Copyright Basics: The Fair Use Doctrine

While browsing through YouTube videos I often find some of my favorite songs mashed up with video clips from movies, animations, and video games. Inevitably these videos are removed after receiving a take-down notice from Google for violating the terms of service. Of course, these mash-ups are blatantly infringing on the copyright holders works and should be taken down. One thing I notice on these mash-ups is a copyright disclaimer saying the presentation of the video is fair use and the user is claiming no rights in the intellectual property and does not own any of the copyrights associated with the works. While that is very kind of them to admit, it does not somehow insulate them from a possible infringement action. This brings us to the subject of the day, fair use. This is probably one of the murkiest and most litigated areas of the act so I will attempt to clear up the basic idea.

Fair use is nested in § 107 of the Copyright Act which outlines the general idea of fair use.[1] It states fair use includes reproduction in copies or phonorecords or by any other means…for purposes such as criticism, comment, news reporting, teaching, scholarship, or research. The act clearly states that if you are using a copyrighted work for the aforementioned purposes it “is not an infringement of a copyright”. This is subject to several limitations, which the act takes into consideration to determine if normally infringing activity is “fair use”. These factors are:

(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

(2) the nature of the copyrighted work;

(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

(4) the effect of the use upon the potential market for or value of the copyrighted work.

As with any law, the statutory language is quite broad and open to interpretation. The courts have held that a fair use analysis must be done on a case by case basis and does cannot be simplified with a set of bright-line rules.[2] In Campbell vs. Acuff-Rose Music, Inc. the court reasoned the fair use doctrine “permits [and requires] courts to avoid a rigid application of the copyright statutes when, on occasion, it would stifle the very creativity that the law is designed to foster.”[3] This case provides the best analysis for the fair use doctrine because it allows for uses beyond the rigid statutory language and articulates the benefits for creating a transformative work which promotes the central purpose of the copyright act; promoting science and the useful arts. This allowed for the creation of a parody based on a previous work that the court determined was a non-infringing use, even though the strict reading of the statutes seems to show a parody wouldn’t really be a “fair use” because it is not criticism, comment, news reporting or any other factor listed in § 107. Nonetheless we have works such as Weird Al, Space Balls, and are modern transformative works such as “Girl Talk”.

So what we know from cases is the rules are not rigidly applied and allow room for some creativity and transformative works based on § 107 factors. If you are working on something and wondering if it is fair use consider the factors in § 107 and the court’s interpretation of Campbell vs Acuff-Rose Music. If you are using the work for the purposes enumerated within the act you will probably be fine, however, if you are using the work to create a mash-up of your favorite movie clips to your favorite song; you’re probably going to get a take-down notice from Google.

 

As with any post this is not legal advice and if you have a copyright issue please contact an attorney.

 

 

[1] 17 U.S.C. § 107 http://www.law.cornell.edu/uscode/text/17/107

[2] Campbell vs. Acuff-Rose Music, 510 U.S. 569 (1994)

[3] Id at 577

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First Circuit Court of Appeals Upholds 675,000 Judgment in Lawsuit for Illegal Downloading

The First Circuit Court of Appeals has upheld the damages against Joel Tennebaum, a former Boston University Student, in the amount of $675,000. This is stark reminder to all who think that their illegal downloading will go unnoticed by record companies and other copyright holders. While I do agree that the ruling is reasonable and well-grounded in copyright law I do not agree with the First Circuit when the judges ruled that the penalty is not; “so severe and oppressive as to be wholly disproportioned to the offense and obviously unreasonable.”

Joel Tennebaum was like many college students in the early 2000s, he downloaded music and shared it via peer to peer networks. Many of our friends did the same but Joel was unfortunate enough to get a letter that informed him he was going to be sued. According to the facts of the case he knew this conduct was wrong, ignored warnings from his father, his college, and even a letter from the recording companies. Joel nonetheless continued the activity. When faced with a lawsuit from Sony Joel lied about his activities by blaming burglars and a foster child living at his parent’s house for the activity. In the previous court ruling the jury found Joel’s activity willful. In determining the original damages the court said the jury must consider to following factors;

“the nature of the infringement; the defendant’s purpose and intent; the profit that the defendant reaped…the expense the defendant saved, the revenue lost by the plaintiff…the value of the copyright; the duration of the infringement; the defendant’s continuation of infringement after notice of the copyright claims; and the need to deter…other potential infringers.” Sony BMG Music Entertainment v. Joel Tennebaum No. 12-2146 (2013).

The jury awarded $675,000 which was later reduced to $67,000, Sony appealed that reduction and the court of appeals vacated the judgment and remanded to the trial court with instructions to rely on St. Louis, I.M. & S. Ry. Co. v Williams, 251 U.S. 63 (1919) in determining an award of statutory damages. Based on Williams, the original award of damages was reinstated.

Joel Tennebaum asserted the damages were unconstitutional and violated his due process rights, which brings us to the current case. The court of appeals was tasked with answering two questions. First, “[w]hat is the correct standard for evaluating the constitutionality of an award of statutory damages under the Copyright Act? Second, did the award of $675,000 violate Tennebaum’s right to due process?”  Sony BMG Music Entertainment v. Joel Tennebaum No. 12-2146 (2013).

In answering the first question the court decided that Williams is the appropriate standard for determining statutory damages under the Copyright Act. Williams, a decision nearly as old as my grandpa that remembers dirt roads in Minneapolis and when cars became “popular”, held that statutory damages only violate due process “where the penalty prescribed is so severe and oppressive as to be wholly disproportioned to the offense and obviously unreasonable.” Williams at 66-77.

The second question was more fact specific and examined the purpose of damages under the Copyright Act. Apparently the advent of new technology enabled people to easily steal copyrighted works and congress thought it could lead to the loss of the value of copyrights, reduced income and profits, and job losses. The court continued and asserted that Tennebaum’s actions were egregious. His conduct carried on despite “numerous warnings” and he denied responsibility for making thousands of songs available via peer to peer networks. Therefore the court ruled that damages $675,000 did not violate his constitutional rights. Tennebaum argued that Sony suffered no more than $450 in damages. Williams, however, does not rely on calculating actual damages suffered by a party in the context of statutory damages because the damages are meant to be a punishment for the violation of public law and therefore the amount may be adjusted to address the public wrong rather than redress the private injury suffered by the plaintiff.

Discussion

Does this same fair to anyone else? Could this be reasonable application of damages when the Williams standard holds that due process is violated where the penalty is so severe and oppressive as to be wholly disproportioned to the offense and obviously unreasonable?

True, Joel did infringe on the copyright and Joel did distribute the songs via peer to peer networks, ignored warnings, and knew it was wrong. He did this in a time when copyright law was unsure how to treat these peer to peer networks in terms of contributory infringement and other areas of the Copyright Act.  Do these damages deter others from infringing? Has the industry lost millions of dollars because of it? Did hundreds of people lose their jobs in the music industry due to peer to peer sharing? I haven’t seen news of that and I do not think that is the case.

Protecting Intellectual Property is important, what Joel did is wrong. However, I was taught two wrongs don’t make a right and by the first circuit holding that these damages were not severe, oppressive, and disproportionate to the offense is pretty unreasonable in my eyes. Although I do have less sympathy for Tennebaum after I learned he tried to blame a foster kid living at his parent’s house.

Let’s wait to see what happens with this becase Thomas-Rasset, 692 F.3d 899, is awaiting to be heard before the Supreme Court, well that is if the court says it will hear it, of course.

Full Opinion

Raptorchef

Top Trademark and Copyright Stories from Around the Web

Here are your Top IP Stories from around the web for the week of June 24, 2013

 

Brooks Brothers drops trademark lawsuit against small home-based business “Bubble’s by Brooks”. An incident of trademark bullying and local lawyers helping small business. Full Story.

U.S. District Judge Joan Ericksen reopens copyright cases after incidents of fraud revealed in the Copyright Pornography troll saga.  Full Story

Sweet battle in the trademark world as Wendy’s attacks United Dairy Farmers for use of “Frosty” trademark. Now I want a frosty. Full Story

Excellent article highlights the important of Trademark registration for small businesses and start-ups. Full Story

Trademark licensing issues are highlighted in Trademark dispute between Gibson Guitars and Viacom. Sponge Bob Ukulele looks remarkably like flying V Guitar. Full Story

Will.i.am sues Pharrell Williams’ for using “i am OTHER” claiming infringement for the use of “I AM” trademark. Since 2006 Will.i.am has owned the “I AM” mark. Full story

An examination of the effect of the DOMA ruling on copyright law; gay couples will now enjoy the full benefit of copyright statutory succession and renewal rights. Full Story

Artist Roger Dean seeks $50 million in damages against James Cameron and 20th Century Fox claiming the filmmaker infringed on his copyright by using his characters and art in the film “Avatar”. Full Story

Second Circuit Overturns District Court’s Decision on Marvel’s “Ghost Rider” Character.

In an excruciatingly long forty-eight page decision the second circuit ruled summary judgment was inappropriate as to the issue of ownership of the Ghost Rider copyright. The real question addressed by the court wasn’t who really owned the copyright in Ghost Rider but rather if the original author transferred his renewal rights in the copyright.

The district court granted summary judgment in favor of Marvel because the original author, Gary Friedrich, assigned all his rights to Ghost Rider by signing a work-for-hire agreement six years after the initial publication of the original Ghost Rider Comic.  Friedrich contended that he did not assign his renewal rights in the Ghost Rider copyright and was therefore entitled to the ownership of the copyright.

According to the facts of the case Friedrich was big fan of comic books and motorcycle gang movies, and first imagined of the idea of a superhero that wore black leather and rode a motorcycle. In 1968 he conceived of the hero we know today at Ghost Rider, flaming skull and all; which, apparently, he conceived after seeing his “bony-faced and red-headed” friend riding a motorcycle. After finishing the character’s concept Friedrich presented a synopsis of his story to Marvel comics whose chief editor, Stan Lee, agreed to publish to Ghost Rider story and Friedrich agreed to assign his rights in the character to Marvel. The renewal rights were never discussed.

The comic was finally published in 1972, if you’re a bit of a comic geek you know this was in Marvel Spotlight, Vol. 1, No. 5. The comic identified Marvel as the copyright holder and had a credit box which said “conceived & written by Gary Friedrich”. Ghost Rider later became a commercial success for Marvel and had a series dedicated to the character in 1973.

Work-for-Hire Agreement

In 1978, after congress introduced the Copyright Act of 1976, Marvel required all of its freelance authors to sign work-for-hire agreements. Friedrich signed the agreement on July 1978, which was a confusing mess of legal garbage, and returned it to Marvel.

The question that was raised by the court of appeals, and therefore the reason for vacating summary judgment, revolved around the interpretation of the work for hire agreement. After the court reviewed the work-for-hire agreement it determined it was not specific as to whether the author assigned his renewal rights in his copyright. Under the copyright laws an author is allowed to assign his renewal rights but there “is a strong presumption again the conveyance of renewal rights.” Corcovado Music Corp. v. Hollis Music, Inc., 981 F.2d 679, 684 (2nd Cir. 1993). If there is an express term that says the author agrees to convey his renewal rights, then the court will likely enforce it. In this case there was no express language in the agreement that indicates this intent, furthermore, any language such as “forever” that implied the intent to convey the renewal term should be interpreted by a jury.

After carefully reviewing the contract signed by Friedrich, the Court of Appeals rules that it was in err for the district court to grant summary judgment in favor of Marvel for three reasons.

First, the contract was ambiguous and often illegible. The language was not specific as to whether it covered only the work created for Marvel after contract was signed or the work Friedrich created six years prior. Additionally, there is not specific mention in the contract of the “Ghost Rider” work. Marvel relied heavily on a provision of the contract that says “grant[ing] to MARVEL forever, all rights of any kind and nature in and to the Work”. Regardless, the court stated it was not clear whether the language applied to the work created six years earlier and was not enough to overcome the strong presumption against the conveyance or renewal rights. Extrinsic evidence indicated that when the contract was signed Friedrich was unrepresented by counsel, was told the agreement only covered future work, and that he did not know about the concept a renewal rights until 2005. Finally, there was also no discussion of renewal rights when the parties signed the contract in 1978.

If you would like to read the full opinion click here. Suffice to say, there were enough questions regarding the contract and the renewal rights that the question must be submitted to the fact finder. A reminder that media and publishing companies should not haphazardly sign form work for hire agreements with writers and writers should be represented by counsel with dealing with publishers.

 

Raptorchef

 

This article is for commentary only and nothing herein constitutes legal advice. If you need the legal help please contact an attorney.

The Sad and Untimely Demise of the Art Car “La Contessa”

This is a bit old but remains one of my favorite copyright cases.

Artists Simon Cheffins and Gregory Jones brought an action against Michael Stewart, land owner near the area where the Burning Man Festival takes place. The action stems from the destruction of the plaintiffs beloved “sculpture” known to patrons of the Burning Man Festival as “La Contessa”. La Contessa is an “art ship” built around the frame of an old bus and made to be a replica of Spanish ships of yesteryear. The plaintiffs are two artists that conceived of the idea of creating a land roaming ship. The artists received a $15,000 grant to design and build the magnificent vessel. Cheffins v. Stewart, 2011 WL 196932. It took several months and over seventy volunteers to construct the large replica. The ship had several decks, room for dozens of people, two bars, and was beautifully decorated.

The La Contessa was indeed a gem of the Burning Man Festival and had no equal among other roaming “art cars”. Sadly, after several years of use at the festival the ship sustained damage during a battle with wayward sand dune (to its credit, it survived a battle with a whale art ship before it met the dune).  The damage, perhaps, could have been avoided had the driver been able to see. You see, there was no way for the driver to see, so a navigator sat above decks and relayed directions via radio communications. Crippled and immovable, the derelict vessel was left on the property of Michael Stewart. Stewart was known locally for his angst against the attendees (hipsters) of the Burning Man Festival (probably, because they left giant pirate ships on his property). Stewart, annoyed at the presence of the sailing ship, decided to burn it to the ground.  The result was the destruction of the La Contessa, the art ship lay in ruins, sadly, it would never sail again.

Cheffins and Jones filed suit under 17 U.S.C. §106A and an action in conversion for the destruction of their ship. Unfortunately for them, § 106A of the copyright act is usually a losing battle and almost never enforced.

Visual Artists Rights Act

The opinion notes “[N]ot every artist has rights under VARA, and not everything called “art” is protected by such rights” Cheffins v. Stewart, 2011 WL 196932. “VARA protected only things defined as ‘works of visual art,’ a definition that is a ‘critical underpinning of the limited scope of the Act.’” Id.

The issue for the court was whether the ship was a work of art that fell under the protection of VARA. The plaintiffs contended that the ship was protected because it was a sort of “applied art” and therefore sculpture. Applied Art is defined as “[T]wo-and [T]hee-dimensional ornamentation or decoration that is affixed to otherwise utilitarian objects.” Carter v. Helmsley-Spear. 861 F.Supp 303, 315. (2nd Cir. 1995). The problem here was that the ship was not a traditional sculpture and VARA does not define “applied art” in any of its provisions. However, the legislative history of the Copyright Act defines works of applied art as “all original pictorial, graphic, and sculptural works that are intended to be or have been embodied in useful articles”, for example, a piece of furniture that could be called a sculpture. Cheffins v. Stewart, 2011 WL 196932.

The court ruled that the ship was a utilitarian object with the purpose of transporting people. Because the ship could transport people, accommodate bars, concerts, and house dozens of people, it was not considered art subject to protection by VARA. The unique functionality of the art barred its protection and therefore the plaintiff could not sue Stewart under VARA. The court granted summary judgment for the defendant on the VARA claim but allowed the conversation claim to remain.

Apparently karma caught up with Mr. Stewart as his Yacht mysteriously sank to the bottom of a lake shortly after the verdict.

Soft IP News for Week of April 29th

Another example of trademark bullying, Washington D.C. restaurant “Rogue 24” is being sued by Oregon Brewing Co., one of the country’s largest breweries, for trademark infringement, trademark counterfeiting, and cybersquatting. Full Story

The maker of Sam Adams Beer files Trademark for “Boston Strong” beer. All profits from the Boston Strong beer will be donated to Boston bombing related charities. Furthermore, the company said that if the trademark application is successful it will allow others to use the mark if profits are donated to charities. Full Story

I’ve never heard of this, the government seeks to seize control as biker gang’s trademark using its asset forfeiture power. The government claims the gang is responsible for crimes ranging from selling iPods to murder. Full story

Craigslist had its copyright claims thrown out after it attempts to sue third party for indexing its material. Craigslist claimed copyright in user’s posts; judge disagreed. Full Story

Warner Brothers, copyright enforcement GURU and supporter of SOPA, has come into its own bit of infringing troubles. The media giant is being used for the use of cat memes “Nyan Cat” and Keyboard Cat. Full Story

Eminent author Harper Lee sues former agent of breach of fiduciary duty for failing for properly protect the copyright of “To Kill a Mocking Bird”. Full Story

Facebook and Timelines Inc. settle dispute before any quality time is spent in court. Facebook was sued by the company of its use of “Timeline” on the social networking site. Full Story

Ukraine gets a bad grade from the U.S. Trade Representative’s office for failing to protect copyrights. This mark on the Ukraine can lead to serious consequences in international trading with the country. Full Story.

Wholesale retailer “Costco” and fine jeweler “Tiffany & Co.” square off in court. It seems Costco has been selling “Tiffany” Jewelry in its stores which are not actually authentic. Costco claim the Tiffany name has become generic term for “a mount common on engagement rings”. Good luck with that, Costco. Full Story

Supreme Court and the First Sale Doctrine

In a recent Supreme Court case Kirtsaeng v. John Wiley & Sons, Inc., the justices were tasked with interpreting the first sale doctrine of the copyright act and how it applied to goods manufactured abroad. The pivotal question which the court decided was whether a person who lawfully obtains copyrighted work abroad and subsequently resells it violates the copyright owner’s distribution rights. This required the court to interpret the statutory language “lawfully made under this title” and whether the importation provision of the copyright act prohibited such resale in the United States. Luckily the court sided with the Kirtsaeng and held that the first sale doctrine applies to copies of copyrighted work lawfully made abroad and the import provision is limited by the first sale doctrine in a manner which does not prohibit the sale of lawfully purchased material.

The petitioner, Kirtsaeng, was studying in the United States and is a citizen of Thailand. While studying here he discovered, as nearly every penny pinching college student in America has, that books are quite expensive in the United States. As it turned out the books were much less expensive his native country. Therefore, he did what any Ramen eating dorm-dweller might do, he had his family buy the books in Thailand and mail them back to the United States at a substantial savings. It seems that saving money was not his only motivation because Kirtsaeng also bought the books and resold them in the United States at a higher price. This annoyed publisher enough to sue the student for violating its distribution rights.

John Wiley & Sons, Inc. publishes academic textbooks. Wiley often licenses its material to its Asian subsidiary to “publish, print, and sell Wiley’s textbooks abroad.” These books are printed in English and, from what I can tell, contain the same information as the books printed and sold in the United States; except they carry a notice which warning buyers that the books may not be sold outside the country of origin.

As I posted in my previous entry on the exclusive rights of copyright holders, the rights are limited by §§ 107-122. Section 109 is the first sale doctrine, which essentially says that if you buy a book, a CD (not a digital download *cough*), magazine, or any other copyrighted work the original owner loses any right to distribution they had. Therefore you are free to sell it, give it, throw it away, or take it on a trip with you to Canada and sell it to your friend there. You don’t need permission from the copyright owner; if you did it would create some pretty ridiculous results. The text of §109 says:

“Notwithstanding the provisions of section 106(3) [the section that grants the owner exclusive distribution rights], the owner of a particular     copy or phonorecord lawfully made under this title . . . is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy” 17 U.S.C. § 109

As previously mentioned the case turned on the parties interpretation of “lawfully made under this title” in § 109.

Kirtsaeng contend that the because the books he sold were lawfully made in Thailand and lawfully purchased, the first sale doctrine applied and he could not be liable for violating the distribution rights of Wiley. The books were lawfully made because Wiley’s Asian subsidiary sold and manufactured the books in Asia; the books he was selling were not unlawfully copied without Wiley’s permission, and therefore were subject to the first sale doctrines limitation.

Wiley argued that the unauthorized importation and resale was a violation of its distribution rights and a violation of the copyright acts import prohibition. Previous courts and the solicitor general read the language “lawfully made under this title” to restrict the first sale doctrine geographically. Wiley asserted that these words are only effective where the United States Copyright Act is effective and therefore the first sale doctrine cannot apply to copies made outside the United States, regardless of whether the goods were lawfully manufactured. Furthermore, Wiley says petitioners actions are further limited by §602(a)(1) of the copyright act which says “[i]importation into the United States, without the authority of the owner of the copyright under this title, of copies…of a work that have been acquired outside the United States is an infringement of the exclusive right to distribute copies…under section 106…” . 17 U.S.C §602(a)(1). The court disagreed.

The court noted that §602(a)(1) may make it clear that importing a copy without permission violated the distribution right but that right is limited by the first sale doctrine, just as §106 of the copyright act. This was first discussed in Quality King Distributors, Inc. v. L’anza Research Int’l, Inc. 523 U.S. 135 (1998). However, the court had to decide whether the fact that the books were manufactured outside the United States created a distinction between this case and Quality King. The Court determined that it does not create an important distinction between the two cases. The import limitation does not apply to lawfully purchased materials and a person who purchases a book abroad may subsequently resell that book without the publisher’s permission. Therefore, Kirsaeng was free to resell the books and there is no geographical limitation to the first sale doctrine.

If you would like to read the entire case in all its 74 pages you may download it here. For further analysis and amicus briefs, check out the Kirtsaeng v. John Wiley & Sons, Inc. page on the SCOTUS blog.

Raptorchef