyone is talking about the Grokster decision which was handed down by the U.S. Supreme Court this morning. For an excellent and thorough analysis, read Professor Eric Goldman’s posting.

In the case of Attig v. DRG, Inc., the U.S. District Court for the Eastern District of Pennsylvania has held that former clients of a web developer had an implied, nonexclusive copyright license to copy and move to different servers two websites that plaintiff web developer created and hosted for them.

Late in 1999, plaintiff Attig, a website developer, entered into an agreement with defendants to update and host two of defendants’ websites. One of the individual defendants had created the original versions of these sites using a template. Attig agreed to give the sites a “facelift,” add some basic information, and arrange for hosting. Defendants paid each invoice in full for web development services that Attig sent them.

In 2003, the defendants hired a new technology consultant to assist them with their web development matters. During this process, the defendants switched to a different hosting provider. Attig filed suit, claiming that he owned the copyright in the websites, and alleged that the defendants infringed his copyright by moving the sites to a different web server. The defendants moved for summary judgment, and the court granted the defendants’ motion.

Defendants presented several arguments in favor of their motion for summary judgment. Among those arguments was that Attig, in creating and delivering the websites to defendants, granted them an irrevocable, nonexclusive implied license. The court agreed with this argument. The defendants’ conduct in copying the sites do a different server did not exceed this implied license, thus they could not be liable for copyright infringement.

The court noted that “a nonexclusive license arises where the creator of a work, at the defendant’s request, hands it over, intending that the defendant copy and distribute it.” This analysis (according to the Ninth Circuit decision in Effects Associates v. Cohen, 908 F.2d 555 which was relied upon by the court) requires a determination of whether (1) the licensee requests the creation of a work, (2) the licensor makes that particular work and delivers it to the licensee, and (3) the licensor intends that the licensee copy and distribute the work.

The court easily found that the first two prongs of the analysis were met. The third prong required more discussion, but ultimately the court found that Attig had intended that the defendants copy and use the websites. To make this determination, the court looked for guidance in the Southern District of New York case of Holtzbrinck Publishing Holdings, L.P. v. Vyne Communications, Inc., 2000 WL 502860. Of particular importance in that case was the common sense determination that a customer would not be willing to pay good and valuable consideration for a site that it could not use. In this case, Attig had placed a copyright notice on one of the sites he updated, attributing ownership to the one of the defendants. He also sent correspondence referring to the sites as belonging to defendants. The court found these facts to reveal Attig’s intent regarding ownership.

Attig v. DRG, Inc., 2005 WL 730681 (E.D.Penn., March 30, 2005).

Shady Records, Inc. (“Shady”), filed suit against Source Enterprises, Inc. (“Source”) and others for copyright infringement arising from Source’s publication on its website of various songs by Marshall Mathers III (widely a/k/a “Eminem”). After a long process of litigation leading up to trial, Shady moved to voluntarily dismiss its claims of copyright infringement. Accordingly, the court dismissed the action with prejudice.

While most defendants would be fully satisfied by the plaintiff voluntarily withdrawing its claims and the court dismissing the action with prejudice, Source wanted some extra conditions imposed on the dismissal. One of the requested conditions was for the court to memorialize a finding that Source’s past use of the Eminem songs on its website was fair use. Furthermore, Source asked the court to determine that any future use of the Eminem songs would also constitute fair use.

The court declined to add these extra conditions to the dismissal order. It noted that Source “misconceive[d] the consequences of a successful result in this case.” Questions of fair use are highly fact-intensive, and the court held that “it would, indeed, be highly inappropriate . . to issue an advisory opinion about any particular hypothetical use of the material in the future. . . .” The dismissal with prejudice means that Shady is not entitled to any relief based on Source’s past actions. “That is the totality of the adjudication that defendants are entitled to, and that is what they will receive by the [dismissal of the action].”

Shady Records, Inc. v. Source Enterprises, Inc., 2005 WL 696795 (S.D.N.Y., March 23, 2005).

The Second Circuit has upheld the U.S. District Court for the Southern District of New York’s grant of summary judgment in favor of the National Geographic Society and related entities, holding that the creation and distribution of electronic versions of National Geographic did not infringe the copyrights of the contributing photographers and authors. Applying the standard set forth in New York Times v. Tasini, the court determined that the electronic version was a “privileged revision” under Section 201(c) of the Copyright Act.

In 1996, the National Geographic Society took each and every issue of National Geographic Magazine since 1888 and scanned them electronically, two pages at a time. The resulting images were placed on CD-ROMs and sold to the public. The compilation was called the Complete National Geographic.

The plaintiffs in this case, photographers and authors of numerous photos and articles that appeared in National Geographic over the years sued the National Geographic Society and related entities for copyright infringement. The plaintiffs alleged that the copyrights in their works were infringed when the works appeared in the Complete National Geographic.

Defendants argued that the electronic compilation did not infringe the plaintiffs’ copyrights because it was a privileged revision of a collective work as provided in Section 201(c) of the Copyright Act. The district court agreed with the defendants and granted summary judgment in their favor. The Second Circuit affirmed.

Section 101 of the Copyright Act defines a collective work as a “work, such as a periodical, issue, anthology, or encyclopedia in which a number of contributions, constituting separate and independent works in themselves, are assembled into a collective whole.”

An obvious example of a collective work is any magazine. The photographers that take the photos appearing in the magazine and the authors that pen the articles may own the copyrights in those individual works, but all the elements combined together give rise to a new work based on the way in which the elements are selected or arranged. The publisher of the magazine can own the copyright in the way the elements are selected or arranged, i.e., the collective work, while the copyrights in the individual works making up the magazine remain with the photographers and authors.

Section 201(c) of the Copyright Act sets forth how an owner of a copyright in a collective work may use the individual works. “[T]he owner of copyright in the collective work is presumed to have acquired only the privilege of reproducing and distributing [a] contribution as part of that particular collective work, any revision of that collective work, and any later collective work in the same series.”

In this case, the court employed the test set forth in the Supreme Court case of New York Times v. Tasini, 533 U.S. 483 (2001) to determine that the replication of the pages of the National Geographic magazine was acceptable under Section 201(c) of the Act, and thus did not give rise to copyright infringement. The Tasini case required an analysis of how the individual photos and articles were “presented to, and perceptible by” users of the electronic versions. Because the entire works were merely scanned as they appeared in the original print versions, the original context of the magazines was “omnipresent” in the electronic compilation. The court held that the electronic compilation was simply a new version of the magazine, and therefore privileged under Section 201(c) of the act.

Faulkner v. Mindscape Inc., — F.3d —-, 2005 WL 503652 (2d Cir., March 4, 2005).